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SD House of Representatives
Minnehaha and Lincoln County

District 11

 
 
 

News

News from the Antidote by the South Dakota Alliance for Progress

The following news story was published in the April 17, 2012 edition of The Antidote

Corporate Taxes The Highest in the World?

As They & Their Republican Mouthpieces Want Us to Believe?

We Looked – They’re Not

Republicans like John Thune and Kristi Noem like to rant about how America’s corporate taxes are the highest in the world and that if we only would cut them we could jump start the economy and create jobs. It’s a great political line. It also happens to be untrue.

Recent tax figures released for 2011 indicate that the corporate taxes as a percentage of the Gross Domestic Product (GDP) of this country were 1.2 percent of $180 billion dollars last year. That is a low percentage America corporations have paid since the beginning of the industrial revolution.

Indeed, research shows that our corporate tax last year in terms of taxes was approximately 12 percent not the 35 percent myth that Republicans would like to have Americans believe.  That 12 percent is a stunningly low number and one that places the American corporations’ tax burden well below those of most all the industrialized countries in the world. That is a fact and no amount of rhetoric can change that.

To be clear, on paper at 35 percent, the United States does have one of the world’s highest marginal corporate tax rates and that rate is no doubt what people like Noem and Thune are referring to when they wail against corporate taxes. But as every tax analyst knows, and as we suspect Noem and Thune do, the marginal or “paper” rate is a meaningless percentage because of the literally thousands of loopholes used by corporations to lower that percentage every year. Instead, tax analysts will tell you that the only true indicator of actual corporate taxes paid is to look at the “effective” rate that corporations actually pay. And when you do, you will see that their tax rate is much, much lower.

In fact, in 2009, only Iceland had a lower effective rate than did the United States and only two countries collected less in revenue as a percent of GDP than did the United States.

And, of course there is the growing problem of US companies claiming foreign headquarters to avoid paying taxes in this country. Overseas tax havens for thousands of US companies wherein the companies content they are headquartered in places like the Cayman Islands, are costing the US treasury an estimated $100 to $250 billion every year. One simple solution to this problem and to the problem of any individual American citizen taking their money abroad in an effort to avoid paying taxes is to strip them of their American citizenship.

Moreover, it is estimated that fully 43 percent of corporations in American pay no corporate income taxes at all.

News from the Antidote by the South Dakota Alliance for Progress

The following news story was published in the March 14, 2012 edition of The Antidote

Rep. Wink Ignorant to Budget Numbers or Caught Trying to Hide Them

A very interesting exchange among State House legislators occurred on the House floor on the final day of thelegislative session on March 2nd – it was an exchange that makes one wonder whether the Republican House leaders even had a clue what was contained in Governor Dennis
Daugaard’s budget bill or whether they were trying to hide the numbers from the public.

The exchange between Democratic Reps. Suzy Blake of Sioux Falls and Susan Wismer of Britton and House co-chair of the Joint Appropriations Committee, Republican
Rep. Dean Wink of Howes was remarkable in what it says about our one party legislature. It occurred at approximately 7:30 PM, Friday, March 2nd, when there was a lengthy “at
ease” on the House floor while the House waited for the Senate to finish voting on SB197 – the Governor’s budget bill. The transcript below comes from South Dakota Public Broadcasting audio tapes of the exchange.

On the audio tape, you first hear Rep. Suzy Blake being recognized by Republican House Speaker Val Rausch of Big Stone City. Blake then asks the following question:

Rep. Blake: “I just would like to ask our Prime Sponsor, ‘How much did our projected revenues exceed our projected expenses for FY13?’”
Speaker Rausch: “Representative Wink, would you like to answer that question?”
Rep. Wink: “I would like to but I don’t have those numbers right in front of me. I would be happy to get them to you at some point.”
Speaker Rausch: “Representative Blake, you still have the floor.”
Rep. Blake: “Thank you Mr. Speaker. Would there be any other Appropriator that would have those figures?”
[Representative Susan Wismer Democrat from Britton rises and is recognized]
Speaker Rausch: “Representative Wismer, would you like to answer that question?”
Rep. Wismer: “Yes, thank you Mr. Speaker. For FY13….No, for FY12, we were able to repay $10 million dollars of the Reserve funds that were spent in order to cover the disaster draws that were taken for FY12 – the pine beetle and disaster money. For FY12, we were able to repay $10Million. For FY13, actually, revenues exceed expenses by $16Million. $12Million of that excess then will be available to repay the reserves that
were drawn…[taking] the draws that we have taken from the Reserve account…back to zero. So, that’s done. However, over and above that, we also have an extra $4 million dollars that will be falling to the bottom line and that was not in any way appropriated for FY13.”
Speaker Rausch: “Thank you, ma’am.
Representative Blake, you still have the floor.”
Rep. Blake: “Thank you, Mr. Speaker. Because of that, I will be voting red on this budget. Community support providers have not had a substantial or even back to their base spending since 2008. They will be given some money this year: $1.8 million will go to their base spending. These are organizations that are funded totally with Medicaid dollars. A $1.5 million [outlay] to them would have accessed $2.3 million dollars in federal funds. These are organizations that care for people who
cannot care for themselves. We have decided that that’s important in our state. When we have $4.2 million left in our budget, but we cannot help these people that care for others, I can’t vote for a budget like that. I don’t like thinking that that’s what we would leave on the table for
those people. Therefore, I would urge you to think about this before you vote. Thank you.”

