- Associated Press - Friday, March 13, 2015

PIERRE, S.D. (AP) - Gov. Dennis Daugaard will sign a proposal that raises more than $80 million in its first year for road and bridge funding, a plan that would immediately hike the state’s fuel taxes by 6 cents per gallon.

The House voted 55-11 to approve the bill shortly after it passed the Senate on Friday afternoon. The measure raises road and bridge funding through increases in fuel taxes, fees and other assessments. Transportation funding has arguably been the most hotly debated issue lawmakers considered this session.

The scope of the fuel tax hikes had been the main sticking point in negotiations between the two bodies. The Senate and the Republican governor’s administration had hoped for a larger increase over a longer period of time, but Daugaard praised lawmakers for delivering one of his key priorities for the 2015 legislative session.

Tax increases require two-thirds legislative support to pass.

“I think the need was demonstrated,” Daugaard told The Associated Press. “I am grateful for the courage of the legislators who, while reluctant to raise taxes, realized that in some situations we need to do what we need to do to protect our infrastructure.”



Debate over the proposal became emotional on the floors of both chambers, and many lawmakers who eventually voted for the bill decried its contents even as they recognized the need it would help fill.

“I don’t care for the bill very much, but we do need to get some work done on our roads,” said Sen. Scott Parsley, D-Madison.

Another piece of the proposal would increase the maximum interstate highway speed limit in law from 75 mph to 80 mph. Secretary of Transportation Darin Bergquist has said the state Transportation Commission has the authority to set lower speed limits.

Sen. Mike Vehle, R-Mitchell, has been a key proponent of addressing the state’s transportation funding needs. Vehle said he would have preferred to tackle the transportation funding issue with more resources, but he said the frontloaded fuel tax increases will make a significant amount of money available immediately.

During negotiations, Senate legislators unsuccessfully pushed their House counterparts to support larger fuel tax increases over a longer time period, and the 6-cent immediate increase is the compromise lawmakers brokered. That will hike the state’s fuel taxes on gas and diesel from 22 cents to 28 cents, for example.

“It’s not what I would have liked to have seen, but I think this gets us a long ways down that path,” Vehle said before the vote. “It’s a tough deal to raise a tax, and I’m not for raising taxes, but when I do do it, I want to … do it right and be done with it.”

The measure also increases the state’s motor vehicle excise tax from 3 percent to 4 percent and hikes license plate fees by 20 percent, among other provisions. The House successfully defended their change to the bill to further raise vehicle license plate fees.

The additional hike means millions of dollars in increased revenue. But House lawmakers were successful in keeping the overall fuel tax increases at 6 cents, down from the Senate’s proposed 16 cents over 8 years.

Lawmakers in both of the heavily Republican-controlled chambers also pushed back against the revenue increases included in the bill.

“If your Republican supermajority isn’t going to raise your taxes, who will?” Republican Rep. Dan Kaiser, R-Aberdeen, asked his colleagues sarcastically.

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