The last couple pages of the Legislative Research Council's 2014 Statistical Comparison offer a summary of the funds appropriated by the South Dakota Legislature every year since statehood. The 1890 Legislature appropriated $438,708 to the general fund. In the coming fiscal year, our general fund has $1.389 billion dollars, 3,166 times the amount of money our founders gave Governor Mellette to spend.

Of course, we have much more than $1.389 billion in government money coursing through our state veins. The general fund makes up just under a third of the total FY2015 state budget of $4.259 billion. 27.8% of that spending comes from other fees and licenses, while 39.6% comes from Uncle Sam.

The 2014 Statistical Comparison starts breaking down the budget by general, other, and federal funds in 1978. South Dakota's total budget that year was $457 million. In FY2015, South Dakota government will spend 9.3 times that amount.

Now let's compare that growth to what's happened in Washington. Crunching numbers from, I find that federal spending in FY1978 was $458 billion. Federal spending in FY2015 is projected to be $3.9 trillion. Over the period that South Dakota's government spending has increased by a factor of 9.3, federal spending has increased by a factor of 8.5.

Or let's compare annual growth. Since 1978, South Dakota's total state budget has grown at an average of 6.3% each year. Over the same period, the federal budget grew at an annual rate of 6.0%. South Dakota's budget grew faster than the federal budget in 25 of those years; federal budget growth outpaced our state budget growth in just 13 of those years.

Governor Dennis Daugaard and his predecessor-cum-Senate candidate Mike Rounds like to talk about how Washington ought to apply South Dakota common sense to its budget. But if South Dakota had matched federal spending patterns, our state budget would be 8.8% less than it is now.


Speaking of smoking dope, Congress appears determined to spend more on military equipment that the military does not want:

The House panel that decides defense spending came out with a $570 billion blueprint Thursday that spares the USS George Washington aircraft carrier....

The spending bill echoes the broad defense policy bill that the House overwhelmingly passed last week that saves ships and aircraft despite pleas from senior military officers for the reductions....

Military leaders have warned that sparing what they consider to be parochial programs will undermine their ability to train soldiers, sailors and airmen to fight. But lawmakers are determined to protect favorite weapons [Donna Cassata, "House Panel Snubs Pentagon on Defense Spending," AP, 2014.05.29].

MSNBC's Steve Benen lists more items where Congressional posing trumps military budget sense:

The Pentagon requested a modest pay raise; Congress went beyond what was requested.

The Pentagon requested a slight increase in out-of-pocket costs for housing and food, in order to help control the cost of benefits; Congress turned down the request.

The Pentagon requested retiring the U-2 spy plane and the A-10 Warthog; Congress funded them anyway.

The Pentagon requested shuttering unnecessary bases; Congress is keeping them open.

Lawmakers, at least on the right, aren’t just throwing unwanted money at the department, they’re also ignoring military leaders on policy matters – the Pentagon wants to close the detention facility at Guantanamo Bay, and Congress doesn’t care [Steve Benen, "Pentagon Asks for Less; Congress Spends More," MSNBC: MaddowBlog, 2014.05.30].

Thank goodness we've saved Senate candidate Jason Ravnsborg's favorite prop.

I thought candidates liked to get hyped up about listening to the military and not making battlefield decisions from political perspectives. But apparently neither the practical advice of the generals nor their own deficit-hawkery can stop Congresspeople seeking re-election from throwing money at the Pentagon.


Cheers to the Mitchell Daily Republic for recognizing that GOP U.S. Senate candidate Marion Michael Rounds is pulling our legs when he pander-shouts that he'll eliminate the federal Department of Education:

HISSES to former governor and current U.S. Senate candidate Mike Rounds for repeating, during his Friday night visit to Mitchell, his earlier call to abolish the U.S. Department of Education. The same day we printed his comments about that, we also printed a separate story revealing that South Dakota is third-most dependent among all states on federal government aid for K-12 education, receiving 16.4 percent of its K-12 budget from the feds. A man who governed a state so dependent on federal education money lacks the credibility to claim the federal government should have no role in K-12 education. Change and improve the Department of Education? Fine. But calls to abolish it strike us as unrealistic political pandering [editorial board, "Hisses and Cheers," Mitchell Daily Republic, 2014.05.25].

