Increasing Taxes in a Tough Economy

Local News by KDLT last edited on Monday, January 18, 2010

South Dakota lawmakers are looking at legislation that would increase fees for drivers in the state.

In a year where money is tight for everyone, many lawmakers are wondering increased taxes are even a possibility.

It's often said that South Dakota has just two seasons, winter and road construction.

Maintenance costs add up, though, and the state isn't bringing in enough money to pay for all the roads and bridges that need to be fixed.

State Senator Mike Vehle is sponsoring a bill that would help solve that problem.

If it passes, senate bill one would increase the gas tax by five cents per gallon, increase licensing fees by nine dollars for most vehicles, and increase the car buyer's excise tax by half a percentage point, all starting in May.

Vehle plans to lower the gas tax increase to just three cents per gallon when it gets to committee.

All those fees would go up by the same amount again in May, 2012.

"We did two years of studies to figure out what the needs are, and the amount we're suggesting doesn't come anywhere close to meeting those needs,” said Vehle.

Some lawmakers say it makes sense to have people who use the roads to pay to fix them, but others say any talk of higher taxes should come after an economic recovery.

Representative Manny Steele wonders, “Do we need to be raising taxes at this time, this year, with the unemployment where it is?"

Steele does not disagree with all of senate bill one, though.

"I can see where maybe we will need the registration fees because of the conditions the county roads are in and the help that they need," said Steele.

Vehle says this bill and other bills that would increase taxes and fees will be difficult questions for lawmakers to answer.

Vehle says he expects senate bill one to be heard in the Senate Transportation Committee Monday, Jan. 25.