Legislature Explores Ways to Grow State's Economy

By Victoria Wicks  
   If there’s a fight brewing in the state legislature this year, it’s education funding versus economic development. But Democratic and Republican leaders appear to be open to working together to find bipartisan solutions. At the end of the first legislative week, House and Senate leaders highlighted their priorities for this session, which started Jan. 8.
   In the November election, almost 58 percent of South Dakota voters rejected the idea of diverting 22 percent of contractors excise taxes away from the general fund and into a large projects development fund.
   Now legislators are trying to find acceptable ways to give incentives to large businesses to locate in South Dakota, without draining money away from school funding and other general fund programs.
House majority leader David Lust says an incentives package helps to recruit business.
   “To say that it’s going to be the driving factor for any company to come here, it probably is not accurate,” Lust says. “But in the discussions I’ve had with people in the industry, it certainly plays a role at the end of the decision-making process when they’re deciding between a state that’s offering significant incentives in some cases and a state that’s not.”
   Lust says making a tourism tax permanent, rather than allowing it to sunset, is one way of keeping a reliable revenue stream. He says that bill is coming up this session.
   Bernie Hunhoff is the House Democratic leader. He says a large projects development fund is a good idea, but it doesn’t make his list of top ten priorities if it comes out of general fund dollars.
   “Everybody agrees education is the most important component of economic development. I think just about every legislator agrees education is underfunded. So if we’re underfunding education, should we be taking general fund dollars and spending them on new programs? That’s the real sticking point,” Hunhoff says.
   The Democratic leader says economic development includes healthcare, tourism, scholarships, and workforce development along with large projects, and all are on the agenda for the session.