For perspective, read this year's budget:
- $150M is 13% of the current fiscal year general fund.
- You could shut down the state's ag and natural resources programs, the Legislature, all state elected offices, the Unified Judicial System, and the entire state bureaucracy... and you'd still have to find another $20M of cuts to balance the budget.
So suppose South Dakota taxed pop and other sugar-sweetened beverages at one cent per ounce, not quite a quarter on your 24-ounce root beer. The Yalies say that tax would bring $19.7 million into South Dakota's coffers each year. Add fruit drinks, Gatorade, and other sugared drinks, and you get $37.9 million. Get all fizzy and count your diet beverages, and you can avoid over $61 million of program cuts.
$61 million dollars. From one tax. A consumption tax, of which many of my conservative friends are enamored. A tax on an utterly non-essential item.
Now I'd rather see a tax increase on alcohol, which has much more harmful effects than pop or even that other recreational substance Mr. Newland just got out of the pokey for. And what do you know: there's an online calculator for hooch tax, too! Cool!
The nice folks at the Marin Institute note that we haven't changed our beer excise tax since 1988, which means its value has fallen 45% due to inflation. If we tacked just one penny per ounce onto beer, wine, and liquor, we could plug another $29 million of our budget deficit hole.
And hey, given that the Legislature's hooch committee just voted to consider allowing liquor sales on Christmas Day, there's another boost to tax revenues. (Our man Senator Russell Olson voted with the slim majority, 6–5, to let the measure proceed. Russ, I am so eager to hear how you will vote in the full Senate on... Christmas spirits.)
Raising taxes is not my goal. Preventing a financial train wreck in Pierre is. If anyone has a plan for doing that without raising taxes, fire away. But understand, we face some serious choices come January. A new tax on pop and an increased tax on alcohol are two serious proposals we need to consider.