Tax, fee hikes sought for SD roads, bridges

Farm Forum

PIERRE — The Legislature should raise several major taxes and fees on motor fuels and vehicles, because highway funding is falling short in South Dakota, Gov. Dennis Daugaard told state lawmakers Tuesday.

The Republican governor made his call for the increases in his State of the State speech opening the 2015 session of the Legislature.

His decision to support more highway funding marked a reversal from his previous four years as governor. He previously resisted tax increases. The Legislature overrode his veto of a 2011 measure that increased license plate fees for non-commercial vehicles.

On Tuesday, starting his second term as governor, Daugaard launched directly into the topic of highway funding after brief introductory remarks.

He outlined a package that he said would raise $50.5 million more for roads and bridges in the first year, with $39.8 million for the state highway fund and $10.7 million for counties, townships and cities.

The governor took his position after theLegislature’s interim committee on highway needs and financing formally submitted Senate Bill 1.

The committee’s plan would generate an estimated $100 million annually and is much broader than Daugaard’s proposal.

He advocated four sets of changes:

• Raise the excise tax on motor vehicle purchases to 4 percent from the current 3 percent, a move that Daugaard said would generate an additional $26 million per year.

• Raise the per-gallon taxes on motor fuels by 2 cents this year and add 2 cents each year after. Daugaard didn’t provide an estimate of the additional revenue that would result. The top tax rate currently is 22 cents per gallon of straight gasoline. It has been 22 cents since 1999.

• Raise vehicle registration fees by 10 percent and raise the registration fees for noncommercial trucks to 70 percent of commercial rates this year and 80 percent next year. Daugaard didn’t provide an estimate of the additional revenue that would come from those increases.

• Give counties and townships more flexibility to increase revenue for roads and bridges from local property owners with their approval. He didn’t provide specifics.

“I don’t want to leave this problem to future governors and future Legislatures and future generations,” Daugaard said. “Let’s fix this problem for good, this year.”

Daugaard was a state senator in 1999 and voted for the package of fuel-tax increases and license-plate fee increases.

Daugaard also talked Tuesday about the juvenile justice reforms that will be his other major emphasis this session.

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