On July 2nd the Highway Needs and Financing Interim Committee held a public hearing in Aberdeen, SD. This came shortly after the Governors Agricultural Summit in Deadwood, South Dakota. In the transportation issues portion of that summit Senator Vehle and two other panelists used the majority of their time to push for higher gas taxes. Fortunately this public hearing in Aberdeen went much better than the transportation portion of the Ag summit.
The crowded room of constituents and locally elected officials may be the reason Vehle was toned down in his push for higher taxes. I heard from more than one participant that they had been emailed and/or robocalled by special interest groups asking township board members and any other locally elected person to attend.
The Highway Needs and Financing legislative interim Committee had the four following legislators in attendance:
- Representative Dick Werner, District 22 – Beadle, Kingsbury
- Senator Mike Vehle, Committee Chair, District 20 – Aurora, Davison, Jerauld
- Senator Jim White, District 22 – Beadle, Kingsbury
- Senator Chuck Welke, District 2 – Brown, Clark, Hamlin, Spink
Each committee member kept their opening comments brief, as to allow for more public input. Vehle spent some time pining about the potential loss of the federal highway trust fund. He also mentioned the reason SD roads are currently in as good of shape as they are is due to the $183 million received in federal stimulus funds. Vehle also seemed to be quite mad that Congress has to offset any federal dollars going to transportation that comes from the general fund. It was ironic watching a Republican Senator in the SD State Legislature bemoaning one of the few victories gained by fiscal conservatives in DC. I guess he was correct when he said “roads are non-partisan”; elected officials from both parties want to raise taxes and spend more federal dollars on the roads.
Brown County Commissioner Mike Wiese testified at the hearing. He said the increase in fees from licenses didn’t work. Going back in history he pointed to the removal of the personal property tax (commonly known as the liars tax) in South Dakota as a loss of revenue for the counties. Then in the 90’s the state came up with a method to fund schools that further capped the amount of revenue a county could collect. Weisse says the increased fees from licenses was little more than SD making good on a promise to fund roads. But that promise has only restored some lost revenue to the counties, and not allowed the counties to collect the revenue needed to maintain or improve roads. I’ve spoken with Wiese on this issue before. He does make a strong case that counties have been squeezed. Yet at the same time I’ve seen some pork in the County budget that could be trimmed…
Brown County highway superintendent Dirk Rogers testified later in the hearing. He had a lot to say, and it was all well worth listening to. A big point he made was that oftentimes receiving federal dollars on a transportation project would actually hurt the county. The requirements placed on such projects by the federal government often raise the cost of doing the project to a large extent. He said often the money received from the federal government only covers the additional costs to the project that were caused by the federal requirements. If the county does the project without the federal government involved it would be done much cheaper; and often much better quality because it is local experts used.
Rogers also noted that Brown County has 480 miles of asphalt on county roads. About a hundred miles of these asphalt roads were in fact a ‘gift’ from the state when the new State Highways were made. Many of the county’s asphalt roads connect with gravel roads at the county line. With so much road to deal with (gravel and asphalt) Brown County has decided to make one road leading into each community non-posted. That allows the county to focus on getting each town having a road that can handle modern farm transportation needs. Of course that also means something will need to be done with other county roads. Rogers didn’t really say what should be done with them. Personally I think it is time to grind up all the non-necessary asphalt and/or get rid of some unnecessary portions of road altogether.
Earlier in this post I said Vehle was on much better behavior in this meeting than he was during the Ag Summit. Yet he did have a “I told you so” smirk on his face when Marshall County Commissioner Paul Symens said a use tax is the fairest way to get transportation revenue and the fuel tax needs to be increased. Symens did mention one point I felt sometimes gets overlooked in this discussion. Many people (including myself) say its time to replace bridges with culverts. But as Symens notes, this is not a good solution for all instances. Culverts can replace a lot of bridges. But some locations would simply wash out a culvert after a few years. I think the answer it to determine which bridges can be safely replaced with culverts and start there. That will leave far fewer bridges for the counties to maintain.