All of this discussion begs an important question. How could a competent Appropriations Co-Chairman, Rep. Wink, not know the answer to Rep Blake's simple
question of, “How much did our projected revenues exceed our projected expenses for
FY13?” If anyone should know that answer it should be the Co-Chairman of the State’s Joint Appropriations Committee. And if the Chairman couldn’t answer it, how come a Democrat, Susan Wismer who sits on the Joint Appropriations Committee could so easily and readily answer the question? In any state legislature but particularly one in which the state requires a balanced budget, wouldn’t the Chairman of the legislative committee that passes the budget bill be able to regurgitate those numbers in his sleep? Alternately, did Rep. Wink know the answer but was not providing an answer to Rep. Blake because he actually thought that Democrats like Rep. Wismer who sits on the Appropriations Committee (and is a
Certified Public Accountant by the way) did
not know that there was $4.2 million left on
the table after the budget bill had been
approved? And isn’t it fairly apparent that
Rep. Blake knew the answer to her own
question but wanted to hear the Chairman of
the Joint Appropriations Committee admit
that there was $4.2 million left over after all
state bills were paid – with no accounting as to where that money would go?

Sources in the Capital tell The Antidote that
House Republicans were said to be
complaining that the Governor was not
telling them final budget numbers and that
they indeed had to hear it from the
Democrats that there would be $4.2 million
left on the table after all state obligations
were fulfilled.

Regardless, the audio tapes don’t lie. Either
the Appropriations Committee Chairman
did not know the budget numbers from the
bill that his own Committee passed or he
was playing games with his own caucus.
Democrats like Blake and Wismer clearly
knew better. Kudos to them for their
knowledge and tenacity. Because of them,
South Dakotans were provided the truth
even if Republicans did not know or did not
want us to know the final details of our own
state budget.

[The Antidote editors would like to thank a
perceptive and well schooled senior observer of state legislative matters for bringing this fascinating discussion to our attention.]

Visit www.sdallianceforprogress.com to sign up for a subscription to The Antidote

News from the 85th Legislative Session

News from the 2010 Legislative Session

Notes from the S.D. Legislature by Darrell Solberg

March 2010

*Another tough Legislative session, the 85th, is rapidly coming to a close. There have been many high points and yes low points during the session. We must all remember the CORE FUNCTIONS of State Government:

>Protect people
>Help those that cannot help themselves
>Provide education
>Encourage jobs and economic development
>Maintain infrastructure

*We spent an enormous amount of time discussing useless resolutions rather than addressing the revenue short falls that we are experiencing or planning on how we are going to fulfill our duties of providing for the core functions of State Government. In fact, one of the resolutions generated quite a laugh as South Dakota seemed to be the laughing stock on one of the national TV programs because of it.

*The budget again dominated the conversation during the last weeks. Unfortunately, we didn’t get the budget issue settled, thus we will be doing that March 29th and possibly the 30th. Much to my dismay the balancing of the budget has been put off until we see what we’ll be receiving from the Federal Government in stimulus monies. The stimulus money bailed us out last session and it looks like it will do likewise this session. We cannot afford to continue the growth of State Government the way it has the past seven years and rely on reserve funds or the Federal Government to balance the budget. We need a strong prioritization of spending and keeping things within our means.

*Both parties have laid out cuts to balance this year’s budget; however I’m having heartburn over some of the cuts of the majority party. 

>Opportunity scholarship funding has their blessing to be slashed $2,000,000.

This scholarship is meant to provide some of our brightest high school graduates with a scholarship to go on the college in S.D. Cutting this back may mean that they go out of state to college, which means we risk losing them as part of our work force. Education is an investment and the driving force of economic development, thus I believe this cut would be very short sighted.

It is time for the state to looking at funding a need based loan program for students to go on to higher education in S.D. There are many students that simply don’t go on to post high school education because of cost. S.D. has one of the lowest student loan defaults in the country, thus this would be a good investment for the state for our future.

It pains me that we give a pipeline a $38,000,000 excise tax rebate and we can’t find money to properly fund education, provide state employees or providers a raise.

>Intensive Meth Program is slated to be cut $1,700,000, which means cutting 16 FTE’s that are providing a very valuable service in S.D. 

This program has proven itself, as it has kept individuals from having to be incarcerated for a long period of time. Incarceration costs much more than prevention. This program helps addicts recover and get back into the main stream of S.D. rather than sitting in prison and costing the tax payers many dollars. The drug court keeps people on the outside, thus cutting it will cost much more down the road.

>Tobacco Prevention fund is slated to be cut $2,300,000. This means cutting 3 FTE’s and lower the education of the dangers of smoking.

Smoking is an individual right, however any education that the state can provide to highlight the risks of smoke will pay off in the long run.

*I was also disappointed that some good bills did not reach the House floor for full debate. They were killed in committee or came to the House floor with a DO NOT PASS recommendation, thus the only discussion centered on striking the NOT.

>HB 1255 to cut the sales tax on food items. It passed in committee 9 to 6 to send it to the floor with a DO PASS recommendation. However, through posturing the bill was then sent to the Appropriation Committee where it failed along party lines. South Dakota remains only one of seven states that use full state sales tax rate on food items. 36 states plus DC don’t tax food items.

>SB 191 to establish the South Dakota Early Learning Council. This bill would have provided voluntary pre-kindergarten programs to children from low-income families. It passed in the Senate, but failed in the House Education Committee pretty much along a party vote. The bill was smoked out of committee and it came to the House floor with a DO NOT PASS recommendation, so again all we could do was discuss striking the NOT and not the merits of the bill.

I am looking forward to going back March 29 to balance the budget. Hopefully we’ll see some amendments to the general bill that will restore K-12 funding to 1.2% increase and amendments to provide State Employees and Medicaid Providers an increase. We feel that there are monies available to do this now, rather than have to wait until the economy rebounds.

There are solutions for our challenge, however they are not always politically correct, popular, or evenly distributed. Democracy is a wonderful form of Government. Sometimes it is the people within the democratic forum that causes the problem.

March 6, 2010

Notes from the Democratic Party in Pierre:

REPUBLICAN BUDGET CUTS

* The HASTY list of cuts is a vivid reminder that state government is BROKEN. The system isn't working. Slashing key programs like Extension, health care and K-12 schools (*the state fair ... pick your favorites) is just a BAND-AID approach to a big problem.

