WATERTOWN, S.D.(KXLG)- At Monday night’s meeting during the open public forum, Rick Weiland, representing Dakotans for Health, presented arguments in favor of IM 28, a measure to repeal the state-level grocery tax. At the September 4, 2024, meeting, the Watertown City Council voted on approving a resolution to oppose the passing of Initiated Measure 28 (IM28). According to city official projections, the measure, if passed, could significantly impact the city’s revenue from sales tax collections.
Weiland emphasized the tax’s impact on food insecurity in South Dakota, noting that 106,000 residents, including one in six children, are food insecure.
Weiland criticized the South Dakotans Against the State Income Tax opposition campaign for using scare tactics and hypotheticals.
Weiland pointed out that the measure went through the Legislative Research Council (LRC) and included language allowing municipalities to continue taxing food. The LRC’s fiscal note estimated a revenue reduction of $123.9 million if the state tax on food is removed.
City Manager Amanda Mack addressed the Council, highlighting the ambiguity and potential consequences of IM 28. She cited the Attorney General’s explanation, which noted that the measure prohibits the state from collecting sales tax on items for human consumption but does not define “human consumption.”
Mack expressed concerns about the measure’s impact on municipal revenue and state grants. She noted that Watertown received nearly $9 million in state grants from 2019 to 2024, which could be jeopardized if the measure passes. Mack emphasized the need for judicial or legislative clarification and urged caution, given the potential 10.4% reduction in city sales tax revenue.
Ultimately, voters will decide whether to repeal the grocery tax in the upcoming election. While proponents argue that the measure would provide much-needed relief to struggling families, opponents warn of the potential negative consequences for the city’s finances.
As previously reported on October 1st, the Watertown Area Chamber of Commerce is hosting a voter education forum at the Watertown Event Center. SD Attorney General Marty Jackely will attend and explain these ballot questions.