When Brown County Commissioner Duane Sutton testified he focused on the fact counties have few ways to raise revenue. He state opt-outs don’t work in Brown County. I agree with Sutton; mostly because the residents of Aberdeen don’t want to pay more in taxes to build bigger roads for rich farmers (I’ve heard that statement often in recent years from Aberdeen residents). Sutton wishes they would have tied the nickel tax in the 90’s with inflation. He also wants the legislature in Pierre to create more local options for counties to raise revenue. He said it would then be the Commissioners taking heat for tax hikes, and not the legislature. Another area Sutton mentioned was a half-cent sales tax increase in South Dakota that would go directly to highway funding. Finally Sutton said an option is to pass more highway cost on to vacationers. This mirrored a proposal from Vehle earlier. I think that is a misguided plan. Tourism is not what I see tearing up county roads. What I see tearing up county roads is agricultural equipment.
A farmer from the Hecla Township said the townships get very little money to deal with their road problems. He also highlighted the fact that drainage issues have to be worked out before roads can be fixed. And along those lines, some of the regulations from the Clean Water Act (CWA) have increased the costs of putting in culverts. The CWA regulations have priced culverts out of range for townships to be able to handle financially. This is another example of federal intervention making it hard for local governments to maintain roads.
A landowner mentioned that the county posting roads has put more traffic on township roads. This has caused the township roads to deteriorate faster than they would otherwise. This landowner also mentioned a tax on every wheel for a truck or trailer would help raise more revenue. That is an idea I heard mirrored a few times throughout the meeting.
A former Commissioner from Dickey County, ND, mentioned SD is doing much better than ND about posted roads. A study had been done a while back showing that SD farmers are more complaint with keeping off the roads when weight restrictions are enacted. This talking point seemed to be aimed at Sen Vehle. Many times up to this Vehle had tried to get testifiers to say farmers are using the roads too often when they are posted. Personally I work with a lot of farmers in the Brown County area; and I know more than a few that have lost money because they couldn’t bring their product to market because of posted roads. They didn’t take their goods to market at the best time because they followed the post and wish to keep the roads in good shape. There are some exceptions to this, but overall I think farmers have been pretty complaint.
Mike Jung spoke for a few minutes. He said a combination of solutions is needed so it doesn’t put too much burden on one area of taxation. He would like any solution to be tied with inflationary increases.
A representative from the SD Association of Towns and Townships spoke for a few minutes. He said the average township in South Dakota has about thirty-five miles of road. He also promoted the 1/2 cent sales tax increase if it went to transportation. He promoted a small tax on dyed diesel. Finally he promoted the increase of the wheel tax, and said some of the extra revenue should go directly to townships. There didn’t seem be a tax he doesn’t want to raise. He also mentioned many farmers and landowners would willingly do snow removal and culvert replacements by their land; but liability issues keep that from happening. I would say that perhaps its time to allow local landowners to actually participate in infrastructure maintenance and improvements.
The finance officer from Groton wants a full cent sales tax increase. Further, she said the farmers should pay commercial prices for licenses. I agree with her second recommendation. Farming is a business. All businesses should be treated equally.
A Day county resident had a different idea for raising more revenue. He thinks the wheel tax should be based upon the amount of grain hauled. I’m not sure about that one. It sounds good in theory, but in reality I’m not sure such a system would work.
Overall it was an interesting evening of testimony. There seemed to a consensus that counties and townships need more revenue. The main question is how to get that revenue. A sales-tax increase seemed to be mentioned the most, followed by an increase in the fuel tax. No matter what, it seemed the majority think more of the ‘new’ revenue should go directly to counties and townships.
Personally I am opposed to any tax increases. However, if these local tax increases mean removing our reliance upon the federal government then I would be for it. If South Dakota resisted accepting money from the Federal Highway Trust Fund it would allow us to maintain our infrastructure at a fraction of the cost it does now. Such a move would also allow us as a state to show the Federal government is not needed for South Dakota to survive. The State of South Dakota has plenty of revenue currently to deal with its roads. The question though is whether the big spending legislators in Pierre are willing to give up their pork projects and focus on infrastructure. I somehow doubt that will happen. Just this year Governor Daugaard threw $30 million at ‘economic development’. That money would have been better spent on infrastructure and education. Maybe in his second term Daugaard will focus on infrastructure development, and forget about the corporate welfare he currently promotes in the name of economic development.