* We need NEW LEADERSHIP in Pierre that provides stability, FISCAL DISCIPLINE, fairness and transparency to the budget process. Government must CHANGE -- and become leaner, smarter, more streamlined and efficient. We haven't balanced our books with ongoing revenues for seven of the last eight years — now eight of the last nine. How long can that continue?

* VICTIMS of the GOP cuts will now have a few short days to plead their case in Pierre. This is no way to set a budget for a $4 BILLION operation like state government. It's not fair to the people. It's not open government.

* Democrats have for years been offering solid ideas on how to avert this last-minute fiscal wrecks. We have advocated LIMITING GOVERNMENT GROWTH by 3% a year. That step alone, if adopted, would have kept us out of the coming week's BUDGET CALAMITY.

We've also called for ZERO BASED BUDGETING -- so we have a process that enables citizen legislators to truly scour government for efficiencies, waste and better ideas

* Some of the GOP leaders' budget cuts mirror the budget cuts offered by Democratic leaders as far back as November, and we appreciate their willingness at this LAST MINUTE to join us in cutting corporate tax breaks, legislative travel and an across-the-board cut that we advocated from the start.

But they DON'T GO DEEP ENOUGH. We believe we can save millions just by ending NO-BID CONTRACTS -- and millions more by FINDING REAL, LONGTERM SOLUTIONS to stopping government growth — especially through A FAIR AND OPEN BUDGET PROCESS.

* The ideas now on the table may get us through the week ahead. BUT THIS FAILS TO FIX LONG-STANDING PROBLEMS in state government's finances. We need a real VISION to reform and change the way government works in South Dakota, and the LEADERSHIP to make it work.

CORPORATE TAX INCENTIVES SHOULD TARGET JOBS

Democrats proposed cuts in corporate tax give-away programs on the first day of the legislative session, and now the entire legislature seems ready to follow that lead. More than $70 million in corporate sales and contractors excise taxes will be rebated in the year ahead if the legislature doesn’t reform the system immediately.

Democrats believe some incentive programs should be continued, but there must be certain goals:

• Incentives should be targeted to companies that provide permanent jobs, and the number of jobs should be commensurate with the incentives. Incentives should be part of the budget process (as opposed to the secrecy of the past, when blank checks are given to companies regardless of merit). A “return on investment” evaluation should be done for each project. Projects that provide alternative energy (bio-fuels, wind, etc.) should be priorities.

A MILLION SAVED IS A MILLION EARNED

On several occasions this session, Republicans voted to intentionally pick court fights with the federal government or other entities. The court battles could cost hundreds of thousands of dollars in lawyer fees and costs if the measures do land us in federal court.

Even though our State Constitution already ensures the public’s right to a secret ballot (Article 7, Sect. 3), Republicans block-voted to put a measure on the November ballot that confuses the constitution with similar language. They apparently did so to placate large corporations who are battling with labor unions over the processes for union elections.

Anything done on the state level would violate the National Labor Relations Act and federal law, but Republicans insisted on risking a major lawsuit.

They did the same on Wednesday in the House of Representatives when they voted to override federal gun manufacturing laws — a nice idea, perhaps, but a clear violation of the law and another invitation for a lawsuit. Such lawsuits will come at the expense of school funding, health care and other budget priorities.

FTE ISSUE MORE CONFUSING THAN EVER

Harry Truman said, “If you can’t convince them, confuse them.” Republicans must have read his biography, because they are making it harder to get an accurate count of how many people work for state government. Republicans have been budgeting for hundreds of FTEs who don’t exist — though the bureaucrats spend the money anyway. Now Republicans have passed a bill on a party-line vote that says hundreds of part-time workers who actually draw paychecks are no longer FTEs.

But any way you count them, state government employment has mushroomed by 1,300 or more FTEs in the last eight years. That’s a rate of a new hire every 48 hours. No wonder we have a swelling budget deficit. State government has outgrown our ability to pay.

February 26, 2010

Notes from the Democratic Party in Pierre:

VOTES SHOW LACK OF SUPPORT FOR STUDENTS

We give a lot of speeches in Pierre. Everyone says he or her is for our schools. But the test actually is not in the speeches but in our votes.

Already this session, we can disclose where the support is for our school students.

Democrats have fought to:

  • preserve funding for the Opportunity Scholarship program, but Republicans succeeded in stripping funding for freshman college students
  • continue the same funding rules for small schools, but Republicans in the House voted to take away about $1.5 million for open enrollment students
  • honor the current statute that provides a 1.2 percent inflationary increase for K-12 school districts, but Republicans block-voted against it in the Senate
  • keep the consolidation incentives for small school districts that seek to combine, but Republicans voted in the House to kill them.

HOW TO BALANCE THE BUDGET

There are stark differences in how Democrats and Republicans want to balance the state budget in this recession.

Democrats have offered a long list of cuts and efficiencies — ranging from out-of-state travel, aviation cuts, consolidation of offices, salary reductions for legislators and top-level bureaucrats, savings in corporate tax incentives and even across the board cuts if necessary. They have been killed by party-line votes or ignored by the appropriations committee.

Republicans have yet to offer their ideas. They will probably make amendments to the general bill in the closing hours of the 2010 session without adequate public hearings and input.

Both Republicans and Democrats will agree on how much money to spend — the difference is how we spend the limited dollars available. The difference is priorities. Do we balance the budget on the backs of students?

CORPORATE INCENTIVES WILL BE KEY

One of the reasons for the state’s budge deficit is that state government is giving away tens of millions of dollars every year in corporate tax incentive and grant programs.

Democrats believe the best way to deal with the recession is to grow the economy. The debate is l) how many incentive programs can the taxpayer afford, and 2) where do we get the best return on investment?

