Feeling Under-Taxed? One S.D. Legislator’s Answer

March 20, 2011; Source: Rapid City Journal | In South Dakota Republican legislator Hall Wick says that a constituent complained to him about being under-taxed. So Wick submitted a bill, now signed into law, which would set up an endowment into which people can donate money for state projects.

Wick says that those contributing to the fund, which would be managed by the South Dakota Community Foundation, will be able to designate the money for specific purposes. But critics say the language in the bill does not protect donor intentions, and that it leaves the spending of the interest produced by the endowment to the legislature.

Even Bob Sutton, president of the community foundation, says that it would be difficult to ensure that small amounts of money given to the fund for a particular purpose would be spent for that purpose.

The governor's budget director, Jason Dilges, is one of those disturbed by the lack of details in the bill. He says that the bill provides that once the interest is handed to the legislature, “the Legislature can spend it. That's all the bill really says."

Indeed, some of Wick’s expectations for the fund seem slightly unrealistic. For instance Wick says that the fund should not replace state funding but be used to increase it. The probability of that, we think, may be slim to none. But the comment that most worries us for oh, so many reasons is the following from the Community Foundation’s Sutton: "I'll be anxious to see how South Dakotans react to using philanthropic dollars to support state government."

We’d love your reaction to this situation. —Ruth McCambridge