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Referred Law 14 & Business

November 1, 2012, 9:50 PM by Angela Kennecke

Referred Law 14 & Business
SIOUX FALLS, SD -

Voters are being asked to decide if 22 percent of the contractors' excise tax should be transferred from the general fund to the Large Project Development Fund and then used for economic development in the state. 

It's simply a question of where you want the money to go; for opponents that means either to corporations or for education.  But supporters say if we don't pass Referred Law 14, the state stands to lose millions. 

When new business comes to the state it's celebrated.  But often it takes some extra money in the form of grants to lure them here.

"We're for any kind of economic development in the state that is going to help grow business," Manpower Recruiter Clinton Brown said.

Brown says he has one company who is waiting to see if South Dakota passes Referred Law 14 before it decides to locate in the Sioux Falls area.  He won't name the company, but says it's an international manufacturer who would bring hundreds of jobs to the state. 

"They're going to invest a significant amount of money right away, tens of millions of dollars and long term millions of dollars in salaries and further purchasing here. So, companies look for that economic development help that they can to get to boost," Brown said.

"I'm a businessman. I've got salesmen. I know how they operate and think. They will give away pencils; they will give away refrigerator magnets or millions of your tax dollars if it will close the sale.  But sometimes it doesn't make sense and somebody has to step in and tell the salesmen the numbers don't work out and that's what's happening in South Dakota with economic development. It's not making sense for the taxpayers," Democratic Leader Bernie Hunhoff said.

Hunhoff is opposed to taking the money from the contractors' excise tax out of the general fund. 

"We just do not have accountability or transparency laws in place in SD to do that kind of economic development.  We also don't have the money.  When we can't fund the schools, that's the number one issue, Hunhoff said.

Hunhoff says education is the key to economic development. 

For recruiters like Brown, it's more black and white.  He says if voters don't pass the law, the company he is working with may go to Nebraska instead.

"I'm afraid of the foresight of some people in the community calling it corporate welfare. Granted we may be giving something up front. But we're gaining so much more long term," Brown said.

If passed, $17 million a year would go into the Large Project Fund. A panel would then decide which companies get the money to locate or expand in South Dakota.

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