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Impact of grocery tax ballot measure could range from $134M to $646M, legislators told • South Dakota Searchlight

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Impact of grocery tax ballot measure could range from 4M to 6M, legislators told • South Dakota Searchlight


A new analysis of the Nov. 5 ballot measure aiming to eliminate state sales taxes on groceries projects state revenue losses ranging from $134 million to $646 million annually.

On Tuesday in Pierre, the Legislative Research Council presented the analysis to lawmakers on the state budget committee. Council employees provide research, analysis and administrative support to legislators.

Backers of the citizen-initiated ballot measure only aim to prohibit state sales taxes on groceries, but the measure references items sold for “human consumption.” The wide range of potential revenue losses depends on how “human consumption” is interpreted. 

“This is why words matter,” said Jeff Mehlhaff, the council’s chief fiscal analyst. 

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A narrow interpretation limits the measure’s impact to groceries. A broader interpretation includes many goods and services used by people, based on definitions and interpretations of “consume” and “consumption.” Utilities, toiletries and car repairs are some examples cited by the council as goods and services technically “consumed” by humans.  

The narrow definition would reduce state revenues by an estimated $133.6 million. The broader interpretation would result in an estimated revenue loss of up to $646.2 million. The state’s total annual budget is $7.3 billion.

A coalition formed to oppose the ballot measure says that in addition to affecting state sales taxes, the measure would affect city sales taxes, due to a state law that say cities cannot tax anything the state doesn’t tax. Yet the actual language of the measure says “municipalities may continue to impose such taxes.”

New group argues grocery tax repeal could lead to income tax; sponsor calls claim a ‘fool’s errand’

When asked about that, Mehlhaff said, “I’m just leaving that where it is because it says municipalities may continue to impose such taxes.” 

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Rep. Tony Venhuizen, R-Sioux Falls, said voter passage of the measure could precipitate the worst budget cuts since the 10% across-the-board reductions during the 2011 legislative session.

“If the people vote for this, they need to know that when we come during January, we are not going to be doing increases for anything,” he said. “We’re going to make significant budget cuts.”  

Retailers such as Walmart, Sam’s Club and Dollar General, which classify a significant portion of their sales as groceries and consumables, could see a substantial portion of their sales untaxed under the new measure, according to the analysis. It estimates that 59% to 81% of sales at those retailers could be affected.

The analysis says the Legislature would need to clarify the definition of “human consumption” to determine the measure’s full fiscal impact, should the measure pass.

Proponent says LRC recommended language

Rick Weiland runs Dakotans for Health, the group behind the ballot measure. He said the measure initially said “anything sold for eating or drinking by humans,” but was changed to “anything sold for human consumption” because the Legislative Research Council recommended it.

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A 2022 letter to Weiland from the council suggested the initial wording was “overly vague, inviting various interpretations in determining its meaning.” The council recommended using terms like ingestion, chewing or consumed.

“These terms seem to be more precise than ‘eating and drinking,’ as they may better capture the various elements of food and beverage consumption,” the council wrote to Weiland. 

Following this advice, Weiland said, his team revised the language to “anything sold for human consumption, except alcoholic beverages and prepared food.” 

Attorney General Marty Jackley has since stated that “human consumption” is not defined by state law, and its common definition encompasses more than just food and drinks. 

Weiland’s attorney sought clarification from Jackley in a February 2023 letter and email, but said he received no response.

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Mehlhaff told budget committee members that the language used in the final draft is not the council’s recommendation, pointing to another line in the 2022 letter that offered a possible rewrite: “The retail sale of any food or food ingredient for any purpose is exempt from any tax imposed by law.”

Mehlhaff said if the measure passes, lawmakers could attempt to amend or repeal it before its effective date on July 1, 2025. 

 



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State officials peppered with questions on price tag for new men’s prison • South Dakota Searchlight

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State officials peppered with questions on price tag for new men’s prison • South Dakota Searchlight


Lawmakers expressed frustration Tuesday in Pierre over the uncertain price tag for construction and operations of a proposed men’s prison in Lincoln County.

Members of the Legislature’s Appropriations Committee also had pointed questions for Department of Corrections officials on alternative sites for the project, which has sparked a lawsuit from nearby neighbors and represents the most expensive taxpayer-funded capital project in state history.

“I’m just flabbergasted that we’ve not yet wrapped our arms around this as a total package,” said Rep. John Mills, R-Brookings.

Wealth of controversies, outbreaks of violence spark questions on prison oversight

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Lawmakers have already dedicated more than $569 million to the project across the past two legislative sessions, including $62 million in preparatory spending. The rest sits in an incarceration construction fund.

