The Aberdeen American News reports on a community meeting Thursday night where district officials laid out plans for dealing with the impending budget cuts from Pierre. I hear from someone who was there that 150 people were in attendance (when's the last time you saw that many people come to talk about a school budget four months out from passage?). When asked to stand to indicate whether they would support a one-cent sales tax to fund education and avoid such cuts, everyone in the room stood up... except for Senator Al Novstrup (R-3/Aberdeen). Novstrup said he support balancing the budget and will probably vote for the governor's plan.
Now it's one thing for a legislator to look a roomful of people in the eye and say, "You're wrong, that's bad policy, and I can't support it." But that's not what I'm hearing from legislators like Senate Majority Leader Russell Olson (R-8/Wentworth). Senator Olson apparently still believes that he can't vote for a tax increase because none of his constituents want a tax increase. That's not an evaluation of the policy; that's a mistaken evaluation of the political implications of voting for the policy. In the echo-chamber minds of too mnay legislators, it is apparently better to put a bunch of those good-for-nothing teachers out of work than to risk an imaginary backlash from an electorate that they think all attends Tea Parties. (Reminder: the only objective data we have says 73% of voters who think of the Tea "Party" as a good thing also support a sales tax increase for education.)
Of course, I might be coddling my own soothing worldview by telling myself that our Republican legislators lack the intellect and courage to overcome their campaign slogans and support the tax increase people want. Perhaps there is a simpler explanation than widespread stupidity and disconnection from reality for our legislators' intransigence. Perhaps our legislators' bullheadedness comes from another source: that second-floor office in the Capitol.
Governor Dennis Daugaard has laid out the budget plan. 10% cuts, no new taxes. Permanent diversion of money from the general fund to corporate handouts. Maybe an occasional extension of existing taxes. But no, no, no extra sales tax, even if the people want it. Those are the governor's orders, even if those cuts kill three times as many jobs as the tax increase.
And almost every Republican legislator is saying, "Yes, sir!"
Ha! And you thought your legislator worked for you. No, no, no. Governor Daugaard is the alpha male, and his barking dogs know it.
I'd vote "no" on a sales tax increase if I had a chance in the legislature and/or if it went to a vote. So would many others. Though they aren't making headlines, we are hearing from many in our districts who say hold the line, cuts come before increases in revenue otherwise no department would have any motivation to find efficiencies. I'm listening to people who want cuts as well as people who want to solve the problem in the short-term by raising taxes. But I've stopped talking about this as a "one cent sales tax."
Cory, I've read your blog long enough to know you are watching the pennies. This is not about pennies. The one cent sales tax is a $160 million dollar tax increase on South Dakota which amounts to $197 per capita (70% of which is in-state). For my family that means $137.90 times five which is $689.50 a year. We've been hearing how even $2 more tax each week for groceries is an unbearable burden on some families right now. $689 is quite a hit in this economy. People hear "one cent" increase and think it's an easy fix. Fewer people would be talking about tax increases if they knew what it adds up to for their household.
There is a growing segment of people contacting us who are mad that our school superintendent here makes double what the governor makes and yet refuses to makes cuts. Every day I get an email reminding me we may be 50th in teacher pay but we are 20th in administrator pay. Teacher pay is too low, so is clergy pay, police officer pay, etc, etc. I got an email saying-- don't you dare give state employees a raise when a bunch of us in jobs with far less security and benefits haven't had a raise in five years.
I support cuts, though I'm working/wanting and hoping they can be minimized (ESPECIALLY TO CERTAIN MEDICAID PROVIDERS who serve our elderly and disabled children). I support cuts not because I'm saying "Yes Sir" to the Governor. I support cuts because cuts must precede revenue increases in responsible fiscal policy. In your household, if things get tight you first cut back spending where possible, THEN you get the second job.
Are you going to wait until the very last day of the legislative session to pass a budget?
YES or NO
$689, huh? I'm a teacher and a 10% cut will mean $3,850 less for me. I'd take $689 any day. Gov Daugaard claims we must all sacrifice. The only way to do that fairly is a one penny sales tax.
I'm with Shelly, Rep. Hickey. The data agree with her kitchen-table calculation that a temporary sales tax increase will do less economic damage than a comparable state budget cut. Or have the governor's advisors provided a counter-analysis of the economics behind the 10% cut?
