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South Dakota state senator wants to raise road taxes

December 26, 2013
"Highway To Anywhere" by Kim Newberg

“Highway To Anywhere” by Kim Newberg

Last week AP reported that South Dakota state senator Mike Vehle (R-20) is continuing his fight to raise road taxes in South Dakota. This from a story posted on SFGate:

Republican Sen. Mike Vehle, of Mitchell, chairman of the Senate Transportation Committee, plans to hold a series of hearings when the 2014 Legislature opens in January to gather information about the need for highway funding and how that revenue might be raised. Any bill to raise highway taxes would not be introduced until 2015, he said.

Vehle has been vocal the last few years about raising road taxes. It is commendable that Vehle is holding a series of hearings to determine how much funding the highway department requires. The motor fuel tax in South Dakota has not been raised since 99 and it is quite possible the current levels will fall short of maintaining the road infrastructure long-term. It is however surprising that a Republican senator is looking to ‘raise revenue’; instead of looking at other places in the budget where funds can be diverted from. Later in the article it clarifies what Vehle means by increasing revenues:

Vehle said he hopes the governor would consider an increase in road taxes because he has supported efforts to build up South Dakota’s infrastructure. And the senator argues the gas tax is more of a user fee than a tax.

“Everyone wants good roads and safe bridges. It’s just that no one wants to pay for it. Well, someone’s got to pay for it,” the senator said.

Vehle said if a consensus can be reached on highway funding, he and others could spend the next year explaining the issue to the public before the Legislature votes in 2015 on any tax increases.

It is quite clear that Vehle is planning to use the hearing as a means raise taxes. Calling the tax raise a “user fee” increase doesn’t fool anyone. This is the same trick Representative Ryan used to increase taxes in the Federal Budget with the aviation security services ‘fee’. Conservatives didn’t fall for this double-speak at the federal level, and it shouldn’t be allowed at the state level either. It is mind-boggling that a Republican state senator would use hearings as a means to justify more taxes.

Wouldn’t it make more sense to hold the hearings where it can be determined if the current road infrastructure funding is too low for long-term maintenance. Once the hearings are completed there would be a better understanding of how much, if any, extra revenue is needed. There are many possible answers that don’t involve raising any taxes at all. Here are a few ideas for the legislators to look at if there is a need for increased highway maintenance funding:

  • Find other places in the transportation budget which can be cut.
  • Analyze and renegotiate contracts for highway construction and maintenance projects. Private sector businesses will find ways to cut costs if it looks like they will lose a cushy government contract.
  • Find other places in the overall state budget which don’t need to be funded to their proposed levels. The Governors Office of Economic Development (GOED) is a great place to start. GOED takes taxpayer dollars and gives it to favored businesses. Instead of this cronyistic approach, why not eliminate GOED and increase funding in road infrastructure maintenance. That would be a move that benefits all businesses in South Dakota.
  • Refuse federal funds that have stipulations attached. I am not sure if this applies to transportation funding or not. However federal education funding often comes with requirements that actually make the state pay out more money than if they had not accepted the funds. Analyze all federal dollars being used to fund infrastructure maintenance and withdraw from any programs that are causing the state to waste federal and state taxpayer dollars.

There are likely more ways to raise highway maintenance revenues. Unfortunately the state senator appears set on ‘fixing’ the current perceived funding issues by raising taxes. Senator Vehle may find more support for increased revenues going to highway maintenance if he wasn’t using it a means to raise taxes. Hopefully there will be enough fiscal conservatism left in the Pierre legislator to fight such an attempt.

PS. I predict now that Vehle or another state legislator will also propose a new tax for miles driven as an other solution.

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