PIERRE, S.D. (SDBA) — The Joint Committee on Appropriations voted 13-4 today (Tuesday) to advance Senate Bill 16.
It would set aside contractors’ excise tax from Ellsworth Air Force Base construction projects for future base support.
The committee amended the bill to cap the appropriation at $100 to keep discussions alive through the budget process on Tuesday’s crossover day.
Supporters of the bill say Texas heavily supports Dyess Air Force Base, the other location where the new B-21 bombers will be stationed. Ellsworth is the other based slated for the next-generation bomber.
“The state of Texas has made at a minimum a contribution of $15 million annually to the Texas Military Preparedness Commission,” Ellsworth Development Authority Executive Director Scott Landguth told legislators.
Landguth noted Ellsworth generates substantial revenue for the state.
“The base had a total economic impact of over $880 million in 2023 alone. That is before construction started to ramp up,” he said.
Senator Taffy Howard, R-Rapid City, defended the bill against the opposition of the Bureau of Finance and Management.
“For those who make the argument that we’re going to be losing too much money if we do this… In the last 14 years, the state received an estimated total of $5.5 million in contractors’ excise tax. That’s averaging less than $400,000 a year.” Howard added, “Since the B-21 construction started in fiscal year 22, the state has already realized $9.3 million in contractors’ excise tax revenue.”
Retired Lieutenant General Jim Kowalski emphasized that quality of life measures are increasingly important in military basing decisions.
“That whole quality of life piece, which, frankly, in the past was largely ignored, is no longer ignored, he said.”
The committee also advanced SB 6, initially seeking $15 million for infrastructure projects related to Ellsworth’s expansion, but the committee amended it to $100.
Senator Glen Vilhauer, R-Watertown, questioned, “What were to happen, I can’t imagine what the circumstance would be, let’s say at some point down the road, all of a sudden, SDEDA (South Dakota Ellsworth Development Authority) disappears for whatever reason. What happens to whatever assets are in that fund at that point?”
BFM representative Derek Johnson opposed SB 16 because of the potential loss of state tax dollars.
“It would be a significant loss to future ongoing general funds.” He added, “Senate Bill 16 creates a new fund for the support of Ellsworth Air Force Base. All future contractors excise tax collected from projects on the base would go to the newly created fund rather than the general fund.”
Senator Howard responded, “There are several other instances of carve outs in our state. We have the mineral severance tax that goes to specific entities more so than other entities. We have the gambling tax revenue.”
The amendments to both bills ensure they remain alive for budget negotiations while legislators finalize the state’s fiscal priorities.