Normally Rounds's feigned ignorance of fiscal reality would end on June 3, when he could stop having to recycle old-conservative dog whistles to beat Stace Nelson and focus instead on calling Rick Weiland a liberal. But if Rounds wins the primary, he'll have to keep saying silly things like "Nuke the Department of Education!" to beat back the conservative challenge from Gordon Howie.

And the longer Rounds has to do that, the longer voters will have to see that Rounds is a spineless panderer with no credibility.


Last week we discussed South Dakota's red-state moocherism in the form of its third-place rank for reliance on federal support for its state budget.

In further refutation of Governor Dennis Daugaard's oft-proclaimed commitment to self-reliance (also here, here, and here), NPN finds that we are also third-worst at funding our own education system. According to newly released Census data on public education financing, Uncle Sam provides 16.4% South Dakota's K-12 spending.

Remember, this reliance on Uncle Sam comes in a state where we don't take Medicaid expansion money because we don't trust the federal government to sustain its spending levels.

Only Mississippi and Louisiana get a greater portion of their K-12 budget from the feds. Nationwide, the feds provide 10.0% of K-12 funding.

Alas, the savings from the federal largesse don't trickle down to local school districts; they all accrue to Pierre. Nationally, state and local funding for K-12 education is about an even split, 45.5% to 44.5%. In South Dakota, the state provides 30.5%, while locals provide 53.1%. No state provides less funding as percentage of total K-12 spending than South Dakota.

Here's the data for South Dakota and its neighbors:

K-12 education funding from federal, state, and local sources, 2012
Fed % State % Local %
Iowa 8.5 44.4 47.1
Minnesota 7.0 63.1 29.9
Montana 13.3 47.2 39.5
Nebraska 9.9 31.6 58.5
North Dakota 12.3 50.5 37.3
South Dakota 16.4 30.5 53.1
Wyoming 8.7 51.3 40.0
Source: Mark Dixon, "Public Education Finances: 2012," 2012 Census of Governments, U.S. Census Bureau, May 2014

Our K-12 lean on the federal crutch is not new; it is chronic South Dakota irresponsiblity, reported for years on this blog, from Republican governors and state legislators who subsidize their low-tax promises by taking money hand over fist from an ever-forgiving Uncle Sam and the generous liberals in other states who can't turn their backs on the children we hold hostage.

Hmmm... imagine what would happen if liberal neighbors in Minnesota, Iowa, and Wyoming(!) got tired of giving in to our demands. They might decide to save money by saving the hostages. They're paying for our students' learning anyway; why not just recruit their families to move out and come to Marshall and Minneapolis, Hawarden and Des Moines, Cody and Cheyenne, where they'll find happier, better-paid teachers and lower local school district tax burdens.

We are an independent lot who believe in self-reliance, perseverance, and determination.... South Dakotans are also some of the most compassionate and generous people you will ever meet [Governor Dennis Daugaard, explaining to HHS Secretary Kathleen Sebelius why South Dakota has chosen not to expand Medicaid, letter, 2014.01.30].


Mr. Larson properly hammers Governor Dennis Daugaard for creating the crisis in career and technical education. Larson points to a campaign video by the Governor on the topic, the first sentence of which explains the whole problem:

"South Dakota needs to spend time and effort preparing its young people for the world of work," says Governor Daugaard. Time, effort, but no mention of money... at least not of the money he took away from the schools:

As school districts have struggled with budget constraints, one means that they've used to manage their expenses is to reduce some of the electives that our students have available in high school, and some of these electives unfortunately are career and technical education opportunities, those welding classes, those ag classes, those health ed and engineering classes that give students elective course opportunities that can also be explorations of potential careers. And it costs too much money to have every one of these high schools offer these career opportunities [Dennis Daugaard, campaign video, 2014.05.09].

