Manager Message
February 2012 Co-op Connections

Last month we introduced you to a legislative proposal that would change how electric co-op consumers are taxed.  The current tax structure involves a different taxation method for different types of electric utilities.  Sioux Valley Energy pays a gross receipts tax to local school districts in lieu of property tax.  Investor owned utilities pay a centrally assessed property tax to the state.

 While that taxation method stayed relatively fair for many decades, we have seen a growing inequity over the past 10 years. The annual rate of increase on electric co-op taxes has averaged about 10 percent over the last decade. This means those taxes have more than doubled in the last 10 years, amounting to $10.5-million in taxes that were paid by Sioux Valley Energy members.

The green line on the below chart is the average amount that taxes have increased for South Dakota electric cooperatives over the past decade.  The red line shows the projected rate of increase if there are no changes made.  If we continue down the same path we have been traveling, in terms of tax obligations, South Dakota electric cooperative customers will pay a much higher annual increase than electric utility customers who get their power from an investor-owned or municipal utility. 

We have introduced legislation during this year's South Dakota legislative session that make taxes more equitable.  The proposal would slow the rate of growth in tax payments to an increase that is more sustainable (shown as the blue line). As you can see by the chart, forecasts show schools would continue to receive healthy annual increases in tax revenue.

Now is the time for you to get involved...to let your voice be heard.  Ask your local legislators to help provide some level of fairness, equity and sustainability, while maintaining our support for local schools. 

The legislation (Senate Bill 123) has passed through the SD State Senate and so we are asking for you to contact your House representative. Take the time to give them a call or send an e-mail.  Contact information is below.

Additionally we encourage you to become involved in our grassroots advocate program.  We provide legislative updates and occasional calls to action. To be included on our list, email our Director of Communications and Government Relations, Carrie Law at Carrie.Law@siouxvalleyenergy.com or give her a call at 1-800-234-1960. 

Please consider getting involved because YOU are needed.