SIOUX FALLS, S.D. (AP) - South Dakota voters have rejected a proposal to raise the state sales tax to provide more money for schools and the Medicaid program that provides health care to low-income people.

A teachers union and a health care organization collected signatures to put the proposal on the ballot after Gov. Dennis Daugaard and the Republican-dominated Legislature cut state funding last year for school districts and medical facilities that serve Medicaid patients.

The measure would have raised the state sales tax from 4 percent to 5 percent and was expected to raise an estimated $180 million a year. Half would have gone to school districts and half to Medicaid.

South Dakota voters have also rejected Gov. Dennis Daugaard's plan to give incentive grants to large construction projects.

The Republican-controlled Legislature passed a bill last year at the governor's urging to provide grants to companies to get them to expand or relocate to South Dakota.

The state Democratic party, however, said the estimated $16 million a year in grants would be better used to help fund schools. It gathered enough signatures to put the measure on the ballot for a public vote.

The grants would have been paid for with 22 percent of the receipts from the contractor's excise tax.

South Dakota for years has had a program that refunds construction taxes for large industrial projects, but it expires at the end of this year.

Opponents say such funding decisions should be left to the governor and the Legislature.

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