Legislative Week 4

The week was busy with deadline of bill drafting. Currently there are over 800 draft requests for bills, resolutions, and commemorations.

I’ve spent the better part of this session reviewing “Sales and Use Tax Exemptions” and “Annual Est. General Fund Revenue Loss” under statute. My main focus this week has been under the healthcare group exemptions.

Sanford Health is the largest, not-for-profit rural health system in the nation as confirmed by the Health Care Advisory Board, based on gross revenues, patient beds, and number of full time employees serving a significant patient volume outside of major metropolitan areas. Estimates for general fund revenue loss under all “Healthcare Group” is $139,539,330. This estimate hasn’t been recalculate since 2013 and under this category the estimates according to the growth could actually far exceed the calculation.

I believe the $139.5M is too low. Dept. of Revenue estimated the $139.5M as follows, “In order to reach the estimate, they looked at a report by the Bureau of Labor Statistics which showed that an average of $3631 was spent per person on healthcare in 2013 (based on national average).  South Dakota’s population was about 854,000 at that time.  Taking the average expenditure times the population time the sales tax rate gave us the estimated $139.5 million.”

However, I believe using an outdated 2013 number produces an estimate far below actual. The new estimate can be based on US Bureau of Economic Analysis (BEA) data on healthcare costs for the state of South Dakota. In 2016, the US BEA figured $7B was spent in South Dakota on health care, taking that number times the sales tax rate produces a sales and use tax exemption of $280.3M

Some economic statistics for South Dakota from November 2016 through October 2017 (excluding agriculture) outlook had education and health services growing by 1.40%. It wasn’t the largest with government at 1.95% but it does show the growth of the industry.

It’s important to note “Healthcare Exemptions” are only one of many sales and use tax exemptions under South Dakota law. Another on that stuck out to me was, “Motion picture rentals to a commercially operated theater primarily engaged in the exhibition of motion pictures.” The estimated exemption is  $622,034 almost exactly what is needed to fund the Veterans Cemetery in eastern South Dakota. The grand total for all exemptions under South Dakota law,  $1,113,065,623.

As always, you can contact me at the House Chamber number 773-3851. Leave a phone number and I’ll call you back. The fax number is 773-6806. If you send a fax, address it to Rep. Elizabeth May. You can also email me at Elizabeth.May@sdlegislature.gov during session. You can keep track of bills and committee meetings at this link: http://legis.state.sd.us/ You can also use this link to find the legislators, see what committees they are on, read all the bills and track the status of each bill, listen to committee hearings, and contact legislators.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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