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Pulling back the curtains on wage-theft enforcement in MN; Trump's latest attack is on RFK, Jr; NM LGBTQ+ equality group endorses 2024 'Rock Star' candidates; Michigan's youth justice reforms: Expanded diversion, no fees.

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Local Option Tax: More Pressure on SD Families?

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Monday, December 21, 2009   

SIOUX FALLS, S.D. - Proposals for a local option sales tax to help cities deal with budget shortfalls would hurt family budgets, according to Bread for the World, an organization that helps low-income South Dakotans.

The sales tax proposals involve the South Dakota Municipal League, which is coordinating efforts to bring a bill to the legislature that would allow cities to add another cent to their sales taxes. Most cities already add two cents to the state's four-cent sales tax.

Cathy Brechtelsbauer, who is with Bread for the World, explains the cumulative effect of that extra penny on family budgets.

"Where we have average hourly pay down at the bottom next to Mississippi, and then to raise the sales tax . . . You see, it's not like sales tax in other states, because in South Dakota it's a harder hit on lower incomes. We have more basic necessities that get taxed here."

While lower-income families feel sales tax increases most sharply, Brechtelsbauer says, any increase in sales tax is a direct hit on all consumers.

"Higher sales tax translates directly into a higher cost of living, for everybody. Some people can afford it, but a lot of people can't afford that."

The state has tried to soften the hit by allowing rebates for some of the sales tax paid on food.

Brechtelsbauer, who is also an advisory member of the Association of Christian Churches of South Dakota, says it doesn't help much, though, because the rules for that rebate program changed in July and fewer people are eligible.

"We know rebate programs don't work for very many people. The state has shown us that. And we should probably let people know that over the whole state, over a three-month period just recently, only 630 households in the whole state received refunds. It's less than one percent of the low-income population of the state."

One state official says the program was changed because more people are now receiving food stamps.


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