PIERRE | The future of highway funding, and the potential to drive legally at 80 miles per hour on the long rural stretches of interstate in South Dakota, are now up to Gov. Dennis Daugaard.
State lawmakers passed sweeping legislation Friday that, if the governor agrees, would:
• Raise the motor-fuels tax by six cents per gallon on April 1, to 28 cents;
• Add 1 percentage point to the excise tax on vehicle purchases, making it 4 percent;
• Increase license plate fees by 20 percent on noncommercial vehicles starting in May;
• Allow counties and townships to impose additional property taxes for roads and bridges; and
• Let motorists go 80 rather than 75 mph on I-29 and I-90.
The measure, SB 1, was the first bill introduced in the 2015 legislative session. Its House passage at about 6:15 p.m. CDT Friday made it the second-to-last bill to pass.
Only the state government budget for fiscal 2016 remained in the final hours of the last day of the 2015 session’s main run.
The hero of the day for many was Sen. Mike Vehle, R-Mitchell. He is chairman of the Senate Transportation Committee.
Vehle last year led the Legislature’s interim study of highway needs and highway financing. That study produced the first version of the measure that passed, SB 1.
Vehle also played a significant role in the governor's reaching the conclusion that he would consider tax increases for highway funding this year.
The Legislature had to override Daugaard’s 2011 veto of license-plate fee increases.
The state tax on gasoline and diesel for highway use last was increased in 1999 when Bill Janklow was governor.
The two subsequent governors, Mike Rounds and Daugaard, both opposed highway-tax increases until Daugaard’s switch this year.
Vehle said the House and Senate negotiators were deadlocked Thursday on the fuel-tax portion.
The Senate had voted for annual two-cent increases over eight years, while the House wanted annual two-cent increases over three years.
The idea that made the deal came on Friday morning in a conversation between Rep. Steve Westra, R-Sioux Falls and Vehle. The House offered to put all six cents into effect right away, so more money could be collected and more projects could commence sooner.
The fuel tax hike annually will generate an estimated $40.5 million while the excise tax increase will produce an additional $27 million to $30 million.
Most of those amounts would go to state work, but some will be placed into a local bridge fund by the state Transportation Commission. That sub-amount hasn’t been set.
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The license plate increases are expected to bring in $18 million total for the counties, with each county’s share depending on the vehicles registered there.
Counties and townships also will be allowed to add property taxes for roads and bridges, subject to referral votes.
After the Senate voted 25-9 for passage of SB 1 in its final version late Friday afternoon, Sen. Ried Holien, R-Watertown, stepped over to Vehle’s desk to congratulate him. They shook hands and smiled.
“Somebody asked how my day has been,” Vehle said later, as he hurried to another meeting. “I said, 'You remember those things called yo-yos.'” He motioned up and down. “That’s what it’s been like.”
The two leaders from the study committee, Vehle and Rep. Mary Duvall, R-Pierre, each received the honor of speaking first in their respective chambers for the bill during the final debates.
“The bottom line is we have a $14 billion asset in the state and we need to take care of it,” Duvall said.
She referred to SB 1 as “a first step.”
Rep. Dennis Feickert, D-Aberdeen, said his concern is public safety. “Today is the day we need to move forward with this funding,” Feickert, a former Brown County Commission member, said.
The House of Representatives voted 55-11 for the package a short time later.
House Republican leader Brian Gosch said Vehle was the only senator who came to the House Transportation Committee meetings and was the only senator who came to the House State Affairs Committee meetings.
Gosch said he couldn’t find two people who wanted the same exact things in the bill. “They’re just all over the board,” he said. “Let’s give this a try. Let’s see how it goes.”
He defended the 80 mph speed limit after House Democratic leader Spencer Hawley of Brookings said no one testified for it or against it regarding safety.
“There were no opponents on the 80 mile per hour,” Gosch said. He added that neither Wyoming nor Utah has reported increased fatalities since going to 80.
Rep. Julie Bartling happened to get the last word and made the most of it.
Bartling, D-Gregory, said she decided to vote for the package because the need had been demonstrated.
She said she now expects “a very genuine conversation” next year on the need for better teacher salaries.
The legislation drew criticism during the debates, including a detailed explanation by Sen. Jim Peterson, D-Revillo, about the unusual tiered approach for county and township road taxes.
Peterson said a homeowner with a $100,000 house in Milbank would pay much more in additional property taxes for roads than the owner of a $100,000 house in Brookings or Watertown.
The discrepancy is worse for farmland in those counties, he said.
“Somehow we have to correct that,” Peterson said. “It’s something you have to keep on your radar. You want to have equality in taxation.”