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State House proposes cutting food tax amid budget talks

March 8, 2022 GMT

PIERRE, S.D. (AP) — A bipartisan group of South Dakota House lawmakers on Monday passed a proposal to cut the state’s sales tax on food, floating a proposal unlikely to survive budget negotiations that have produced clashes between the House, Gov. Kristi Noem and the Senate.

As the legislative session has entered its final days, lawmakers are focused on ironing out the state budget as well as deciding on over $1 billion in one-time projects. House lawmakers have resisted many of Noem’s proposals to fund projects for universities and other infrastructure, instead pushing tax breaks.

A House Republican proposal to scale back the state’s sales tax was already dismissed by the Senate last month.

But the latest idea to eliminate sales tax on food and groceries gained support from Democrats. Despite holding just a handful of seats in the Legislature, Democrats have recently found themselves being courted for their potentially gridlock-breaking votes as the budget is shaped this week.

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“Raw food — everybody needs it and you don’t have a choice,” House Democratic Leader Rep. Jamie Smith said, adding that it was a tax that weighs heavier on the budgets of low-income people.

Republican Rep. Jon Hansen brought the food tax proposal, arguing that the $82 million loss in state revenues was worth allowing people to pay less at grocery stores.

“I just think we should allow the people to keep more of their tax dollars,” he said.

The proposal faces an unlikely path through the Senate.

“That’s dead,” Republican Sen. Lee Schoenbeck, one of the most powerful lawmakers in the chamber, said of the bill shortly after its House passage.

Senate Republicans have argued that the state is headed for a fiscal cliff once federal funding for pandemic recovering and infrastructure slows down. They have pushed a series of projects aimed at bolstering the state’s universities and other assets.

The House on Monday approved sending $30 million to expand Dakota State University’s cybersecurity program, a project that Noem has personally lobbied lawmakers for. House lawmakers also approved $5.3 million for a business incubator building at the South Dakota School of Mines.

But despite multiple attempts to ram it through the House, a $5 million proposal from Noem for a shooting range near Rapid City was defeated in the House after it couldn’t get the two-thirds vote necessary for one-time spending bills. House lawmakers also dismissed a $38 million appropriation for a women’s prison in Pennington County.

However, with lawmakers continuing to negotiate this week and seemingly plentiful funds on the table, proposals can easily be resurrected.

Republican Rep. Chris Karr said, “How many times this session does a bill have to die before we finally let it die?”