Protected from public view, some members of the Legislature and some top officials from the Daugaard administration along with a variety of lobbyists are working on a secret plan to offer tax breaks for economic development projects in South Dakota.
Nobody seems to know yet what will comprise the final mix that will be presented to legislators sometime in the 13 working days left of the 2013 session. Instead, hints seep out on occasions, such as those Tuesday from several legislative leaders.
For instance, House Republican leader David Lust of Rapid City asked a committee to kill his bill granting sales- and use-tax exemptions for computers and related equipment at data centers if the purchases exceed $2 million and at least 20 jobs are created.
Lust said he wants data-center incentives placed instead in the bigger package that is taking shape.
The Senate voted 26-7 for the latest version of tax incentives for wind projects but, according to lawmakers and lobbyists, the legislation likely isn’t in the final version yet. Nonetheless, Sen. Larry Rhoden, R-Union Center, urged its passage while acknowledging Senate Bill 195 isn’t “an end-all, be-all solution.”
One signal that the package is still forming came via the “nay” vote from Sen. Mark Johnston, R-Sioux Falls, who wants the wind legislation rolled into the bigger package, too.
The House of Representatives stopped its debates on bills Tuesday before reaching the combined proposal from Rep. Scott Munsterman, R-Brookings, and Rep. Dick Werner, R-Huron.
Munsterman’s piece would establish a system for relief of 2 percent sales tax on projects that meet city or county approval. Werner’s part would establish a program for state assistance to local economic development staffs. Those were put together last week by a House committee.
Senators on Tuesday, meanwhile, kept alive two carcasses sponsored by Sen. Corey Brown, R-Gettysburg. He said he thinks legislators are “exceptionally close” to completing a big package and both bills will be needed later for the final language to be inserted.
Senate Democratic leader Jason Frerichs of Wilmot said he appreciates the “palms-up” approach being taken in the formation of the plan. He didn’t offer any further insight into what the plan might include but he said identifying a source of money is of “utmost importance.”
Frerichs added that much more discussion is needed. The Senate approved one of Brown’s currently empty bills 31-2, with Senate Republican leader Russ Olson of Wentworth and veteran Democratic Sen. Larry Lucas of Mission voting against it.
The Senate then approved Brown’s other carcass 30-3, with Democratic Sen. Jim Bradford of Pine Ridge joining Olson and Lucas as opponents.
In asking for the bill’s passage, Brown offered just four words: “Same song, different verse.”