(Millions of $)

Source

FY2005

FY2006

Change

Sales and Use Tax

536.3

567.8

31.5

Video Lottery/Telecom Tax

114.6

117.7

3.1

Contractor's Excise Tax

62.9

66.8

3.9

Insurance Company Tax

53.7

57.2

3.5

Bank Franchise Tax

36.8

37.8

1

Other Continuing Receipts

150.9

152.5

1.6

Total Continuing Receipts

955.2

999.8

44.6

One-Time Receipts

8.8

0

-8.8

Total Receipts

964

999.8

35.8

Transfer from Reserves

22.5

17.1

-5.4

Total General Fund Revenues

986.5

1016.9

30.4

source: Governor Mike Rounds, FY2006 Budget Address,

December 7, 2004, Pierre, SD.

http://www.state.sd.us/Online Docs/BudgetSp2006.pdf

downloaded 2005.01.09 18:56 PST

Now consider:

2001 Gross State Product (millions):

24251

Suppose 3% annual growth since 2001.

2006 GSP (millions, projected):

28114

Now, let's replace some taxes:

Source

FY2006

Change

% income tax on entire GSP required to fully replace this revenue

% income tax based on NEMW GSP

Sales and Use Tax

567.8

31.5

2.02%

1.96%

Video Lottery/Telecom Tax

117.7

3.1

0.42%

0.41%

Contractor's Excise Tax

66.8

3.9

0.24%

0.23%

Insurance Company Tax

57.2

3.5

0.20%

0.20%

Bank Franchise Tax

37.8

1

0.13%

0.13%

Other Continuing Receipts

152.5

1.6

0.54%

0.53%

Total Continuing Receipts

999.8

44.6

3.56%

3.45%

One-Time Receipts

0

-8.8

0.00%

0.00%

Total Receipts

999.8

35.8

3.56%

3.45%

Transfer from Reserves

17.1

-5.4

0.06%

0.06%

Total General Fund Revenues

1016.9

30.4

3.62%

3.51%

NEMW 2001 GSP Figure:

25003

2006 Projection from this figure:

28985

(Northeast-Midwest Institute, “Total

Gross State Product by State: 1998-2002,”

http://www.nemw.org/gsp.htm

Updated 2004.12.21

downloaded 2005.01.09 20:29 PST

Northeast-Midwest Institute calculations based on data from the U.S. Department of Commerce, Bureau of Economic Analysis.