The guaranteed maximum price for construction is expected in early November, DOC Secretary Kellie Wasko and Finance Director Brittni Skipper testified on Tuesday. That fixed price wouldn’t change, Skipper said, even if inflation or other construction costs increase.

Some lawmakers, including Sen. Jim Bolin, R-Canton, struggled to understand how a company could make such a promise. 

“If you’re talking about an $800 million project, maybe more, if you make a mistake on that, you can bankrupt your whole company,” Bolin said.

Skipper told Bolin the DOC has a construction manager at-risk, JE Dunn and Henry Carlson Construction, who will build three years of projected inflation into the promised price.

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“It’s in their contract to provide to us a guaranteed maximum price,” Skipper said, noting that the DOC has a similar arrangement for a new women’s prison under construction in Rapid City.

Rep. Chris Karr, R-Sioux Falls, was one of several lawmakers to push Wasko and Skipper about the potential ongoing costs associated with the prison once it’s complete. Karr and other committee members asked about prison population growth and staffing projections.

“If we’re going to make this huge investment, are we going to be able to house everybody?” Karr said.

Wasko said she doesn’t trust inmate population projections any further than five years out. 

She said too many things can change, including when lawmakers create new felony crimes or toughen penalties. They did that with 2023’s “truth in sentencing” bill, which now forces those convicted for violent offenses to serve most or all of their prison terms.

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“Our rate of incarceration is not slowing down. It’s actually speeding up,” Wasko said. 

South Dakota Department of Corrections Finance Officer Brittni Skipper, left, and Corrections Secretary Kellie Wasko testify before the Legislature’s Appropriations Committee on July 30, 2024. (Courtesy SD.net)

Even so, she said, the 1,500-bed proposal would offer the agency breathing room, as it’s designed to be a maximum-security facility capable of managing overflow from other areas of the system. The prison would take on most of the inmates now housed at the penitentiary in Sioux Falls.

Rep. Tony Venhuizen, R-Sioux Falls, said he understands that projections can change, but also said it’s important for appropriators to have a better sense of what they’re committing to.

“This could be a pretty considerable ongoing cost, and I do think at some point during the next session, we’re going to need a ballpark of what that might be,” Venhuizen said. 

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Skipper said the previous ballpark estimates anticipated 130 more employees and approximately $15 million in ongoing funding.

Sen. Red Dawn Foster, D-Pine Ridge, wanted to know if the DOC had consulted with the state’s Supreme Court, Unified Judicial System or Attorney General’s Office to drill down on what to expect in terms of offender population growth. 

Wasko said the DOC hadn’t reached out to those agencies to talk about projections.

Opposition won’t cause state to change prison location, official says

Steve Haugaard, a Republican former lawmaker and one-time primary candidate for governor, seized upon that point during his testimony, which he offered via video feed later in the afternoon.

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Haugaard argued that lawmakers were spending too much money on prisons without clear goals for managing corrections and criminal justice as a whole. Haugaard argued that “the building is going to control the overall policy,” and said policy guidance ought to come first.

Upon hearing that the DOC hadn’t consulted with the courts or attorney general, he said, “I just wonder what are we doing?” Haugaard said.

“We don’t have a corrections policy that’s firmly in place,” Haugaard said. “And from what I can see from those stats from the past 40-plus years, we didn’t respond to the ever-increasing spike in incarceration rates.”

Wasko said, as she has in the past, that South Dakota stands out from many other states for harsh penalties. But she also said that as a member of the executive branch, her responsibility is to manage an offender population, not to influence its size.

“There’s a judicial branch, the legislative branch, and I’m the executive branch, and there’s reasons for that,” Wasko said. “I would not be responsible for anything on the front end of incarceration.”

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Wasko got backing on that point from Rep. Rep. Linda Duba, D-Sioux Falls, said the courts, prosecutors and lawmakers need to be proactive in criminal justice policy. She said the new facility is needed to make space for treatment and rehabilitation programs.

During another line of questioning, Karr asked about recent heavy rains and the possibility of flooding. He wanted to know if the proposed prison site is in a flood plain. 

Haugaard also keyed in on flooding potential, as did Kyah Broders, one of the Lincoln County residents suing the DOC over its site selection process.

The area did see several road closures during the heavy rains, she said Tuesday. 

“Adding sewage ponds and tons of concrete will only compound this issue in the future,” she said.

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Skipper said the site is not in a flood plain. She showed the committee a photo of the land shortly after the historic June rainfall that wreaked havoc on communities in southeast South Dakota.

“You can see from those photos that there was minimal water damage to the site, without any soil being moved or anything being done,” Skipper said. 

