- Associated Press - Tuesday, January 13, 2015

PIERRE, S.D. (AP) - Gov. Dennis Daugaard on Tuesday proposed hiking taxes by roughly $50 million to fund road and bridge projects, only half the amount being sought under a legislative plan to address one of the most significant issues facing South Dakota lawmakers this year.

Daugaard warned during his annual State of the State speech that without investment, South Dakota’s roads and bridges would only become more costly to maintain. But he said revenue increases need to be restrained enough to gain the two-thirds legislative support to raise taxes.

“Our entire economy - our very wellbeing - depends on road infrastructure,” he told lawmakers, who gathered on the first day of the 2015 legislative session to listen to the speech in the House chamber. “And right now, our roads are underfunded.”

A legislative plan calls for increasing infrastructure funding by more than $100 million in its first year through fuel and vehicle taxes and fees.

Sen. Mike Vehle, the bill’s main sponsor called the governor’s plan “too frugal.”

“Although we may differ on how to solve the problem, at least we agree on the need,” Vehle said.

Senate Majority Leader Tim Rave, R-Baltic, said he had “reservations” about the legislative proposal, which came out of a panel studying South Dakota’s transportation needs ahead of the session. A provision to tax fuel typically used in farm equipment drew the ire of agriculture groups, and Rave said he shared similar concerns.

That provision didn’t show up in Daugaard’s plan, which raises nearly $40 million in state revenue in its first year by increasing the vehicle excise tax and raising the gas tax. It also features built-in increases in the fuel tax to help ensure the same problems won’t arise again.

The plan is also expected to raise nearly $11 million in local revenues in its first year through vehicle registration fee increases.

House Minority Leader Spencer Hawley, D-Brookings, said “for the most part” Democrats are supportive of Daugaard’s plan.

But Democrats, who are the minority in both chambers, lamented that Daugaard didn’t specifically address South Dakota’s low teacher pay or expanding the state’s Medicaid program.

“The governor said roads and bridges are our most valuable asset,” Senate Minority Leader Billie Sutton said. “I would hold our kids and teachers are our most valuable asset in South Dakota.”

Daugaard also pushed lawmakers, who will also be building a budget for the next fiscal year, to support his plan to overhaul South Dakota’s juvenile justice system. The plan includes increasing community-based programs rather than committing youth to the Department of Corrections.

“Once again, we can join together to strengthen our state and ensure that our best days are yet to come,” the governor said.

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