Week 7 Update

Work in Pierre has reached the point where many of the issues have been voted on in each chamber. I enjoyed being able to elevate the issue of the need to close a loophole where oil pipelines don’t pay into any cleanup fund at the Federal or State level. SB 146 is the bill I introduced that failed by one vote in the Senate Transportation Committee. This bill would require a 1 cent per barrel of oil on pipelines that don’t currently pay into the Federal oil spill cleanup fund. Keystone pipeline operated by TransCanada is exempt from the Federal oil spill fee because it is not considered crude oil. SB 146 would close that loophole and require pipeline companies to pay into a state cleanup fund to protect our landowners and communities. Trans Canada has already received $14 million in state sales tax refunds from SD when they constructed the original Keystone pipeline. I won’t give up on this issue until we can guarantee our land is fully-protected. Country of origin meat labeling was struck down at the federal level due to issues with the World Trade Organization. I partnered with the Stockgrowers Association to introduce HB 1228 which would have created a state retail country of origin labeling program.

I have enjoyed being involved in many discussions and debates dealing with the education funding proposals. Thankfully the House was able to pass HB 1182, the Governor’s half-cent sales tax increase legislation so that we can debate it on the Senate side. I don’t support all aspects of HB 1182 but I do know that we must do something meaningful to provide more funding for increased teacher pay. The half cent increase in sales tax will have an effect on our poor people whether they are purchasing food or clothes. I am confident we can find ways to lessen the burden on poor people through some more mobile food pantry investments. This half cent sales tax is also applied to the machinery excise tax. I am working to find ways to get the machinery sales tax separated from the increase in sales tax. A few years ago there was a trade for an increase in the machinery excise tax while taking the tax off parts and repairs. I realize it’s important to have everyone help contribute for the teacher pay increase and that will still happen regardless of a machinery tax increase. Many states around us do not have a machinery sales tax at all and only a few states have an equipment tax similar to South Dakota’s. Please stay tuned for potential opportunities to keep the equipment excise tax still at 4%.

SB 131 is the companion piece of Blue Ribbon Task Force legislation to HB 1182. This bill passed the State Senate recently and contains many of the components to carry out the increased teacher pay plan. There are changes to capital outlay, student to teacher ratios, other fund revenues, and a new accountability board to ensure the increased state money goes to teacher pay. I authored an amendment that was applied to SB 131 to give an exception to new wind energy projects to maintain the taxes paid to the local school districts for five years. The Governor’s plan in SB 131 will count all of the wind taxes and other fund revenues as local effort for school districts. This is a change in the practice that currently exists where school districts have received these other funds outside of the funding formula. We still have plenty of debate over where the magic number should be placed on teacher to student ratios. This will have a direct effect on the small school districts who sometimes have smaller class sizes and extra teachers according to the Governor’s teacher plan. I am committed to finding solutions to this issue along with the machinery sales tax and the burden of increased food tax.

SB 159 received enough support in the Senate and will now be discussed in the House which will allow insurance companies to give a voucher or credit for scholarships to students who want to attend a non-public elementary or secondary school. I haven’t supported this interesting concept but I have great respect for those who believe in this idea and I know our students do receive a quality education in either a public or private school environment.

Medicaid Expansion continues to be a real issue that affects many South Dakotans and will be a huge investment in our State. We are waiting to receive the necessary contracts from the Federal government to ensure the arrangements are made for Indian Health Services and current Medicaid payments. Please offer your support to the Governor and my fellow legislators because Medicaid Expansion is the right thing to do for our people and our state budget. I welcome your comments and questions on legislation and thank you for the opportunity to represent northeast South Dakota in the State Senate. My phone is 949-2204 and email is sen.frerichs@state.sd.us.