The site of a proposed new men's prison in Lincoln County, showing water after a major flood. (Courtesy South Dakota Department of Corrections)
The site of a proposed new men’s prison in Lincoln County, showing water after a major flood. (Courtesy South Dakota Department of Corrections)

In response to an email about the rainfall, DOC spokesman Michael Winder sent the photos shown to the lawmakers and wrote that the project’s civil engineer “will prepare the design for watershed from the property that would include any stormwater runoff.”

Bolin asked what might happen if Broders and her fellow prison site opponents succeed in forcing the state to apply for a county zoning permit and the county refuses to grant one.

“We do not have a valid or developed plan B if that ruling does not come through for us,” Wasko said.

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Bolin, who is not returning to Pierre for the next legislative session, closed out the prison site update portion of Tuesday’s meeting by returning to the influence harsh penalties have on prison populations.

Bills meant to get tough on crime and “lock them up and throw away the key” have appeared in nearly all of his 16 years in Pierre, Bolin said.

For future lawmakers, he said, “If you really believe that, you’ve also got to be prepared to pay the bill.”

 

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In rare bipartisan vote, U.S. Senate passes package aimed at protecting kids online • South Dakota Searchlight

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In rare bipartisan vote, U.S. Senate passes package aimed at protecting kids online • South Dakota Searchlight


This story mentions suicide. If you or a loved one are experiencing a mental health crisis or thoughts of suicide, please dial 988 or chat with a live counselor at 988lifeline.org.

WASHINGTON — Legislation aimed at protecting children online sailed through the U.S. Senate Tuesday, marking what could be the first update since the late 1990s for companies who interact with minors on the internet.

Senators approved the package of two bills in a 91-3 vote (including yes votes from South Dakota Republicans John Thune and Mike Rounds). It was a rare bipartisan landslide in the tightly divided body, despite loud and fervent opposition from civil liberties and LGBTQ organizations that say the measures would hand the government power to subjectively censor content.

The three no votes were cast by Mike Lee of Utah, Rand Paul of Kentucky and Ron Wyden of Oregon.

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If passed by the House, the legislative package would require producers of platforms popular among children and teens to follow new rules governing advertising, algorithms and collection of personal data.

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House Speaker Mike Johnson, R-La., has expressed interest in “working to find consensus in the House.”

President Joe Biden released a statement Tuesday calling the Senate vote a “crucial bipartisan step forward” and said the bill dovetails with measures he advocated for in his first State of the Union Address.

“There is undeniable evidence that social media and other online platforms contribute to our youth mental health crisis. Today our children are subjected to a wild west online and our current laws and regulations are insufficient to prevent this. It is past time to act,” Biden said, adding that tech companies need to be “accountable for the national experiment they are running on our children for profit.”

Families asked for federal help

The package contains two bills moving together: the Children and Teens Online Privacy Protection Act, which is mainly targeted at regulating the collection of personal data, and the Kids Online Safety Act, a bill that has been a lightning rod of criticism from outside groups.

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A bipartisan group of senators points to years of hearings and meetings with tragedy-struck families — including those whose children struggled with eating disorders and died by suicide — as the motivation behind the proposals.

Sen. Marsha Blackburn, of Tennessee, one of the Kids Online Safety Act’s original sponsors, said the legislation is a “safety by design bill, a duty of care bill that gives kids and parents a toolbox so that they can protect themselves.”

“A message that we’re sending to big tech: kids are not your product, kids are not your profit source, and we are going to protect them in the virtual space,” Blackburn, a Republican, said at a press conference following the vote.

‘Firehose’ of information confronts legislators studying internet use by children and AI

Blackburn co-led the bill dubbed the Kids Online Safety Act with Democratic Sen. Richard Blumenthal of Connecticut.

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Sen. Ed Markey, who championed the last protections passed by Congress in late 1990s, said “back in 1998 only birds tweeted, a gram was a measurement of weight, and so we need to update the law.”

The Massachusetts Democrat joined Republican Sen. Bill Cassidy of Louisiana in co-sponsoring the Children and Teens’ Online Privacy Protection Act.

Markey likened addictive social media products to those of the tobacco industry in previous decades, and cited public health warnings attributing increasing childhood mental health issues to the platforms.

“So we have to give the tools to parents and to teenagers and children to be able to protect themselves, and that would be my message to my colleagues in the House. We cannot avoid this historic moment,” Markey said at the press conference.

Senate Majority Leader Chuck Schumer praised the legislation’s passage in the Senate and said the parents of affected teens are “the reason we succeeded today.”

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“I’ve heard the terrible stories: children, teenagers, perfectly normal, then some algorithm captures them online by accident, and they end up committing suicide shortly thereafter,” the New York Democrat said in a statement. “You imagine being a parent and living with that.”

