Council votes to formally oppose IM-28

By Carleen Wild
Moody County Enterprise

The Flandreau City Council has formally joined the growing opposition to Initiated Measure 28 (IM-28), which will be decided by South Dakota voters on November 5th.
The measure seeks to prohibit taxes on items sold for human consumption, except for alcohol and prepared food. Prepared food is defined as anything sold heated or with utensils. While IM-28 wouldnt reportedly stop local governments from levying their own taxes, there are increasing concerns about the impact it would have on existing revenue streams.
South Dakota currently has a 4.2% sales tax, which includes groceries. Cities can add up to 2% more. South Dakota and Mississippi are the only states that fully tax groceries, while 11 others apply a reduced rate. Most states 32 of the 45 with a sales tax exempt groceries entirely.
Supporters of IM-28 argue that the measure would alleviate rising food costs for vulnerable families. Opponents, including a growing number of city councils and school districts, believe it would strip communities of essential funding for infrastructure, maintenance, and other services. There is also concern that it would lead to the creation of a state income tax to replace the lost revenus, which most states with no sales tax have.
The South Dakota Municipal League estimates cities and towns could lose at least $51.5 million annually if IM-28 passes. Larger cities are projected to see an approximate 8% revenue decline, smaller towns, the Municipal League projects, could face losses of over 40%.
In Moody County, no community is expected to see such significant losses. The projected impact instead is an 11.5% reduction in revenue in Flandreau, 6% in Colman, 26% in Egan, 2.8% in Trent, and 1.4% in Ward.
The measures vague wording and the uncertainties over what can and cant possibly be taxed along with the chance any of it will end up in court if voters approve the measure, had Flandreau city officials this past week unanimously vote to formally oppose the measure.
The Attorney General recently issued an explanation of its interpretation of the measure and noted that judicial or legislative clarification will likely be needed should it pass.
Normally, Im not eager to get involved in politics at the city level, but this bill is really poorly written, said Flandreau Mayor Dan Sutton during the councils recent meeting. We dont fully understand the fiscal impact because of how its written.
Councilman Brad Bjerke agreed, stating, Repealing a tax might sound good, but this measures broad impact would significantly affect our budget, especially in small cities.
The City of Colman also recently took up the conversation. No formal support or opposition has been given in that community.
IM-28 will be on the ballot in the general election on November 5, 2024.
Also heard at the most recent meeting of the Flandreau City Council:
The official approval to hire Tom Bacon as the new Electric Superintendent.
An overview of revisions to the citys zoning ordinance. Todd Kays, with First District Association, told council members that the updated ordinance is a management tool to help guide the community. More information on the proposed changes will be shared at an upcoming public hearing.
A follow-up conversation to budget talks, including ongoing support for Rivers Bend Golf Course and other community partnership requests. Additional information can be found on p. ?? in City Council Meeting Notes.
And the approval of a Final Plat of Lot 1A of the Booster Club Addition to the City of Flandreau, which will be the future home of a new Early Childhood Learning Center. More on this in next weeks issue.