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Governor Daugaard Vetoes Local Government Bill. Is This a “No New Taxes” Fail?

Governor Dennis Daugaard has vetoed his first bill this legislative session. The purpose of the legislation was to allow communities, specifically Deadwood, to charge a higher fee for what is commonly called occupancy or pillow fees at motels.

Below is the text of his letter:

Dear Mr. President and Members of the Senate:

I am returning to you Senate Bill 98 with my VETO.  Senate Bill 98 is entitled, ‘An Act to allow certain municipalities to charge a higher occupational tax.’

Senate Bill 98 is a fifty percent tax increase.  It allows business improvement districts in Deadwood to increase the hotel occupancy tax on rented lodging from $2 to $3 per night.  Local officials clearly intend to increase this tax if they are allowed to do so.

The property tax opt-out already allows local officials to raise additional tax revenues.  I do not support expanding the ability of local governments to raise taxes, especially when such a raise cannot be referred to a public vote.

In my first State of the State Address, I said, “A recession is the worst time to raise taxes, and if you send me a bill to raise taxes, I will veto it.”  South Dakota has recovered from the recession, but I continue to believe that it is a mistake to raise state taxes, or to make it easier to raise local taxes.  For that reason, I oppose this bill and I ask that you sustain my veto.

Respectfully Submitted, Dennis Daugaard

Local elected officials at the city and county level make decisions each day and at budget time, which affect the quality of life of the people they are elected to serve. It is a tough job.

Many times made tougher because elected representative in the State House, Senate and Governor’s chair, live and breathe the “no new or increased taxes” mantra. In our state that mantra sells well.

However, when it comes to having money for police, fire, roads, it is the local elected official who has to live with the mantra, even when it may be harmful to the very people they are elected to represent and protect.


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