In South Dakota, the debate surrounding Initiated Measure 28 (IM-28), which proposes the repeal of the state grocery tax, is intensifying as the November election approaches. Rick Weiland, a prominent advocate from Dakotans for Health, addressed the Watertown City Council on September 4, 2024, urging support for the measure. Weiland highlighted that approximately 106,000 residents in South Dakota face food insecurity, arguing that eliminating the grocery tax could alleviate some of this burden. However, the Watertown City Council voted to oppose IM-28, citing concerns about potential revenue loss for the city. City Manager Amanda Mack warned that the repeal could lead to a 10.4% reduction in city sales tax revenue, jeopardizing around $9 million in state grants received between 2019 and 2024. The Legislative Research Council (LRC) estimates that removing the grocery tax could result in a revenue reduction of $123.9 million for the state. This has raised alarms among local officials, who fear the implications for essential services and funding. The outcome of IM-28 will significantly impact the state's budget and the financial well-being of its residents. [abf138e7][1e0b3ee6]
In a broader context, the LRC's updated fiscal impact estimate for IM-28 indicates that the measure could negatively affect South Dakota’s state budget by up to $646.2 million for the 2025 Fiscal Year, representing 46.5% of the state’s sales tax revenue and 100% of tobacco tax revenues. A coalition has formed to oppose IM-28 due to potential funding cuts to education, healthcare, and state services, as well as significant reductions in funding for Tribal governments. The implications of IM-28 extend beyond the grocery tax, potentially affecting services such as roads, first responders, libraries, pools, and parks. [940fee1f][2274d045]
As the election nears, discussions around IM-28 continue to evolve, with advocates and opponents presenting their cases to the public. The decision made by voters will have lasting effects on the state's fiscal landscape and the lives of its residents. [24a12eba]