S.D. lawmakers consider boosting gas tax, fees

Talk about it

PIERRE, S.D. (AP) — A South Dakota legislative committee is floating the idea of substantially increasing taxes that are used to build and maintain state and local roads, including a 10-cent-a-gallon boost in the state gas tax and a doubling of the annual vehicle registration fee.

Committee members acknowledge the plan could be hard to sell to taxpayers. They intend to promote it and test public support before meeting again in October, when the panel will decide whether to recommend a boost in road taxes to the 2010 Legislature.

“Remember, these are proposals. We’re going back to our constituents and hearing from them,” the committee’s chairman, Rep. Shantel Krebs, R-Sioux Falls, said at the end of the panel’s meeting Thursday. “We have not decided anything. These are merely proposals.”

However, committee members generally agreed substantial revenue increases are needed to take care of state highways and county roads.

State Transportation Department reports have indicated extra money is required just to keep roads and bridges in their current condition because construction and maintenance costs have skyrocketed while revenues have risen little in recent years.

For example, revenue from the state tax on gasoline and diesel fuel has remained about the same since 2004 but construction costs have risen 40 percent or more during that time, DOT officials have said.

One proposal would raise the gas tax from the current 22 cents to 32 cents a gallon, a boost that would provide an extra $57 million a year for state road and bridge work. The state excise tax on vehicle sales, now 3 percent, would be increased to 4 percent to bring in another $19 million in state revenue.

Counties get money from the annual vehicle registration, which gives a discount to cars and trucks more than 5 years old. The committee’s proposal would double those fees, which currently are far lower than those of other states. Lawmakers also talked of changing the discount so it would apply only to vehicles more than 10 years old. The changes could give the counties and other local governments as much a $62 million a year.

Sen. Mike Vehle, R-Mitchell, said his 2006 Buick now costs $44 a year to register in South Dakota. The same car would bring registration fees of $93 in North Dakota, $242 in Minnesota, $270 in Iowa, $362 in Nebraska, $304 in Montana and $243 in Wyoming, he said.

“If we double ours, we’re still the lowest in the area,” Vehle said.

Committee members also said state gas taxes appear to have no effect on the price of fuel at the pump. Rep. Jim Putnam, R-Armour, said the price of gas is the same in Alaska, with an 8-cent-a-gallon tax, and in West Virginia, with a 32-cent tax.

Tags: state and region, south dakota, news, taxes