S.D. Revenue Hikes in 2015 Bring in More Funding for Roads, Bridges

South Dakota has raised at least $20 million more for road and bridge funding since a package of tax and fee hikes went into effect earlier this year.

📅   Wed October 21, 2015 - Midwest Edition
James Nord - ASSOCIATED PRESS


The additional funding will allow officials to complete more construction projects that need to be finished without having to defer them into future years.
The additional funding will allow officials to complete more construction projects that need to be finished without having to defer them into future years.

PIERRE, S.D. (AP) South Dakota has raised at least $20 million more for road and bridge funding since a package of tax and fee hikes went into effect earlier this year, and Gov. Dennis Daugaard’s office said Sept. 22 he is confident the measure will meet initial fiscal expectations.

Revenues were up at least $20 million from April through August over the same period last year, according to rough figures from the Department of Revenue. Projections pegged the infrastructure package at bringing in about $85 million in its first year through fuel taxes, fees and other assessments. Most of the measure went into effect April 1, including a 6-cent hike in gas taxes.

“The Governor believes this is on track with what we hoped and is pleased that we will be maintaining and improving our highways and bridges,’’ spokeswoman Kelsey Prichard said in a statement.

During a legislative oversight panel meeting Sept. 22, Department of Revenue Secretary Andy Gerlach said the agency would provide lawmakers with more information in the future about the infrastructure package revenue.

“It’s too hard to know, but I think we’re definitely seeing an increase, and I think we’ll see more of a positive increase as we go forward,’’ Gerlach said in an interview. “I don’t know if we’ll get to the $85 [million], but we’ll get more money in the highway fund, I guarantee you that.’’

Department of Transportation Secretary Darin Bergquist told lawmakers on the Government Operations and Audit Committee that the extra funding has come in too late to impact this year’s construction season.

The additional funding will allow officials to complete more construction projects that need to be finished without having to defer them into future years, Bergquist said. Bidding for work for next year’s construction season is set to begin this fall.

“Because of the timing, you didn’t see a lot of new, additional construction barrels out there this summer, and you will next year,’’ he said.

Lawmakers in the 2015 session passed the plan to pay for infrastructure spending. The measure increased state’s fuel taxes on gas and diesel from 22 cents to 28 cents, for example. The package also increased the state’s motor vehicle excise tax from 3 percent to 4 percent and hiked license plate fees by 20 percent, among other provisions.

So far, the excise tax has generated nearly $8 million more than over the same period last year. The gas taxes have raised nearly $12 million in additional money.

“It does not appear that the tax increase is having a negative effect on people’s gas purchases or how they’re driving,’’ Gerlach said.