A friend in Brooking was talking to her legislators and they said that they hadn't heard anything but support for the cuts to education and no support for a tax increase. She's pretty sure that they have selective listening as she and many of her friends in health care and the PTA have been pretty vocal.
Maybe it's time to turn the volume up on the hearing aids of the legislature.
Michael - the process started the first day of session as the appropriations committee has met for 4 hours each morning tediously working through department by department. The last week all that comes together and so the answer, technically, is yes we will use the entire session to sort this out and we are required by the constitution to have a balanced budget on the last day of session.
Shelly - even if it ends up being a 10% reduction in the state portion of how your school is funded that doesn't mean a 10% cut to every teacher. If the districts did an across the board cut for teachers first, as a public school parent, I'll rise up and make some noise. It's disappointing to me we aren't hearing reasonable and practical cuts being suggested as districts look at where to cut. Instead we have teachers getting the impression this means they are facing a 10% salary decrease. That is not the case.
Rev. Hickey, you end with telling Michael "that is not the case" Then what is the case? You seem to only care about making the cuts happen to balance a Republican created deficit and the consequences of those cuts seem to be secondary to you and the rest of the legislature.
Maybe you can share some of the consequences, both intended and unintended, that your cuts will have on kids, teachers, the elderly, small town docs, at risk youth, the impoverished etc. I ask because that doesn't seem to be part of the discussion coming out of Pierre.
The governor and legislators keep saying that 'everyone' will have to sacrifice...guess we must have a different definition of what 'everyone' means.
Ahhhh, the perils of dealing with simple mathematical averages. For a family of five to pay $689.50 more in sales tax from a tax increase from 4% to 5% they would have had to purchased $68,950 worth of sales taxable goods or services. Many SD families don't even make that much money. Additionally there are many things that are not subject to sales tax. We pay no sales tax on motor vehicle fuels, rent, mortgage payments, property tax payments, federal tax payments or any money we happen to save. I'm sure the list goes on. My point is you can't talk about average per capita amounts, the medium amount would be more useful. More difficult to arrive at, but more useful.
...and the teachers and professors who get laid off (because when you're talking $552K off Madison Central's budget, and when salaries make up such a huge portion of the budget, cutting jobs is the only reasonable and practical alternative to raising taxes) won't be around to pay any sales tax, because they will move somewhere else where jobs are available.
Cory-
Oh come on... do you think that that audience is representative of South Dakota, and not just a little biased? That audience was made up of people who have a vested interest in the education system, and would of course be willing to see sales taxes go up. Talk to others though, people who don't have children in the education system for instance (and even people who do), and I would guess that they probably would not want sales taxes to go up. Raising these taxes is not a cut and dried issue...
TC, is this a little like the legislators getting their information from Rotary Clubs, Lincoln Day dinners and Chamber meetings?
Better question is who doesn't have a vested interest in education?
So I have assurance from you that the budget will be resolved on March 11th and not March 28th, the 41st day.
Schools need to be able to plan sooner rather than later.
I would be in favor of amending the constitution to force a change to a multi-year budget plan so we do not need to panic every time the legislature is in session.
Russ Olsen got like 80% of the vote in 2010 so I think he has to lose a lot of support before the wheels fall off on his reelection campaign.
I heard a rumor he was being pursued by the SD GOP for the PUC seat against Kolbeck. Not a good move if he wants to run for Governor some day but whatever...
Jana said the budget problems are the result of a "Republican created deficit." BS. Why is Medicaid being drive up sharply? Who wouldn't let a small change be made to SS when Bush wanted part of the funds invested privately? Who has pushed the fed economy and thus the state's further into the red? Who has refused to allow oil drilling in our own waters and ANWR that would lessen our dependence on foreign oil and price gouging? Answer to all the above is the Dems. Get real!
I have one question asked in this context:
A) Because the corresponding local "match" will not be reduced, the effective total impact on the local schools is under 6%.
B) Everyone wants to raise taxes so this doesn't "hurt children" (which is another discussion for another day.
My question: Why are the local superintendents/education status quo advocates not asking for a local property tax increase?
Anybody, including state legislators, who assume that 10% funding cuts to education and medicaid WILL NOT affect the long term viablility of those programs has not taken their reality pill yet in 2011. To assume that school districts have wasted 10% all these years or that health care facilities are running on the fat is a terrible insult not only to students and clients but also to hard working dedicated employees in those institutions
Troy- Don't your kids (grand kids) go to private school? Cuts to Education will not affect them?