One key argument has been over funding for the Sanford/Homestake Laboratory in Lead. Democrats believe we’ve invested too much money (some $100 million) to quit now, but if another $5.5 million is needed then it should come from economic development funds rather than from funds that could be used for other priorities such as balancing the budget, schools and health care.

Democrats insist that the money could come from the governor’s Futures Fund, which is replenished daily from a small sliver of the unemployment taxes paid by main street businesses all across South Dakota. The Futures Fund is dedicated by statute to research, education and economic development — a perfect fit for the Sanford Lab.

Republicans say the Futures Fund is all obligated — but they have been saying that ever since it was created so they could spend it without any legislative input. The fund raises $11 million a year and about $6 million is spent every year. It has built to $23 million today — and it will grow another $5 million or so before the next fiscal year begins  -- certainly the governor hasn’t already obligated the $5 million that is coming into his coffers before July 1st????

Another contentious issue is whether cross-country pipeline projects that provide few permanent jobs (i.e., TransCanada) should qualify for tax rebates amounting to tens of millions of dollars. Such projects do provide short-term jobs, and they will deliver property taxes to local governments. But do the tax rebates provide a good ROI for taxpayers? Do they deserve breaks that smaller projects get in your own home communities? Can we afford to continue such rebates? We’ll continue to ask those questions.

February 20, 2010

Notes from the Democratic Party in Pierre:

BUDGET SOLUTIONS STALLED
Democrats offered a package of budget cuts, reorganizations, and savings in the first week of the legislative session; but at the end of the sixth week we are still waiting for solutions from our Republican legislative colleagues.

Republicans also killed most of our party’s proposals on party-line votes — including out-of-state travel cuts, pay cuts for legislators and executive-level state officials, combining state offices, eliminating Washington lobbyists, and others.

“If you like the way they do things in Washington, you’ll love the way they do things in Pierre,” said Senate Minority Leader Scott Heidepriem this week. He believes an across-the-board cut may still be necessary to balance the state’s budget for fiscal year 2011.

ELECTING AN AG CHAMPION
South Dakota may be the USA’s most rural state, but seldom do farm and ranch issues get much attention at election time.

State Rep. Dean Schrempp of Eagle Butte tried to change that on Wednesday with a proposal that would call for election of the Secretary of Agriculture. The position is now filled by appointment of the governor.

Republicans on the House State Affairs Committee argued that the elected official might disagree with the governor – or even run against him. By that argument, we would just allow the governor to appoint everybody in Pierre.

Agriculture needs a higher profile in the public arena, and by electing an agriculture champion every four years we could make that happen. Democrats supported the bill but it was killed on a party-line vote.

SHOULD WE TAX FOOD?
Legislators have argued for decades over the morality of taxing food purchases. This hardly seemed like a good year to repeal any tax because of the budget shortfall, but Rep. Marc Feinsten and Sen. Pam Merchant came up with a reasonable plan to slightly raise the sales tax to make the policy revenue neutral.

Rep. Feinstein estimates that a .3% hike in the sales tax to 4.3% would be enough. He and others pointed out that the 4% state sales tax on food can be a huge burden on poor and middle class families and elderly citizens — in fact it can easily amount to two weeks of groceries.

The bill passed in House Taxation 9-6, but it still has a long ways to go.

DEMOCRATS TRY TO INSTILL BUDGET DISCIPLINE
State government has shown no discipline in spending over the past eight years, so Democrats offered two ideas on how to control growth in the future. Both were killed on party-line votes in committee. Both were similar to methods used successfully in other states:

  • Sen. Scott Heidepriem proposed limited state spending growth to 3% per year – an idea he and other Democrats have championed for several years — and one that would have avoided the current budget shortfall.’
  • Sen. Heidepriem and Rep. Bernie Hunhoff also brought a new idea that is patterned after other states. It calls for spending no more than 98 percent of ongoing revenues each year on general, on-going expenses of state government. The remainder would first fill the state’s budget reserve funds and then be directed to K-12 education. A two-thirds vote of lawmakers would be required to spend one-time funds.  Spending one-time funds for ongoing revenues is one of the major reasons why we have a budget problem in South Dakota.

WIND ENERGY INCENTIVES
Democratic legislators have joined with our Republican colleagues and energy leaders to find compromises that will encourage growth in the wind energy industry while also protecting the best interests of landowners and rural communities. Hopefully the compromise can be passed into law.

Rogue speculators have tried to tie-up wind easements in South Dakota — a practice that hurts landowners as well as legitimate developers.  The compromise, if passed, will keep current safeguards in place on easement practices — but relax them for large projects that need more time for planning and development. The compromise will also address the “gag” provisions that many developers use to keep landowners from sharing information on easement benefits. Democrats have fought for land-owner protections, and will continue to be sure they are part of the policy.

THREE WEEKS TO GO
The 2010 session has just three weeks remaining. We must figure out how to provide essential services — education, health care and public safety — without raising taxes on South Dakotans. It will take a combination of careful spending of reserves and budget savings to accomplish our goal.

Democrats will continue to oppose any new taxes on people and small businesses in South Dakota. We’ll also try to find better efficiencies in the tax give-away programs that are costing the state tens of millions of dollars. If we don’t change the laws, the Trans Canada XL Pipeline will receive a $38 million tax break in the coming year. That money would go far in continuing basic services for South Dakotans.

 

February 13, 2010

Keloland Television aired a news segment regarding the 3rd penny sales tax bill. Click here to read the segment and see what I said about the bill.

February 12, 2010

Notes from the Democratic Party in Pierre:

DEMOCRATS TRY TO CUT TRAVEL BUDGETS
Democrats attempted this week to save money by stopping out-of-state travel for legislators for two years, but their efforts were stymied by a block vote by Republicans in the House State Affairs Committee.

