PIERRE, S.D. (KELO) — The push for tax relief now moves to the South Dakota Senate, but the chamber’s majority leader says the governor’s call to remove the state sales tax from groceries probably won’t be part of the discussion.
Republican Sen. Casey Crabtree told news reporters Thursday that talks will likely focus on the state sales-tax cut that the House of Representatives approved Wednesday.
He said there also could be consideration of a property-tax cut for homeowners that was set aside by the House Appropriations Committee the day before.
Republicans hold 31 of the 35 Senate seats. “We’ll find out where our caucus is at,” Crabtree said.
The House voted 66-3 for a proposal from Republican Rep. Chris Karr to reduce the state sales tax rate to 4.2% from the current 4.5%. It would reduce state revenue by an estimated $104 million. Among the nays was House Speaker Hugh Bartels, who said Thursday he preferred taking “smaller bites.”
“I’ve been a little bit cautious because of our ongoing commitments,” said Bartels, a retired banker. “I was a little bit worried about the price tag.”
House Republican leader Will Mortenson said there was only one headline from the Legislature this week — the tax cut. He described it as prudent and sustainable and bipartisan, with six of the chamber’s seven Democrats voting for it.
“So we’re going to reduce the rate on our most common bread and butter tax, that’s the sales tax,” Mortenson said. The next move is up to the Senate, he added. “We’re hopeful our idea comes through. We will hear what they say.”
Senate Democrat leader Reynold Nesiba put the blame on Republican Governor Kristi Noem for the House appropriators’ rejection of her legislation that would have removed the sales tax from groceries.
“The main reason the sales tax cut on food failed was she wasn’t here to lead it,” Nesiba said.
Noem spent the previous week in Washington, D.C., engaged in three days of speeches and public appearances talking about how well she has been leading South Dakota.
Noem, breaking from decades-long tradition, also hasn’t held a governor’s news conference this legislative session.
The governor and Lt. Governor Larry Rhoden both testified Tuesday to the House committee in support of the grocery-tax elimination.
Democrat Rep. Erin Healy said Thursday that Noem had tried to bully Republican legislators to vote for it. Healy noted that none of the seven Democrats stood in support when Republican Rep. Mary Fitzgerald tried to force the House committee to release it for the full House to consider.
South Dakota Democrats for decades have pushed for the grocery tax to be reduced or removed. Nesiba said Thursday it’s the only sales-tax cut he would vote for this session. He said he sensed “a really close vote” coming in the Senate on Karr’s cut.
The legislative calendar has 10 working days left in this year’s 38-day session for the two chambers to find agreement on what the tax cut should be.
Crabtree called it “a win-win situation.”
“I expect us to deliver a significant tax cut to the people of South Dakota,” he said.
Republican leaders were asked about Noem’s various defeats this year, including losses the same day of the grocery-tax proposal and her legislation calling for a special committee that she’d appoint to review foreign purchases of agriculture land.
Republican Sen. Lee Schoenbeck said those were “coincidental.” He said the two prior governors, Dennis Daugaard and Mike Rounds, suffered defeats, too.
“That’s not unique,” said Schoenbeck, the Senate’s top member as president pro tem. “I think the governor has a better working relationship with the Legislature than she thinks she has today.” He added that Rounds, who had been a state senator, “hated” the Legislature while governor.
Mortenson, the House Republican leader, said he didn’t hear any member of his caucus speak critically about her proposals. “We have the same goals. We’re tussling on the mechanics,” he said.
He suggested that the way she set up her budget paved the way for the tax cut. “I think a lot of our caucus views this as largely agreeing with the governor.”
Crabtree saw it the same way. “I don’t think they’re losses,” he said. “If this was baseball, she’d be going in the Hall of Fame.”