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September 18, 2012 05:58 PM

Voters Will Decide On Millions To Lure Companies

Sioux Falls, SD

Should South Dakota set aside about $16 million every year to recruit businesses to the state, or should that money go to school districts, health care providers and roads?

It's an important question voters will answer in November.

The ethanol plants dotting South Dakota's landscape and the cheese factories opening up in the state can be tied to construction tax breaks, according to South Dakota Chamber of Commerce President David Owen.

"We would not have an ethanol industry without incentives and refunds. We wouldn't have any wind towers in South Dakota without incentives and refunds and all of those programs are part of billions of dollars in direct payments to South Dakota," Owen said.

Referred Law 14, which is on the South Dakota ballot this fall, creates what's being called a 'Large Project Development Fund' to continue attracting those businesses.

The fund will set aside more than 20 percent of the taxes collected from contractors every year to provide incentives to companies to bring their business to South Dakota.

Sioux Falls Development Foundation President Slater Barr says something like this is needed to keep up with other states.

"States all over the country are out there putting their best foot forward, offering them incentives to induce them to come to their community. We need the same if we are going to become competitive," Barr said.

Opponents of the fund say South Dakota already has a business-friendly environment and this money would be better spent in the state.

"We have no corporate income tax.  We have a very motivated and, frankly, low-wage workforce.  We have very anti-union laws set up so by any measure a corporation should be excited to do business in South Dakota regardless of if there's any extra money on the table for them," South Dakota Democratic Party Chairman Ben Nesselhuf said.

Nesselhuf opposes the law and thinks the money should stay in the general fund to support schools, infrastructure and health care.

"I strongly believe we should support South Dakotans first not large out-of-state corporations," Nesselhuf said.

And it's South Dakotans who will be the ones who get to decide where the millions are spent this fall.

If passed, the South Dakota Board of Economic Development will be in charge of handing out the grants.

Projects have to be more than $5 million to be eligible.
 

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