Lawmakers spent about $900,000 on 575 trips over the past four years. Republicans wouldn’t even support a proposal by a fellow Republican — Rep. Shantel Krebs of Sioux Falls. Some of the taxpayer-paid trips are to conventions hosted by a right-wing advocacy group called ALEC.

The GOP argument was that the savings were not enough so they voted no. But Democrats said good programs in education and health care are on the chopping block, and legislators should “look under every rock” for cuts that are the least harmful to South Dakota citizens.

DEMOCRATS ALSO OFFER TO CUT LEGISLATIVE SALARIES
Democrat legislators also proposed cutting their own salaries in the House State Affairs Committee on Wednesday.

Two bills were offered — one to cut 5% and another to slash lawmakers’ salaries 30%. Both were killed by Republicans, with arguments that legislators deserve even higher pay and that the cuts don’t amount to enough. Yet, Republicans have yet to offer their budget cut proposals.

Democratic leaders said budget cuts this session will affect all South Dakotans — many of whom have experienced wage cuts and even job losses. The proposed cuts would have raised from $60,000 to $180,000.

On Thursday, an effort to fund an important agricultural research program failed on the House floor due to the budget squeeze. It would cost $50,000.

AND DEMOCRATS TRY TO REDUCE EXECUTIVE SALARIES
Rep. Eldon Nygaard of Vermillion also offered a bill this week to reduce some high-end, executive salaries in state government. He proposed cutting 5% of salaries over $80,000 to raise nearly $1 million.

Again, the idea was opposed by all Republicans. Nygaard believes state employees are largely underpaid — and he said many who receive higher salaries are underpaid in the marketplace — but the budget crisis of 2010 requires a shared sacrifice.

OTHER CUTS PROPOSED BY DEMOCRATS
Democratic legislators have also proposed a host of other cuts, reorganizations and efficiencies in the 2010 session.

They’ve asked for elimination of Washington lobbyists, a curtailment of the state’s air fleet, savings in corporate economic development programs, executive branch travel, corrections construction costs, and others.

ACROSS THE BOARD CUTS MAY BE NEEDED
Democrats have also proposed that a modified across-the-board cut may be needed if Republicans won’t join their efforts to find cuts in individual programs.

Some Republicans object to across-the-board cuts, saying there are unworkable. But Sen. Scott Heidepriem has pointed out that almost all surrounding states have instituted such efforts to balance their budgets.

Heidepriem said fiscal discipline has been lacking for many years in Pierre. He noted that the Republicans have not balanced the state’s budgets with on-going revenues for seven of the last eight years — and once again this year it appears that one-time revenues will be used rather than cuts and efficiencies.

ZERO BASED BUDGETING
Heidepriem and other Democrats say that if they had the votes, they would implement a process of Zero Based Budgeting so that the citizen legislature had a process to fully review and possibly reduce budgets in each and every department.

BEST QUOTE OF THE WEEK
Rep. Gerry Lange of Madison told the House Taxation Committee, “The art of taxation is plucking the most feathers from the goose with the least amount of squawking.”

February 5, 2010

Read about my lifetime resident license for small-game hunting and fishing license in this article by Kevin Woster in the Rapid City Journal.

To read about my observations in Pierre, click here.

84th Legislative Session

March 2009

DEMOCRATS SAVED ROUNDS FROM BUDGET COLLAPSE

Panicky was how Gov. Mike Rounds reacted when he realized as late as January that the nation was caught in a severe recession. Rounds set himself up as the first governor in state history to shut down the State Fair and the State School for the Deaf, and to become the only governor without a Birth to 3 Program, a state archeology program or a State Arts Council, all of which would fall victim to Rounds’ budget cuts. He also suggested that property taxes should go up.

Republican legislators, quaking over Rounds’ radical cuts and the widespread shock and anger of parents and grandparents and local governments, gripped the panic lever and introduced 25 percent and 50 percent increases to the state sales tax as their solution.

Democrats in Pierre reacted with a list of responsible cuts and funding sources from budget slush funds to avoid the worst cuts and to keep education and health care from failing South Dakota’s people. The last thing Democrats wanted was to increase taxes.

But it was the Democrats in Washington along with three Republican U.S. Senators and President Barack Obama who delivered relief for this legislative session and the 2010 legislative session with the American Recovery and Reinvestment Act. South Dakota’s $88.1 million share restored money for education, Birth to 3, health care programs and other needs. It took the State Fair and the School for the Deaf, both more than a century old, off the chopping block. A special compromise tourism tax increase kept the S. D. Arts Council in the black. And the stimulus money promises to put South Dakotans back to work on highway and other construction projects.

Even with the massive infusion of federal stimulus money added into the $3.9 billion state budget at the last minute of the 2009 session, Republicans still wanted to create some victims to their poor management skills. Democrats tried in the Senate and the House to use available funds to provide for inflationary increases for nursing homes, hospitals and other facilities that provide health care to low income people under Medicaid. Republicans killed the funding in favor of restoring the state’s budget reserve (slush) funds. Slush funds won out over low income family health care services.  

STATE FINALLY ENACTS OPEN GOVERNMENT LAW

The words are stunning when set against the history of the Gov. Mike Rounds administration: “The public clearly has a right to know what government is doing and to participate in the process. That is the foundation of democracy.”

Amazing. The quote is his statement as he signed the so called presumption of openness bill, a piece of legislation he said last year he strongly opposed and saw no need for. The bill’s primary sponsor, Republican Sen. Dave Knudson, was in Rounds’ camp last year when the bill was introduced in the Democratic legislators’ agenda for the 2008 session. Like Rounds, Knudson recently changed his tune when he discovered that he, at long last, looked like he was protecting secrecy in South Dakota’s government by saying there was no need for presumption of openness law. It was a position Knudson maintained despite months of hearings and deliberations on reforming South Dakota’s laws and the state media and legal lenders all called for South Dakota to join in the rest of the nation by enacting a presumption of openness law.

