PIERRE, S.D. (SDBA) — The South Dakota Senate today (Monday) approved a bill to transfer $15 million to support infrastructure projects tied to Ellsworth Air Force Base’s expansion.
However, they rejected a companion measure that would have redirected contractors’ excise tax collections from the base.
Senate Bill 6, which transfers funds from the South Dakota Housing Infrastructure Authority to the newly created Ellsworth Support and Development Fund, passed 29-6 after adopting an amendment proposed by Sen. Helene Duhamel, R-Rapid City.
“Hosting a federal military base is an honor for our state. It’s a national asset with huge economic impact,” Duhamel said. “Ellsworth is the second-largest employer in South Dakota.”
Sen. Arch Beal, R-Sioux Falls, expressed concerns about the fund transfer, noting the money “should go back to the municipalities as grants rather than some other municipality.”
A related measure, Senate Bill 16, failed to achieve the required two-thirds majority, with 14 senators voting in favor and 21 against. The bill would have directed up to $1 million annually in contractor’s excise tax collected from Ellsworth projects to support the base through 2030.
Sen. Taffy Howard, R-Rapid City, the bill’s sponsor, emphasized the limited scope of the proposal.
“With this amendment on, we are talking one million per year for five years,” Howard said. “This past year, the state realized nine million from the contractors’ excise tax revenue from on-base projects.”
Opponents cited concerns about tax policy and precedent setting.
“The contractor’s excise tax is the third-largest tax coming into the state of South Dakota,” Sen. Larry Zikmund, R-Sioux Falls, said. “We’re getting about 200 million dollars coming into the state.”
Sen. Ernie Otten, R-Tea, argued against creating special tax designations. “It’s nothing more than taxing individuals double and then sending that funds to somebody else,” he said.
Ellsworth Air Force Base is expanding significantly to accommodate the B-21 bomber program, with construction projects estimated at $2 billion.
