- Associated Press - Monday, February 8, 2016

PIERRE, S.D. (AP) - The half-cent sales tax increase that would help fund Gov. Dennis Daugaard’s teacher pay plan passed its first legislative test Monday, but it now faces a competing push from the House Republican leader to increase salaries without raising taxes.

The House Committee on Appropriations voted unanimously to advance the sales tax plan. It could be debated on the House floor Wednesday.

Education advocates celebrated the passage of the bill, which also received no opposing public testimony.

“I’m grateful to everyone who testified to present that united front that this is right, this is what we need and this is what we’re going to do for our students,” said Mary McCorkle, president of the South Dakota Education Association, a professional organization with more than 5,000 members.

Pressure has mounted to raise teacher pay, which a state task force studying education funding said is the lowest of the 50 states and District of Columbia. But it takes two-thirds support in each chamber to pass a tax hike through the Legislature.

Predicting that the sales tax increase is unlikely to succeed, House Majority Leader Brian Gosch appointed a group of lawmakers to search for a contingency plan, and the governor received the results of their efforts last week.

Daugaard is “optimistic” about his proposal and dedicated to “funding a solution this year,” Chief of Staff Tony Venhuizen said in a statement.

The sales tax increase would raise more than $100 million in the upcoming budget year, most of which would be put toward helping raise the state’s target average teacher salary to $48,500 per year. If approved, it would be the first permanent increase to South Dakota’s sales tax rate of 4 cents per dollar in nearly half a century.

About $62.4 million from the sales tax hike would go toward teacher salaries and about $40 million would go to property tax relief, according to the governor’s office.

Gosch said he would “prefer to not take more taxpayer dollars out of people’s pockets.”

One alternative proposal would use current state dollars phased in over three years to add accountability into the system, with $30 million put toward teacher pay in the first year and $20 million each in the second and third years, he said. Gosch said if the money didn’t go toward teacher pay, less would be forthcoming in the next year.

Another plan would shift revenues schools use to pay for facilities and maintenance to be put toward educator salaries.

Gosch said he is waiting for feedback from Daugaard before publicly releasing all of the details.

Venhuizen said Daugaard wouldn’t comment about private conversations with legislative leaders, but added that the governor “feels strongly that a solution must be based on sound budget projections.”

Democrats unsuccessfully pushed an amendment to the sales tax bill during the Monday hearing that would have routed the roughly $40 million that Daugaard proposed for property tax relief back toward teacher pay.

“We need to be bolder,” Democratic House leader Spencer Hawley said. “We need to take that big step, and do it this year, and do it right.”

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