South Dakota on the search for road money

| 8/20/2008

In hopes of closing a road funding gap in South Dakota, lawmakers there are giving thought to applying a tax to drivers based on how many miles they travel in the state. Stopping the diversion of road funds to other budgets also is drawing attention.

The state’s tax that is applied to fuel purchases generated $121 million during the fiscal year, which ended in July. While it amounted to a 4 percent increase, a legislative panel studying highway funding said it doesn’t come close to meeting the state’s needs for roads.

State Rep. Shantel Krebs, R-Sioux Falls, said the practice of charging for miles traveled may work in South Dakota. The revenue source was tested in Oregon, and other states also are taking a look at the results, she told The Associated Press.

Krebs said the practice of taxing drivers for each mile traveled would ensure that those who rack up the most miles pay more for wear and tear.

Advocates for the practice say that special devices could be installed in vehicles to gauge how many miles people drive. They say that something must be done to help pay for road work in the state because of the combination of fewer federal dollars available for states and escalating costs for road building materials.

About 75 percent of the state’s funding for roads comes from the federal government, but the future of those funds is in doubt. The federal highway fund is facing a deficit that could result in the state losing at least $70 million, if nothing changes.

The cost of construction materials, including asphalt, also continues to rise.

The panel is scheduled to meet in late September to review several options to generate revenue for road and bridge work. Any tax change that could emerge from the meeting would require a two-thirds vote in each chamber of the statehouse. The other option is to let voters decide the issue.

To view other legislative activities of interest for South Dakota in 2008, click here.

– By Keith Goble, state legislative editor