Rep. Hickey,
I do appreciate the fact that you will discuss the issues on the blog sites. That is much more than my Sen. Olson or Rep. Stricherz will do, as I have emailed them and gotten no response. Rep. Fargen replies, Gov. Daaugard replies, but the folks here locally will not. This is disappointing to me. I am going to send another email today, I have not given up.
Anyway, I wish to comment on a few of the things you stated earlier this morning. First, to your comment about the email you received that was concerned about state employees getting raises: I do not think that has ever been discussed. I am working for the same, albeit, good wage for the third consecutive year. All state employees are working for the same wage they were 3 years ago. So I think we need some education on what the economic conditions have been for state employees for at least the last 3 years. I will whole-heartedly agree about security, I left the private sector in 1998 and joined the public sector. I worked in the private sector from 1973 – 1998, and went through many economic ups and downs, yep, I have been laid off, yep, I have been RIF’ed and I know what it is like to go home and tell your wife that the pay check in your hand is the last one. It is not a good feeling. It is unfortunate, but what the Governor and those of you that follow him have prescribed is turning South Dakotan against South Dakotan and those bruises will heal very slowly.
Secondly, you mention cuts through efficiencies. What does this mean? Give me some suggestions? I hear this but frankly it appears to be more political rhetoric than sound economic planning. If you want efficiencies then you must provide potential solutions. Unfortunately I have not seen any such ideas or brain storming sessions. When I hear the talk about efficiencies, then I am expecting to get suggestions. But alas, none are finding their way to the discussion table. Even when I received a letter from the Governor in response to my email that asked for a 1% sales tax increase (short term) and to follow it up with long range planning about the institution of a state income tax to substitute for all the sales tax collected, I received nothing in the way of ideas of efficiencies that would drive budget cuts. I am left with one thought, and that is that efficiencies will be derived by less employees and actually increasing the inefficiencies of governmental departments. I know you do not agree, so cite me some examples, I am a researcher; I know that citations are important.
Lastly, this comment comes from your reply to Shelly. You commented: “…even if it ends up being a 10% reduction in the state portion of how your school is funded that doesn’t mean a 10% cut to every teacher.†Once again, this is where the proponents of the cuts could help their cause by educating the people. Because on both sides of the issue, people think that a 10% cut is what it sounds like, a 10% cut. So educate the people on both sides of the issue.
Once again, I do appreciate the fact that you are willing to make yourself available via these blogs and that you are willing to discuss them. We do not share a great deal in ideology, but through an open discussion at least we can reach a point where it is just a difference in opinion.
One of the teachers I talked to last week wasn't worried about getting a raise. She was just hoping to keep the job she already had.
Indeed, Michael: somewhat akin to the relief I'd feel if a mugger quit beating me with a lead pipe and simply ran away with my wallet.
Oh No...that is not supposed to happen, it is supposed to be the fairest way to balance the budget (wink..wink...)
Troy -- most school districts are charging the maximum allowable tax levy and would have to pass a resolution to seek more local taxes. Those resolutions are typically taken to a vote. In Madison's case the resolution took three attempts to pass successfully.
Rep. Hickey -- if there were any efficiencies to be gotten by local school districts, higher education, and providers affected by these cuts to Medicaid funding, it's already been achieved by limited funding in recent years. Any cuts that could provide savings or efficiencies have already been made. I don't think there are many places left to cut except for personnel, which, in my opinion only makes the economic situation worse, not better.
Troy, stay tuned: local supers will be asking for those opt-outs. But if you think the solutionis for all of the school districts to ask their constituents for more money, why not just cut out the middle man and have the Legislature ask everyone for that extra penny?
Rep. Hickey, I haven't saved receipts, but I'm guessing my humble family probably spent $15K on sales-taxable stuff in South Dakota last year. That's $150 more we'll have to chip in on SB 174. Assurant just hosed us with a 23% health insurance premium increase, but we'll find a way to make it work (could be second job time!). Fund my school: raise my taxes.
Just risked my life again on this drive back to Pierre,, but I made it. Not fun.
