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Page 67

South Dakota

William Janklow, Republican

Legislature: Republican

Took Office: 1/95

Grade: A

Janklow, a lawyer by trade, served two previous terms

from 1979 to 1987.  In 1994 he again won election to the

statehouse with a platform that included a 30 percent prop-

erty tax cut.  In his first year back in office, Janklow de-

livered a 20 percent property tax cut.  The $80 million re-

duction was the largest tax cut in state history.  However,

that cut was partially offset by a 10-cent per pack ciga-

rette tax hike and several other minor tax and fee in-

creases.  In 1998 Janklow proposed, and the legislature ap-

proved, an additional 5 percent property tax reduction.  He

has also downsized the executive branch staff by over 1,000

employees, a 13 percent reduction.  And over the last two

years general fund spending per $1,000 of personal income

has actually declined by 4 percent.  Other than the minor

first-year tax hikes, the only notable blemish on Janklow's

sterling fiscal record is the temporary 3-cent per gallon

gasoline tax hike he approved in 1997.  That increase,

scheduled to expire on October 1, 1998, was approved only

after the state was wracked by devastating floods and a

fierce blizzard that required a special legislative session

to find funds for the unexpected costs of snow removal and

road repair.  The Small Business Survival Committee ranks

South Dakota the most business-friendly state in the nation,

in part because it is one of only two states with no corpo-

rate income tax, no personal income tax, no personal prop-

erty tax, and no business inventory tax.  In November 1996

voters approved a referendum requiring a 2/3 supermajority

for all tax hikes, so the state's low-tax status seems se-

cure.  This pro-business, low-tax environment has served

South Dakota well.  South Dakota has led the nation in per

capita income growth in recent years.  During his second

stint as governor, Janklow has brought South Dakotans both

tax relief and tightfisted spending restraint.  That impres-

sive fiscal record puts him at the top of the class.

Score

Grade

Rank

Overall Fiscal Policy Score

75

A

1

Spending Score

80

B

3

Revenue and Tax Rate Score

73

A

1

Amount

-2.4%

Average Annual Change in Real Per Capita Direct General Spending through 1996

-1.9%

Average Annual Change in Direct General Spending Per $1,000 Personal Income through 1996

-1.5%

Average Annual Recommended Change in Real Per Capita General Fund Spending through 1999

-4.1%

Average Annual Change in General Fund Spending Per $1,000 Personal Income 1996-98

-3.4%

Average Annual Change in Real Per Capita Tax Revenue through 1997

-6.3%

Average Annual Change in Tax Revenue Per $1,000 Personal Income through 1997

-3.4%

Average Annual Recommended Change in General Fund Revenue Per $1,000 Personal Income through 1999

-0.5%

Average Annual Change in Real Per Capita General Fund Revenue 1996-98

-1.5%

Average Annual Recommended Tax Changes as % of Prior Year's Spending through 1999

0.0

Change in Top Personal Income Tax Rate, proposed and/or enacted (% points)

0.0

Change in Top Corporate Income Tax Rate, proposed and/or enacted (% points)

0.0

1998 Combined Top Income Tax Rates (Personal plus Corporate) (*0.5)

0.0

Change in Sales Tax Rate, proposed and/or enacted (% points)

3.0

Change in Gas Tax Rate, proposed and/or enacted (cents per gallon) (*0.5)