Rounds’ and Knudson’s efforts to clamp down on government information that should be public earned then the distinction by the Better Government Association (BGA) which ranked their policies as “dead last in integrity.” Wallowing at the bottom of the nation in open government laws and integrity were Vermont, Alabama, Tennessee and Montana. Believe it or not, New Jersey was the top ranked state.

Since the BGA announcement, the Round administration has been hit by a barrage of embarrassments including new that the Governor’s brother-in-law worked for a lobbyist firm called Powertech Uranium Corporation, attempts to prevent Republican Sen. Gene Abdallah from learning the number of state airplanes, scandals of no-bid contracts and more.

Look for years of amendments to remove loopholes inserted in the new law to prevent public disclosure of government actions, as well as attempts to erode the law.

March 12, 2009

The House Taxation Committee took some really significant action on March 12, 2009 which could save the arts programs by finding some funding in expanding the special tourism taxes to include May and October. As one lobbyist against raising taxes put it: "If you're going to have to swallow a frog, it's better to do it early in the morning." We also voted down several proposed sales taxes, like those on advertising and on libraries.

More and more we are seeing bi-partisan efforts to find ways of balancing the budget without hurting people. A general sales tax increase of 25% was defeated, but in the Transportation Committee, they did agree to increase license fees which haven't changed for some ten years. Out-of-state "RVers" still get quite a break from what they would pay in other states. I questioned why we should be a "tax haven" for the wealthy retired folks who live most of the year elsewhere.

At the arts celebration Tuesday evening, it was my good fortune to meet and visit with Dale Lamphere, the creator of the four statues in the Capitol Rotunda: Vision, Courage, Wisdom, and Integrity. It's why I see this placed as the "People's Cathedral." What we do here truly has moral and ethical implications as we struggle to advance the common good. Coincidentally, at our table, the artist who designed "Termespheres" fascinated us with his insights and good humor. We are so gifted to have so many creative people in our state who are willing and eager to share their talents.

 

March 6, 2009

LEGISLATORS SHARPENING THEIR PENCILS

Just one week remains in the 2009 legislative session, and all 105 legislators are sharpening their pencils because our final days will be all about the $3.6 billion budget.

General funds (your tax dollars) represent about one-third of the budget. We’re awaiting final projections on revenues for the coming year, but everyone expects them to be flat at best and possibly even lower than the last fiscal year.

However, the Obama Stimulus Package is a savior for states. South Dakota is now projected to receive $656 million to balance our budget over the next two years, plus we have an opportunity to compete for other monies as well.

The goal of the stimulus package is to revive the national economy so we have a responsibility to put the money to good use in the South Dakota economy. We shouldn’t hoard it away; we should be sure that it is spent wisely on South Dakota infrastructure and services so that it helps to invigorate our economy.

Many of the important education and health programs cut by the governor earlier this session are likely to be restored when we finish with the budget next week.

Of course, our challenge will be to figure out how to wean ourselves from the stimulus money in two years when we spent it for ongoing needs. Hopefully our state economy will be on the rebound by then; if not, we’ll face some very difficult decisions on how to provide essential services in South Dakota. But every year has new challenges.

HELPING THE UNEMPLOYED IN SOUTH DAKOTA

More South Dakotans are losing jobs every day. Our unemployment rate jumped .7 percent in just one month to 4.4%. We’re still below the national average, but that’s little consolation for unlucky families trying to buy groceries and make rent or house payments.

Many of us in the legislature want to use the federal dollars to maximize assistance for those South Dakotans who have lost jobs in the recession.

If state government is too slow to implement the federal guidelines, we could leave as many as 1,000 unemployed workers without benefits. That would be a mistake; we should fast track the unemployment modernization program and get assistance to people who are hurting financially. That’s the purpose of the stimulus package.

We’ll be debating the state’s unemployment benefits in the final days of the session. The best move for businesses and for unemployed workers is to include as many in the program as possible and maximize the federal assistance dollars.

HOW TO TAX AG LAND

Taxation of farm and ranch land in South Dakota has historically been a thorny issue, and it has become more difficult in recent years because land sales often have little to do with actual agricultural potential. Buyers are often more interested in hunting rights, development potential and other issues.

Consequently, it has become very difficult to value the land. Valuations sometimes vary greatly between neighboring counties with similar crop yields.

Several years ago, the legislature began a multi-year process to switch from valuations based on recent sales to a system based on actual agricultural value. Opponents call it a form of an income tax but proponents say it will provide stability to ag land valuations.

The new system will maintain the existing balance of taxation between our three classes of property — owner occupied housing, commercial and agricultural. However, everybody agrees that ag land valuations may grow more slowly, and that could eventually create a minor shift to the other two classes.

There were several attempts to derail the new system in this year’s legislature but they were defeated so state officials will continue to work toward implementation.

LEGISLATURE NO LONGER A WINTER PASSTIME

Our part-time citizen legislature was designed in horse and buggy days. Farmers wanted to hurry out to Pierre after the holidays, do the public’s business and return home well before the ground thawed so they were ready to plant spring crops.

We still meet for 40 days in late winter, but now the work continues all year long through various task forces and joint committees.

We’ll be choosing several subjects as summer study topics before we adjourn this week.

 

March 1, 2009

DO OLD CARS DESERVE A DISCOUNT?

Lawmakers are reluctant to pass any fee or tax increase, but some are surviving. If it’s necessary, we still want to make the tax as fair as possible. For many years, we’ve given a 30% break on vehicle license plates to cars five years or older. There’s been an effort to eliminate the discount altogether, or to only give it on cars 10 years or older.

State Rep. Paul Dennert amended the license plate bill to preserve the discount on five year old cars and older. He argues that old cars should cost less because they’re usually driven fewer miles, and often they are spare vehicles for families or small businesses.

