Legislative Update with Jay Kruse

​Largest tax cut in SD history is moving to the Senate for consideration. Plus, more than 30 Dakotans are headed to #CUNAGAC. 

Good morning! Well, we were warned when less than 20 days ago, ol’ Punxsutawney Phil told us to be prepared for another six weeks of winter. He didn’t mention another foot of snow – but apparently groundhogs know their weather! There are 35 North and South Dakotans attempting to fly out to Washington, DC this week, and Mother Nature is a master of ruining travel plans. It’s just another Dakota winter!

Largest Tax Cut in South Dakota History
The South Dakota House of Representatives voted to reduce the state’s sales tax down from 4.5% to 4.2% on a 66-3 vote. HB 1137 has successfully passed through the House and now moves over to the Senate for consideration. This projected $104 million tax cut would save every man, woman, and child $116 on average during the first year, according to supporters.

HB 1137 in its original form would have reduced the state’s 4.5% sales tax rate down to a flat 4%, however the bill was amended in committee to 4.2%. Cutting the rate to 4% would have cost the state more like $173 million vs $104 million. The bill was heard in the House Appropriations Committee along with three other bills with proposed tax cuts, one being Governor Noem’s legislation that would have eliminated the state’s grocery tax.

Governor Noem joined the Appropriations Committee in person to lobby in favor of her proposal to eliminate the grocery tax in the state, which was also a major focus of her re-election campaign last year. However, the bill was sent to the 41st Day, effectively killing the bill, which was supported by the committee 8-1. There was even an unsuccessful attempt to revive the bill on the House floor using what is referred to as a “smoke out.” However, the “smoke out” fell short of gaining the required two-thirds support of House lawmakers.

“It’s about time somebody shows up for the taxpayer,” Noem said. “The best policy is always to focus on the people who live here.” Governor Noem believes eliminating the grocery tax will have a larger impact on South Dakota residents, while reducing the overall sales tax rate from 4.5% to 4.2% will have a larger impact on tourists and those visiting from outside of the state. “This is the tax cut the people want,” Noem stated.

CUNA GAC Next Week
Roughly 35 credit union advocates are heading to Washington DC this week for CUNA’s annual Governmental Affairs Conference, aka the CUNA GAC. It’s too late to make the decision to attend this year, but no worries, you can still follow along by keeping a close eye on the Memo, our DakCU social media accounts including Facebook and Twitter, and by using #CUNAGAC.  

The CUNA GAC does a great job of packing a ton of meetings and information into a three-day credit union celebration. We will cap off a busy week with our congressional visits to Capitol Hill on Wednesday, which is what I am most excited about!  We will be meeting with all six members of the Dakotas’ congressional delegation to discuss a wide range of issues affecting our local credit unions and their members.

Stay warm and travel safely this week, and don’t hesitate to contact me with any advocacy related questions.