That's odd: maybe not every one, but a lot more of these high schools offered these career opportunities, programs that local school boards decided were as vital for their students as English, math, science, and history, before the Janklow-Rounds-Daugaard regime applied twenty years of budget pressure to strangle the schools. "It costs too much" is not an objective statement of fact; it is a value judgment in which Bill Janklow, Mike Rounds, and Dennis Daugaard have said, "We don't want to spend what it takes to provide every student with good in-house career and technical education."

But in rides Dennis to the rescue, like the mining companies contaminating the water supply, then rolling in to town with trucks of bottled water:

So it made sense to me that we try to regionalize the offerings and find a high school in every region of the state that could create a very good career and technical education package of classes and offer it not just to that school district but to all surrounding school districts as well.

So just last February the state utilized Future Funds to grant over $8 million in grants to a whole array of school districts around every region of the state to create programs and to reinvigorate programs in electronics, in machining, in the building trades, in the health care industry, in accounting [Daugaard, 2014.05.09].

Let me remind the Governor what is wrong with that statement:

  1. Future Funds: in other words, one-time money. When Democrats ask the Governor to use surpluses (surpli!) from other budget lines to give education a boost, he insists that we can't give schools false hope by handing them one-time money. But when he wants to make up for damage his budget cuts caused, he has no problem taking money from his economic development slush fund and dropping it, one time, on the school districts.
  2. The governors' budget cuts have replaced a first-class vocational education system with a second-class vocational education system. Twelve favored schools get in-house technical education. Students in surrounding school districts get to take those classes, but only if they rearrange their schedule to bus over to those tech-ed centers or take the classes online. In either situation, the remote students get less of an education. It's better than nothing, but if I'm a parent with a practical choice of school districts, I send my child to the school that offers more on-site opportunities.
  3. Governor Daugaard is taking steps to make up for the damage he did to career and technical education, but as Mr. Larson points out, schools have cut much more than vocational classes to survive 20 years of gubernatorial miserliness:

YOU HAVE GOT TO BE KIDDING ME!!!! Those extensive "budget constraints" were caused by his budget! He is the one that has de-invested in education. I am blessed to be in a district that offers great technical/career education programs which include agriculture, wood technical, art programs, health programs; along with some great teachers in foreign languages, math, chemistry, English, and social studies. We made it through the cuts beat up, but thanks to some wonderful administrators and school board members we got through it but had to close an elementary school to do so.

Be honest with the people Governor. You see students as a tool for your business friends, and beyond that you would rather not have to deal with "those" teacher people [Michael Larson, "Daugaard Creates Career and Tech Crisis and Then Campaigns on It," Taking a Left Turn in South Dakota, 2014.05.23].

If Dennis Daugaard really wanted to do education a favor, he wouldn't have waited until re-election year to dole out one-time favors to a handful of lucky school districts for one corporate-favored slice of the curriculum. He'd have put forward the time, effort, and money to fund quality education in all subjects and all schools in 2011.


Governor Dennis Daugaard and other leading South Dakota Republicans do not trust the federal government's ability to sustain funding enough to expand Medicaid.

They do, however, trust the federal government enough to fund 41.5% of state functions:

A report released this week by the Tax Foundation, a non-partisan research think tank based in Washington, D.C., said 41.5 percent of South Dakota's general fund dollars in Fiscal Year 2012 came from federal transfers — the third highest percentage of all states in the country.

In FY 2015, that percentage is slightly lower at 39.6 percent, said Gov. Dennis Daugaard's budget chief, Jason Dilges [Steve Young, "South Dakota Ranks High for Federal Financial Support," that Sioux Falls paper, 2014.05.16].

Pardon me: 39.6%.

Being a large, rural state with a sparse population means depending on federal support is almost unavoidable. But Joy Smolnisky of the South Dakota Budget and Policy Project says we also make choices that increase our dependence on Uncle Sam:

"Don't let the stand-alone fact that we get a higher percentage of federal money than other states do suggest something else," she said. "No, we just collect less from ourselves."