EDUCATION UNDER ASSAULT

Republicans in the House slashed education funding that was put in place just two years ago by voters in a statewide vote. In the 2006 election, South Dakotans committed about $9 million to special programs known as ESAs, T-CAPs, and CTEs that provide cooperative education programs, teacher development and tech training in districts across the state.

In a late-night vote, House Republicans eliminated the dedicated dollars for schools and redirected the money to the state’s general funds where they can be used for any purpose.

Fortunately, President Obama’s stimulus package will require South Dakota to maintain its current educational spending if we want to access the federal monies. Otherwise, I’d be very worried about funding for our schools in the current political climate in Pierre. Just about every one of the 105 legislators campaigned on the need to support our schools, but somehow those campaign promises seem to get lost between home and Pierre.

SCHOLARSHIP PROGRAM IS BRIGHT NOTE FOR NEXT WEEK

Nearly 9,000 college and tech students in South Dakota qualify for need-based scholarships – but unfortunately we are the only state in the nation that has no such program.

That may change thanks to a proposal offered on the House Floor to a bill that would create the West River Higher Education campus by Rep. Kevin Killer of Pine Ridge.

Rep. Killer’s bill would create LEAP scholarships for students at South Dakota’s public, private, tribal, and technical schools. Although we probably won’t be able to provide funds for all who qualify, the proposal will provide help for the hardest-pressed students. We proposed $100,000 of general funds that would be matched dollar-for-dollar by the U.S. Department of Education.

The program is especially important in 2009 because the recession is sending many South Dakotans back to school to learn new job skills.

EDUCATE OR INCARCERATE

South Dakota has a lower crime rate and a higher prison rate incarceration rate than our neighboring states. Our incarceration rate is 426 per 100,000 citizens. Other states have rates of 181 (Minnesota), 296 (Iowa), 356 (Montana), and 221 (North Dakota).

Other states are finding alternative ways to deal with non-violent offenders are less expensive for taxpayers and more effective at rehabilitation.
Democrats want to expand drug courts in South Dakota and look for other solutions in conjunction with the Unified Judicial System, local communities and the Department of Corrections. We tried to pass a measure addressing the issue but it was killed on a party-line vote by Republicans.

This week we authorized funding for a new prison in Rapid City. When we build prisons we always fill them. Every dollar invested in corrections is a dollar we can’t spend on education, tax relief and health care.

UNEMPLOYED IN SOUTH DAKOTA NEED HELP

We received word this week that as many as 70 South Dakotans are losing their jobs. Of course, many others are facing cutbacks in hours and wages. The recession is hitting our friends and neighbors. Our employment rate is well below most other states, but if you’re the man or woman without a job that is little consolation.

Hopefully this legislature will fast-forward the employment assistance provided by the Obama administration. The program will benefit both workers and employers and could also save us from having to increase unemployment taxes on businesses.

Unfortunately, Gov. Rounds and some Republican legislators have indicated that they may not be interested in accessing the maximum amount of unemployment assistance for South Dakotans. He said it might cost businesses extra money in the future, but other assessments indicate that the Federal Unemployment Insurance Modernization Act (UIMA) that calls for minor changes in our laws will provide $17 million and cover the changes for 12 years or more. That will keep the fund above $11 million in South Dakota and prevent higher taxes for employers while still helping workers.  

February 20, 2009

IMPORTANT PROGRAMS WILL BE SAVED

We could almost hear huge sighs of relief this week, as the legislature began to reverse many of Governor Rounds’ ill-advised budget ideas.

In both House and Senate committees, bi-partisan efforts were made to save the Birth-to-Three program, the arts council and other important programs that affect health and education services in South Dakota.

Rather than eliminating essential programs, Democrats have advocated an across-the-board cut that would force every department to find efficiencies in government that people expect. Democrats have also urged cuts in travel, state FTEs, private contracts and other areas of government that have grown in recent years.

SALES TAX REVENUES

Legislators are watching sales figures in South Dakota almost as breathlessly as the retailers and other businesses who report them. The figures are an indicator of the health of our economy, and they reveal how much money we have to work with as we prepare the 2010 budget.

Although there is much “doom and gloom” talk, it should be noted that overall tax revenues are slightly ahead of figures from one year ago. The revenues are lagging behind projected revenues but they are above actual revenues.

General fund receipts totaled $689 million through January 2009 for Fiscal Year 2009. That compares to $685 million for FY 2008. However, revenue projections called for $713 million so we currently have a $24 million deficit in the FY 2009 budget.

OBAMA STIMULUS PACKAGE

Lawmakers are also poring through the long and complicated stimulus package signed this week by President Barack Obama. It fixes many of our immediate budget problems on the state level — providing $182 million in highway funding, $39 million in water infrastructure projects, $180 million in educating and training funds and millions more in energy assistance, weatherization, Indian Health Services, nutrition programs, Head Start and law enforcement. The package has some strings attached, but it is well designed for states and fits our most pressing needs in transportation, education and health care.

NO MORE ‘BUSINESS AS USUAL’

The Obama stimulus package will help to balance our state and school budgets for the next two years. However, the federal monies cannot and should not be counted on beyond 2012, so we must start to prepare today for paying our own way.

That means we must not go back to “business as usual” in Pierre. We have to find some way to control the future growth of government and to demand more efficiencies in every department. Democrats have advocated a Zero Based Budgeting concept in which every function of every department is analyzed and justified on a periodic basis. State government has been growing much faster than inflation for many years. State employee numbers have swelled by 2,000 in just the last decade.

NATIVE AMERICAN ISSUES SHUNTED ASIDE

Many legislators were disappointed when the House State Affairs Committee killed Rep. Ed Iron Cloud’s proposal to create a task force to study issues from Indian Country. Roger Campbell, the governor’s director of Tribal Government Relations, testified in favor of the bill but it was killed by Republicans on the committee.

