Final Week ended March 13

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The Main Run of the 2015 Session ended at about eleven-thirty on Friday night, March 13. As usual, the final bill to pass was the state’s budget bill for the fiscal year which starts July 1 of this year. The total budget is about $4.3 billion, which includes general funds, federal funds, and other funds. Despite soft revenue projections, legislators voted to increase education funding by two percent, allow up to 2.5 percent more for medical providers, and allow a two percent inflation and two percent market value increases for state employees. Under the General Appropriations Act, education will again account for the largest portion of general fund spending, at 45%.

One of the other bills to pass the last day was the road and bridge funding proposal. I was the House prime sponsor of SB1, the road funding package offered by the Interim Highway Needs and Financing committee. This bill was amended numerous times, including a provision to change the speed limit on the Interstate highways to 80 mph.

As finally passed, SB1 will provide about $86 million in additional funding for state highways, local roads, and bridges. Some of the key provisions:
– Increase the vehicle excise tax from 3% to 4% = $27.2 million
– Increase the motor fuel tax and the ethanol fuel tax by 6 cents per gallon = $41 million
– 20% increase in license plate fees = $14.8 million
– Increase the license rate for noncommercial ag trucks from 60% to 70% of the commercial rate = $2.5 million (This is slated to increase again, to 80% of the commercial rate, on July 1 next year)

The bill also allows counties to raise the wheel tax from $4 to $5 per wheel, and increase wheels from 4 to 12. It also allows counties to increase property taxes for roads and bridges, using the following tiered system:
– Up to $1.20 / $1,000 of taxable valuation if the total taxable valuation in the county is $1 billion or less
– Up to $0.90 / $1,000 of taxable valuation if the total taxable valuation in the county is between $1 billion and $2 billion
– Up to $0.60 / $1,000 of taxable valuation if the total taxable valuation in the county is over $2 billion.
Townships would be allowed to assess up to 50 cents per $1,000 for road purposes.

Legislators will return to Pierre on Monday, March 30, to consider three bills vetoed by the Governor. SB100 creates a new “leased residential” property classification for taxation purposes. SB136 stops a tax-on-a-tax for rural electric cooperatives that provide service within a municipality. SB199 exempts amateur sports coaches from sales and use tax. The Governor’s theme in vetoing these bills is that they potentially erode the tax base we rely on to fund government services.

If you have questions, please feel free to contact me at maryduvall@midco.net.

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