One step forward and two steps back?

One step forward and two steps back? by the Plain Talk Vermillion city officials would like to see South Dakota change a state law so that a lodging tax already in existence can be used to hire staff for attracting visitors.

The law currently allows a city to collect a lodging tax not exceeding $2 per occupied room per night, but the money must be used for facilities.

Vermillion officials want the law broadened to cover marketing of the city to conventions, tourists and other visitors.

�Our goal is to change the law, permitting us to direct those dollars toward the personnel and marketing side. We want to create our community as a destination,� Mayor Roger Kozak said.

The change would definitely be a step forward for Vermillion. The community relies on the staff at the Vermillion Chamber and Development Company (VCDC) office to coordinate activities and inquiries from visitors.

Their resources are limited, however, and as we�re about to celebrate the 200th anniversary of the Lewis & Clark Corps of Discovery, we can imagine the VCDC�s staff quickly being stretched mighty thin without some help.

That�s why Vermillion sorely needs a Convention and Visitors Bureau, staffed by a full-time person who focuses primarily on hospitality issues.

Spirit Mound, located just a few miles north of Vermillion, is one of but a few sites recorded in the explorers� journals that hasn�t been dramatically changed by man or nature. In fact, work has been underway to restore the mound to the condition it was in when Lewis and Clark climbed it 200 years ago, and it�s sure to be a destination of Corps of Discovery buffs.

�This would benefit the whole community,� City Manager Jim Patrick said of the proposed tax change. �It would stimulate our sales tax, fill up the restaurants and help retail store owners through increased sales.�

Recent changes that include more motel rooms makes Vermillion more attractive for small to mid-size conventions and groups. Vermillion already welcomes thousands of visitors for events at The University of South Dakota and around the community, and its proximity to Iowa and Nebraska make it a logical host for tri-state meetings.

Here�s the rub, though.

State Democrats are pushing a repeal on the state sales tax on food. The party is spearheading a petition drive to put the repeal question to a public vote in November 2004.

District 17 Rep. B.J. Nesselhuf of Vermillion has noted that lifting the sales tax on food is an important moral issue.

If he and other Democrats are successful, which is very likely in this state of conservative-minded people, they will have an impact on municipalities across the state.

Vermillion officials estimate the city would lose $240,000 annually if the state sales tax is removed from food.

Losing approximately $1 million in the course of about four years is backsliding in our book.

We know there�s talk of eventually enacting an Internet sales tax in South Dakota, but no one really knows if or when that will happen.

Some legislators, like Nesselhuf, point to a state reserve fund as a remedy to make up for revenue lost if the sales tax on food is lifted. It would be foolhardy, however, to spend down that fund while trying to make economic progress. We�re a state whose future is reliant largely on nature�s whim. When it�s hot and dry in the summer, farmers and ranchers and the economy suffer.

Should we get another severe winter like we experienced seven years ago, we�d be faced with the rather costly task of trying to keep highways open until spring, when we would have to switch to flood-control and road and bridge repair mode.

Gov. Mike Rounds has said lifting the tax entirely from food would cost $42 million in state revenue, $18 million in city income and $1 million in tribal revenue.

As a counter to those who want to repeal the tax, Rounds has proposed using food stamp program guidelines to create a state exemption to help lower-income people. He suggested during his budget speech this month that the immediate goal be to exempt from the tax all food purchases made by anyone whose income is 130 percent of the poverty level or less. That�s about $23,100 a year for a household with one parent and three children.

This, we believe, makes much more sense than a total repeal of the food tax.

The Vermillion Plain Talk editorials reflect the opinion of Plain Talk editor David Lias. You may contact him at david.lias@plaintalk.net

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