Iron Cloud said more dialogue would lead to better communications, and that would result in benefits for all South Dakotans regardless of race.

February 15, 2009

REVENUES IDENTIFIED FOR FUNDING BIRTH TO THREE AND OTHER IMPORTANT PROGRAMS.

Democratic legislators on Friday identified a $7 million plan to restore funding for these essential programs:

  • Birth to Three children with disabilities - $1.8 million
  • Medicaid Dental program - $1.4 million
  • Office of the Arts restoration - $650,000
  • Archeological Research Center - $310,000
  • Medicaid Provider Reimbursement - $650,000
  • Nursing home client costs - $430,000
  • National Board Certiified Teaches - $100,000
  • Child & Adult Nutrition, etc. - $75,000
  • Autism Grant Program - $125,000
  • HPV Vaccinations Program - $60,000

By finding general fund dollars for these programs, Democrats say the state will also save $4 million in federal funds for essential education and health care programs that would otherwise be shifted to local governments and families who have children with a disability.

THE FUNDING SOURCE

Rep. Bernie Hunhoff and Sen. Scott Heidepriem, the Democrat’s legislative leaders, say the programs could be funded by revising the state’s revenues from the Deadwood gambling industry.

The gambling industry has outgrown the state’s existing tax mechanism. The governor also has a proposal in the 2009 session to revise the tax. However, the governor’s proposal raises only $4 million and would hit the smallest casinos too hard — taxing all machines equally. It could actually result in a decrease in machine numbers, and falling revenues.

The Democrats’ plan would install a progressive tax for the state on machine revenues — lowering the tax for machines that earn less than $14,000 a year and progressively raising the fee on those that earn more.

When the Deadwood gaming industry was created in 1990, the casino taxes represented about 23% of gross revenues. However, that percentage has gradually diminished because taxes are largely based on per machine fees rather than revenues. The Democrat proposal will simply restore the tax revenue to about 23% of gross revenues, assist the small and independent casino operators, and provide a plan that will grow revenues gradually as the industry expands.

WIND ENERGY ANNOUCEMENT

News of a 12,000 MW “Green Power Express” wind energy transmission line was the buzz in the capitol on Thursday. Legislators are considering a number of bills focused on this exciting new prospect for South Dakota.

There are also rumors of a major new wind farm in the works for central South Dakota — perhaps the biggest wind farm in the world to date.

Democrats are encouraged by these developments, and are focusing their efforts on ensuring that landowners’ interests and rights are protected. We also want to find ways to maximize the benefits to South Dakota communities.

PAY TO PLAY’ PROPOSAL KILLED BY GOP

Republican senators killed a Democrat proposal to implement a “pay to play” bill modeled after the Illinois statute that entangled Governor Blagojevich, who was impeached last week.

South Dakota has no laws on “pay to play.” Sen. Scott Heidepriem said Senate Bill 168 is not an effort to point fingers at past conduct, but intended to create a “bright line” for both gubernatorial candidates and contributors who do business with the state of South Dakota.

There are 1,800 “no-bid” contracts currently filed in the State Auditor’s Office. Those who benefit from the contracts can and do write large campaign contributors to candidates for governor. “It is not enough to avoid impropriety, we must also avoid the appearance of impropriety,” he said.

Democrats will continue to seek to implement “better government” programs that create transparency in political campaigns and avoid the potential for abuses.

Money obviously greases the wheels of politics, but it should not also grease the machinery of state government. As the laws now stand, that potential clearly exists.

January 2009

The gavel has sounded to start South Dakota’s 84th legislative session. Our state is 119 years old but for many years the legislature only met every two years, so this is just our 84th gathering.

Your legislators all run for office and then leave their homes and workplaces because they want to tackle South Dakotans’ problems. And as you know, we have plenty to work on in 2009.

We traditionally begin each legislative session by welcoming the governor to address the legislature and deliver his State of the State Address. We listened on January 13th, the first day of session, and some lawmakers seemed surprised at Gov. Rounds’ overly-rosy report. It sounded more like a rousing, cheerleading report by a Chamber of Commerce president than a realistic review of South Dakota.

Little or nothing was said about the layoffs that are occurring around the state, or about the problem that many who are working are getting some of the lowest wages in the nation. Nothing was said about the fact that some of the nation’s poorest counties lie within our borders. That should be tackled in every State of the State and every legislative session.

Nothing was said about the thousands of South Dakotans who have no health insurance, or who can’t afford the coverage they have.

Nothing was said about how we are going to resolve the challenges we face in applying property taxes in a fair way on our farmers and ranchers. It’s a complicated issue that demands leadership.

The governor did report on the advances with ethanol and wind energy, but he didn’t talk about ways to take these important initiative another step – or how to ensure, in the case of wind energy, that landowners are protected and that communities reap the maximum benefits.

The governor brought up our transportation needs but there were no solutions offered. Good roads are critical to our agricultural community, the tourism community and all who make long commutes to work.

These issues will be brought up by lawmakers, and I trust that we can find bi-partisan solutions. Of course, the over-riding issue will be to find a way to balance the budget without causing further pain and hardships on the people who pay and who collect our states for us. Whenever government revenues are down, you can be sure that people on Main Street and in the country are hurting. We’re all in this together; we don’t want to solve government’s problems by adding to yours.

I look forward to serving you in the 2009 session. Please call, write or email – or catch me when I’m home on weekends. Our best ideas come from friends and neighbors back home. Thanks for trusting me to represent you in Pierre. I will work hard with others to find solutions and made headway on these and other issues.

Darrell


 

Darrell Solberg
 

  Darrell pledges to ...

~ Ensure pre-kindergarten standards are set for the well-being of children and families ... Learn more.

 

 
             
    Paid for by Darrell Solberg for the House, Sandy Gustafson, Treasurer, 6904 West Sagamore Circle, Sioux Falls, SD 57106.