Governor Dave Heineman says tax cuts are his top priority in this, his last legislative session as governor. Heineman wants across-the-board cuts in property and income taxes. He points to the state’s half-billion dollar reserve fund as a good basis to start the tax cuts.
Senator Tyson Larson, of O’Neill, is a member of the Unicameral’s Appropriations Committee and says those reserve dollars can only be used once.
“If we do partially fund tax cuts through the cash reserve, you’re hoping the dynamic modeling will move forward enough and our economy will grow fast enough,” Larson says, “by using that money today, it’ll spur the economy enough to pay for those ongoing tax cuts in the future.”
Larson remains unconvinced it’s the best financial route for the state to take.
“When you look at it to the tune of $500-million, you have to question it and look at the mathematical models moving forward,” Larson says. “I’m not sure the math supports it.
Larson says changes to property tax levies could be done without tapping into the state’s reserve fund.
“The property tax relief, moving that valuation from 75 to 65%, won’t take general fund dollars,” Larson says. “It’ll be changing what the counties can levy and what the schools can levy from property tax owners. There’s some money there but we don’t want to overspend what we have in the cash reserve.”
In the governor’s State of the State address earlier this month, he detailed how a reduction in the state cash reserve and prudent spending over the next three years could make as much as $500 million available for tax cuts.
By Jerry Oster, WNAX, Yankton