Cities brace for potential IM 28 passage impact

Supporters of lifting tax on consumables say local government fears overblown

The drafters of IM 28 say they intend for it to repeal the state’s ability to tax groceries. (Photo by Eduardo Soares on Unsplash)

The potential approval of Initiated Measure 28 by voters has cities preparing for budget shortfalls, despite doubt about what the measure could mean to them if adopted.

City leaders in Pierre and Aberdeen took steps this week to outline and brace for hypothetical effects of IM 28 in the event that voters approve it this year. In Pierre, the city commission passed a 2025 budget contingent on the results of the measure, while Aberdeen’s council approved a resolution outlining potential impacts. Officials in Aberdeen expect to lose as much as $2.1 million in annual sales tax revenue if South Dakotans vote "yes" in November.

The measure would eliminate the 4.2 percent tax that South Dakota state government collects on “consumables.”

“The voters aren’t voting on a concept or intent,” Aberdeen Councilman David Novstrup said, according to the Aberdeen Insider. “We’re voting on what the language actually says, not what I say it says, but what the petition says. It’s really important on this matter to know what it says.”

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