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State budget cuts endorsed for business sales tax credit and high schoolers taking college courses • South Dakota Searchlight [1]

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Date: 2025-02-24

Ensuring responsible use of taxpayer dollars in a tight budget year is the mantra for South Dakota lawmakers on the Legislature’s budget committees this session, and that continued Monday as legislators endorsed a temporary repeal of a business sales tax credit and a reduction of assistance for dual-credit students.

The House Committee on Appropriations met Monday morning at the Capitol in Pierre. Members made decisions on several proposed budget cuts and also rejected some proposals to initiate programs with state funds.

Lawmakers include sunset clause on business tax credit repeal

South Dakota could add $6.8 million to its annual budget by repealing a $70 monthly credit for businesses that remit sales tax online. Bureau of Finance and Management Commissioner Jim Terwilliger told lawmakers on the committee earlier this session the program is no longer needed as an incentive because most businesses now remit their taxes electronically.

South Dakota Retailers Association Executive Director Nathan Sanderson opposed House Bill 1037 earlier in the session, saying the program helps cover fees charged to businesses by credit card companies on each transaction.

The committee voted to include a sunset clause on the program’s repeal in fiscal year 2028. Rep. Chris Kassin, R-Vermillion, proposed the amendment, saying the program would be reinstated in three years unless future lawmakers choose to make the repeal permanent.

Although still opposed, Sanderson told South Dakota Searchlight the sunset “is a better option than repealing it outright.”

“The legislative priorities when it comes to spending and revenue generation have not all been worked out yet,” Sanderson said. “The Legislature is trying to keep a variety of options alive.

Lawmakers unanimously endorsed the bill, sending it to the House floor.

Dual credit cut earns endorsement

South Dakota high school students will pay 50% more to take dual credit college courses if legislators adopt the governor’s plan to reduce the state’s contribution to the program. The move would save about $1 million a year, the Governor’s Office projects.

Currently, students pay one-third of the cost per credit hour, $50.84, while the state pays the rest. House Bill 1040 would split the cost in half, with the student and state each paying about $76 per credit hour.

Education professionals worry that the increase would burden families and hamper their ability to enroll students. The program benefits not only them but the state as well, said Ashley Seeklander, government relations chair for the South Dakota School Counseling Association and a counselor in the Aberdeen school district. She said the program introduces students to higher education options at public universities and technical colleges.

Rep. Terri Jorgenson, R-Rapid City, said the program still exists for families to use, allowing lawmakers to be “good stewards of taxpayer dollars” otherwise.

Lawmakers endorsed the bill in a 6-3 vote, sending it to the House floor.

Teacher program, adoption home studies, school lunches, McCook Lake

House Bill 1039 would have repealed an incentive program for teacher and counselor national certification, saving the state roughly $88,000 a year. The committee amended the bill to keep the program intact but stop accepting new applications. That would allow staff who worked to earn their national certification to keep the benefit promised to them, said Rep. Al Novstrup, R-Aberdeen.

“Promise made and promise kept,” Novstrup said.

The committee also amended House Bill 1005, with the amendment requiring the state Department of Social Services to pay up to $1,000 toward the cost of public and private adoption home studies, rather than repealing the state’s contribution as the original bill proposed. Families hoping to adopt children are required by state law to have a licensed child placement agency, certified social worker or the department determine if a home is safe for the adoptive child.

“DSS has always paid for that study for children within our care, but legislation was passed two years ago that would require us to pay for all of those within the state,” Departmental Chief Financial Officer Jason Simmons told the Joint Appropriations Committee earlier this session.

The department currently pays up to $3,000 per home study, Simmons said. The original bill’s repeal of the state’s responsibility to cover home study costs would have saved the state roughly $312,000 annually.

The committee rejected several other bills, including legislation requiring the state to reimburse school districts for providing meals to students eligible for free or reduced-price lunches, and legislation to fund continued recovery efforts at McCook Lake following June 2024 flooding.

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[1] Url: https://southdakotasearchlight.com/2025/02/24/state-budget-cuts-endorsed-business-sales-tax-credit-high-schoolers-taking-college-courses/

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