Wayne - it's not the job of the legislature to find efficiencies in school district budgets. But from the emails I'm getting a list could be developed - folks who support the cuts mention first the salaries of administrators ,, also the number of coaches and amount spent on sports, etc get a few mentions. People mention the plush school buildings we have in Sioux Falls and on and on. Do you really believe every dollar the districts spend is spent on mission critical stuff? When times get tough, can we still offer everything we've offered when times were good?
I'll be honest and speak about my changing view on this from being the husband of an underpaid Sioux Falls teacher and also parent (3 kids went through SF Public schools) and now as a new legislator. I can appreciate the sentiments of those who think a 6% cut to SD education funding is like asking a skinny man to go on a diet. But I get here and look at the fact that in times of plenty we gave education more - $114 million more beyond the statutory requirement since FY2003. We are spending 114% more on education in SD than we were in 1995. (Yet, 201% more on medicaid).
At a cracker barrel meeting on Saturday I mentioned that a freight train is coming - 58,000 NEW SD medicaid recipients eligible under Obamacare, 2014. You think we have a shortfall now - buckle up. The reason we have a shortfall now isn't because the Governor is a meany, it's because the meteoric rise in mandatory medicaid spending (and entitlements) is quickly gobbling up the other half of the budget pie (47% of the budget is for education - - BTW, can something that gets 47% of the budget really be deemed a low priority??). I'm going to start talking about entitlement reform every chance I get - the course we are on is unsustainable - it will bankrupt the states.
My point in all of the above isn't to tell the school districts where to cut, it was to say this one cent sales tax may sound like nothing but if it was nothing, it would not be a solution anyone is proposing. The reason it is being proposed as a solution is because it does amount to a substantial tax increase, smack dab in the middle of a non-recovering economy - a $160 million dollar tax increase. My point was to underscore the responsible sequence... cuts first, then revenue increases.
Hard times in America are great times for Americans. I look forward to seeing South Dakotan communities step up the plate and take care of themselves. Thank God for someone like Denny Sanford to donate $600,000 for a new scoreboard for Howard Wood field/Sioux Falls School District in Sioux Falls. But maybe we can encourage he and other business and community leaders to get behind the valuable programs in schools that the government can't fund anymore, instead of a scoreboard (ten bucks says the name Sanford will be bigger than the score on that scoreboard). These are days when everyone sacrifices and everyone pitches in - churches, businesses, etc. Government can't and shouldn't be the first place people go for help. Government should be the last place.
I am happy to communicate with whomever via these types of venues. Some think I'm not wise to do so and that I will learn the hard way.
Funny that none of the good Republicans have looked to see how great leaders of the past have dealt with structural deficits and how their stature has grown with time. Of course, I'm referring to Ronald Reagan and the first of his 13 tax increases.
Reverend Hickey. You refer to the new healthcare legislation out of Washington as Obamacare. Do you know that the actual name of that legislation is the Patient Protection and Affordable Care Act? Or did you know that and then just use the Obamacare term as kind of code word...
Of course it could just be that you want to apply a name that make legislation stick to those who championed the bill.
So from now on it is the Republican deficit and when property taxes go up in your district it will from now on be known as the Hickey tax increase. Heck that will work for every district. When a town can't get a doc to serve the elderly we'll call it the Republican doc lockout. When an at risk kid can't get the help they need we could call that the Republican reply.
I'm sure that there are a lot better ideas out there on what we could name these measures that you and your fellow legislators are advocating.
Gosh pastor, thanks for the idea.
80% of most school budgets goes toward salaries. The balance toward suppies, utilities, insurance, etc. Do we see those operating expenses in that 20% going down enough to stave off reducing salaries or eliminating positions in the 80%. The real honesty is that we will have 10% less instructors or 10% reduction in salary levels or a combination of the two. Any other alternative will require a property tax opt out(CODE WORD-TAX INCREASE). What we need is education funding reform not more property tax increases. By the way, how can we justify the REDI fund legislation when education and medicaid is to be cut? Did those dollars just appear on a Christmas tree? If we can support a "fat cat" fund, we can certainly do better by education.
You would think that the feds would cover some of the increased costs with more medicaid recipients. The whole plan may not pass the constitutional test in the Supreme Court. What I think you are saying that we should prepare for much deeper cuts in a year or two for education. How drastic do you think those cuts will be? 10% 20% or more?