Democrat: Rounds' plan undercuts food tax repeal

| Saturday, October 15, 2005

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PIERRE (AP) - State government's budget director said the governor has told him to prepare two state budgets: one reflecting the possible repeal of the state sales tax on food and another that doesn't.

But state Sen. Garry Moore of Yankton, the Democratic leader in the Senate, said the move by Republican Gov. Mike Rounds is political and aimed at scaring the voters.

"I believe the two-budget issue is nothing more than a maneuver to continue to collect and spend money recklessly at the state level," Moore said. "I believe the dual budget is a political tactic to meet an agenda."

Democrats organized a successful petition campaign last year that resulted in a proposal on the Nov. 2 ballot to repeal the food tax. The move has drawn fire from Republicans.

Democratic Party leaders said the party will come up with a plan to sell the repeal measure to voters. Rounds has said the repeal could cost the state $42 million a year and take

$18 million or more from city sales tax income.

Repeal supporters say those numbers are high and that removing the tax could spur the economy in other areas. They also say cities could adjust their sales tax rates on other purchases to make up some of the loss.

Jason Dilges, Rounds' budget commissioner, recently told the Legislature's Interim Appropriations Committee that the governor had instructed him to prepare two budget options. State agencies soon will turn in funding requests for the fiscal year that begins July 1, 2005. Next year's Legislature will vote on that budget.

"Most likely, my budget recommendation will reflect what we would do if the sales tax on food is with us during session or if it is not with us," Dilges said.

Past administrations have offered double budgets, Moore said. "If you recall, one year, one budget called for projected increases in funding and revenue, the other was called austere in an effort to frighten the legislators and the public," he said.

"I believe the same tactics are going to be used now to frighten the public, and legislators, into believing the sky will fall if the sales tax on food is repealed by the voters in November."

Moore said supporters of federal tax relief label that as stimulating the economy.

"But to repeal the sales tax on food in South Dakota, like all our neighboring states, is called irresponsible and reckless by some," he said.