New rules for platforms

The original two bills, rolled into one legislative vehicle, respectively outline “duty of care” rules requiring platform creators to consider broad mental health categories when designing and operating their products as well as a prohibition of the use of personal data for targeted marketing.

The legislation would also mandate that platforms create an “easy-to-understand privacy dashboard” detailing how a minor’s personal information is collected, used and protected.

Other measures would include a prohibition on hidden algorithms, mechanisms for minors or parents to remove data, parental controls to restrict financial transactions and annual public reports from the platforms on “reasonably foreseeable” harms to children and teens and efforts underway to prevent them.

Enforcement

The new policies, if enacted, would be enforced by the Federal Trade Commission and any civil actions would be prosecuted by states in U.S. district court with advance notice to the FTC.

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The legislation defines the online platforms as public-facing websites, social media applications, video games, messaging applications or video streaming services that are “used, or reasonably likely to be used, by a minor.”

Snap, the company behind the popular platform Snapchat, issued a statement specifically praising the Senate’s passage of the Kids Online Safety Act.

“The safety and well-being of young people on Snapchat is a top priority,” a Snap spokesperson said in a statement provided to States Newsroom. “That’s why Snap has been a long-time supporter of the Kids Online Safety Act. We applaud Senators Blackburn, Blumenthal and the roughly 70 other co-sponsors of this critical legislation for their leadership and commitment to the privacy and safety of young people.”

Opponents see ‘dangerous’ measure

A coalition of organizations advocating for First Amendment rights, privacy and the interests of LGBTQ minors urged the House to vote no on the legislation, criticizing it as “blatantly unconstitutional.”

Evan Greer, director of the tech policy group Fight For the Future, also lambasted the bill as “dangerous and misguided” and “wildly broad.”

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The coalition largely takes issue with the Kids Online Safety Act’s “duty of care” provision that requires companies to “prevent and mitigate” harms associated with anxiety, depression, eating disorders, substance use disorders and suicidal behaviors.

During a joint virtual press conference hosted by the groups during the Senate vote, Greer described the provision as “a blank check for censorship of any piece of content that an administration could claim is harmful to kids.”

“What that means in practice, is that for example, a Trump administration FTC would get to dictate what types of content platforms can recommend or even show to younger users,” Greer said, referring to Republican presidential nominee and former President Donald Trump.

Jenna Leventoff, senior policy counsel at the American Civil Liberties Union, said the Kids Online Safety Act is “nothing more than a thinly veiled effort to censor information that some consider objectionable”

“If enacted, KOSA could lead to information about health care, gender, identity, politics and more being removed from social media. And kids note that censorship will make them less and not more safe,” Leventoff said. “As one student recently told me, they don’t get sex education in school, and if information about sex is removed from the internet because platforms fear liability for hosting it, how else can they learn about sex?”

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Teens in opposition

The ACLU brought roughly 300 teens to Capitol Hill Thursday to lobby against the legislation.

Dara Adkinson, of the organization TransOhio, said the legislation is “truly terrifying.”

Adkinson questioned whether state and federal authorities could argue that content about climate change or the nation’s history of slavery causes anxiety and should therefore be regulated.

Regarding content about transgender youth, Adkinson said: “We know there (are) people out there that would like us to not exist and having the lack of visibility of the kinds of resources found on the internet is the first step for many of these folks.”

Greer said the coalition is concerned about the role of “big tech” in society. Advocates would support a “heavily modified” version of the Kids Online Safety Act that focuses on regulating business practices, including targeted advertising or videos that automatically play and encourage continuous, addictive scrolling habits.

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Greer said their organization is neutral on the legislation targeted at protecting children’s privacy, but that they would like to see comprehensive legislation that protects minors and adults alike.

“Censorship and privacy do not go together, and these should not be moving together,” Greer said.



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South Dakota Supreme Court reverses lower court bail bond decision

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South Dakota Supreme Court reverses lower court bail bond decision


The South Dakota Supreme Court has reverse a lower court decision and ordered a jail bond be set aside.

Dakota Bail Bonds posted jail bonds for two defendants under one condition: they both appear in court.

The defendants made their court date, but violated other conditions of their release, so the state ordered forfeiture of the bonds. That means the bond money must be given to the court.

Dakota Bail Bonds claimed the defendants appeared in court, therefore their bonds should not be forfeited.

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A lower court sided with the state saying the language of the bond didn’t apply to only court appearances.

The state Supreme Court reversed that decision, saying a bail bond is “widely understood only to ensure appearances.” The court also said that Dakota Bail Bonds’ agreement with the state solely ensured defendants would appear in court. Because the defendants did, the forfeiture should have been set aside.





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