“I can almost taste it now
And it’s sweet as wine
I ain’t gonna waste it now
Now it’s finally mine”
“Hungry” - Paul Revere & The Raiders

With one of the best bass lines in the history of popular music, “Hungry” was ahead of its time when it was released in 1966.

While there are elements of early 1960s-influenced drum and lead guitar that may remind many of the Beatles, the bass lead, synchronization, and vocal lead on this tune was a huge push forward to what became modern “hard” rock.

The song reached No. 6 on the Billboard Hot 100, but the new sound made it difficult to truly capture the listening ears of the general public.

The lyrics for the tune paint the picture of the writer talking to his girlfriend about wanting to have the finer things in life, things he would share with her.

A quality classic rock tune may not be a typical bridge to modern political discourse, but one of the six ballot measures that voters will address this coming November is Initiated Measure 28 (or IM 28), which was certified by the Secretary of State for the ballot on May 13, a measure to eliminate sales tax on consumable items in the state, in other words, the food tax.

On her run for the Governor’s office in 2022, Kristi Noem strongly used one promise to endear her to those who were less than pleased with her first term in office — eliminating the food tax.

She promised to repeal the tax, though she was unable to accomplish such in the ensuing legislative session, The legislature instead chose to drop the overall sales tax rate in the state from 4.5% to 4.2%.

To get some background on the topic within the state, South Dakota now has a 4.2% sales and use tax after the 2023 legislative session reduced the rate, with the House voting unanimously for the measure and the Senate voting 31-2. That measure was approved for four years, with the opportunity to renew or adjust the reduction at the end of that time.

While 45 states collect a statewide sales tax, only 13 apply part of that tax to groceries, and only South Dakota and Mississippi apply the full state sales tax to grocery purchases.

This has brought the state under the microscope, especially by those who argue that the taxation of groceries is more heavily felt by those who struggle financially to afford groceries, not those who can afford grocery taxation without a significant impact on household finances.

After statewide taxes, municipal taxes can also be added on to sales tax, which means that typically, food is taxed at six percent or more in each community within the state.

To get an idea of how removing food from the sales tax could impact the state, Paul TenHaken, the mayor of Sioux Falls, recently talked with KeloLand News.

He noted that removing the food tax from the city of Sioux Falls alone would see $15-20 million less revenue every single year to the city. The municipal loss of accumulative tax revenue could be in the range of $100-150 million for communities across the state on an ongoing, annual basis.

When Noem was running on the promise of eliminating the food tax, the impact on the statewide budget was estimated at $102.4 million in lost revenue. That was before all taxes were reduced in the 2023 session by 0.3%, meaning that removing all food taxes while still in the four-year window of reduction could significantly impact the state’s budget, with some estimations of $150-200 million in lost revenue per year for the state government to fund the actions of the state.

Of course, who doesn’t like the idea of less taxes, right?

The real issue comes when you start to dig into the details on the proposed measure.

Having worked in the field of social services when some major changes were made to what supplemental food benefits, widely known as SNAP or EBT or food stamps, would cover, I remember that for the long majority that those benefits existed, they did not cover deli or warmed food or a lot of things like energy drinks.

The argument then was that those who are receiving benefits deserve to be able to make food decisions without someone looking over their shoulder to determine what was legit food and what was not, and many foods were added into the SNAP program.

However, there does need to be some boundary put in place. Right now, the current proposed legislation is going to face potential picking through in the legislature if it’s passed. The way that the measure is written now, many things could no longer be taxed based on the broad definitions that IM 28 puts forth.

The legislature will likely need to more clearly define exactly what is taxed within the sales and use tax statewide. Some reviewers of IM 28 have seen that tobacco and things like toothpaste could potentially all have a legal argument NOT to be taxed.

Finally, one thing always important to consider when discussing elimination of one tax is what will replace that revenue for the state or what will be cut?

Currently, South Dakota is one of the few states in the country with no state income tax. That very well may need to change in order to fund a reduction or elimination of the tax on groceries. That would simply put burden back on those who are already tight in their finances at the bottom rung of family earnings, except at least as far as food goes, there is a way around that by utilizing SNAP. You cannot work without paying state income taxes, so it’d hit those with the least ability to afford a tax hike the hardest there as well.

Cuts to afford the tax break, if no additional tax revenue was generated, could lead to South Dakota making deeper cuts to state services and to funding of things like public education and infrastructure upkeep and repair.

Already, the state ranks among the lowest in expenditures in many social service areas on a per capita basis as well as among the lowest in education expenditures at the state level. It would be scary to consider the impact of further setting the state back in those areas.

Finding some level of tax relief on groceries is a legitimate and needed pursuit within the state, but with the 2023 legislation still in place, it would be advantageous to encourage our legislators in Pierre to propose that when the current reduction in sales tax reaches its expiration, returning the full sales and use tax to 4.5% (or even raising it a tick more as South Dakota has one of the lowest state sales tax rages among the 45 states that have some amount of state sales and use tax) and adjusting the amount of taxation on consumable items down to 3% or 4% to give some level of relief would be much more manageable at the state level.

Frankly, there are a lot of questions that both sides on the issue have yet to answer, but from this writer’s evaluation, this is simply not the right time for IM 28.