Committee Kills Third Penny Sales Tax Bill

Sioux Falls officials will have to come up with a new plan to fund an Events Center. Thursday, a South Dakota House committee shot down legislation that could have helped pay for it.

The move will affect communities across South Dakota. The Sioux Falls Events Center Task Force says adding another penny to the sales tax would be the best way to fund a $150 million events center.

But Thursday in Pierre, lawmakers disagreed. The bill that would have allowed South Dakota cities to hold an election to raise the tax didn't even pass its first committee hearing. Lawmakers killed it by a vote of 10 to 3.

"Passing this legislation might actually encourage businesses to reside just outside of that municipality, especially if they are selling large items where folks would see the difference," Representative Jason Frerichs of Wilmot said.

Sioux Falls isn't the only city that was interested in the legislation. Mitchell officials talked about how the tax could help them eventually replace the Corn Palace.  All together, 92 towns and cities voiced their support but lawmakers said with this economy, now is not the time to give cities the option to increase taxes.

"They all say its another tool they can put in their toolbox, and it would be. I just don't think that now is the time to give them that tool," Representative Val Rausch of Big Stone City said.

A total of 17 people spoke in support of the bill that would add an extra penny. Only four people spoke against the bill.