Adelstein: Tax Increase Would Fund Education

As soon as this summer, the sales and use taxes in South Dakota could each go up one percent.

It's all part of a plan to help education funding in the state and according to the bill's sponsor, it could help other issues in the future.

Senator Stan Adelstein is the primary sponsor of Senate Bill 120, which would immediately increase the sales tax from four to five percent but only for the months of June, July and August. That would continue each summer until September 2015. Adelstein believes it's a feasible option that can help make up the budget woes in the school system, especially out west.

Adelstein sent out a letter this week indicating the need for more education funding is urgent, especially for his constituents in Pennington County. That's why he's proposing a temporary summer adjustment in sales taxes.

"Rapid City's school system represents about ten percent of the total statewide support," Adelstein said. "This will raise somewhere between $50 and $65 million."

And Adelstein wants to use $30 million of that pie from the general fund on a one-time education funding basis. He says the state will be more than able to allocate that money because of all the tourism that comes in during the summer.

"I've taken $30 million of those proceeds, given it to the state to go back to make up the losses for the cuts in 2012 and 2013," Adelstein said. "And that will literally wipe out Rapid City's shortfall and some other towns as well."

Adelstein believes the need is so pressing that he declared an emergency within the actual wording of the bill.

"An emergency bill takes effect immediately when passed. So, we'd collect the June money this year," Adelstein said.

Adelstein says the increased taxes are only for three summers and he sees no reason to go any longer.

"I really don't think it'll be necessary because the state is growing and we have a lot of other programs," Adelstein said. "And I think the United States will recover as well."

A lot of people have been asking Adelstein if it's a one-time payment for education funding, why does the tax go for three summers? He says it'll allow the state to solve other problems in the future such as health care costs.

The bill is scheduled for a hearing by the Senate Taxation committee on Monday at 10 a.m.