Dilges doesn't disagree. "The policy makers in our state have decided we want to keep taxes lower for our citizens," he said. "As a result, we try to get as much federal participation as we can" [Young, 2014.05.16].

Suppose a woman on the street said, I choose to work fewer hours at McDonald's, so I'm going to apply for more food stamps. We'd take offense, right? We'd shout about the need for responsibility and self-reliance, right?

Well, didn't he Governor's budget chief just say the same thing? We choose to spend less of our own wealth on our needs, so we try to get more federal assistance.

If Republicans are going to keep telling us that government budgets work like family budgets, when will South Dakota Republicans start applying the same kitchen-table responsibility they preach to working folks to our own state budget decisions?


So I'm talking to Joe Lowe, and he says to me, "I'll run government like a business."

I cringe. Oh no! Mayor Huether must have bitten him. Now I'll have to vote for Sue Wismer.

Joe sees the nervous look in my eye. He tells me a story.

When Lowe became the director of South Dakota's new Wildland Fire Division in 2001, he saw a way to turn the state's firefighting equipment and personnel into moneymakers. No, he didn't shake down homeowners near the Grizzly Gulch and Alabaugh fires. Lowe made the state's firefighting resources more available to other states and the feds. Why was this a good idea?

  1. First, the obvious: South Dakota firefighters helped their fellow firefighters across the country put out fires and save lives and property.
  2. Fighting fires out of state during South Dakota's low-fire-risk seasons helped our firefighters keep their skills up. Lowe and any other firefighter will tell you that practice is no substitute for experience. As Chief Lowe sent the crews out to more fires out of state, our guys got more live-fire experience in a wider variety of terrain and conditions. They came back stronger, smarter, better firefighters.
  3. Other states paid us 110% of the cost of our resources. In other words, Lowe improved our firefighters' readiness at zero cost to the state and put another 10% back into the general fund.

For a concrete example, consider the Wildland Fire Division's acquisition of a bulldozer in May 2005. The state authorized Lowe to purchase a used Kubota from a Rapid City company for $80,000. A bulldozer can cut a really big fire line. It's valuable equipment in itself. But under Lowe's management, lending that Kubota out to other states when it wasn't needed here brought another $40,000 back into the state coffers in its first year of service.

Dale Deuter ran that dozer for Lowe. He tells me Lowe created new opportunities for the state's firefighters. Deuter spent 35 days in Amarillo, Texas, in spring 2006 fighting wildfires. Deuter, the dozer, and his swamper went with fourteen other men and four fire engines as an initial attack crew, meaning they were the first responders to newly reported fires. They fought fires in open country, around oil fields, and even, on Easter Sunday, in the Amarillo city limits. Deuter said that experience made him a better firefighter.

Deuter also saw Lowe's expansion of out-state lending helping local volunteer fire departments. Prior to Lowe, out-state lending had included some West River volunteer fire departments. Lowe made a greater effort to engage East River fire departments. These volunteer fire departments improved their readiness just as state firefighters did in fighting out-state fires. But they also shared the profits. The payments from other states for their services helped volunteer departments upgrade their equipment, meaning folks across the state got better fire protection.

And that improved service happened because Joe Lowe thought like a businessman and turned his resources into a profit center.

Of course, unlike Huether, he charged his customers 10%, not 79.9%.

But there you go: Democrat Joe Lowe shows how running government like a business can mean not simply generating a little extra cash but also providing better service.


“[W]e might hope to see the finances of the Union as clear and intelligible as a merchant’s books, so that every member of Congress, and every man of any mind in the Union, should be able to comprehend them, to investigate abuses, and consequently to control them” [Thomas Jefferson to Secretary of the Treasury Albert Gallatin, 1802.04.01].

We're not that great at running elections (how'd your great-idea voting centers do on poll wait times in Sioux Falls yesterday, Secretary Gant?), but South Dakota gets good marks for online budget transparency. The U.S. Public Interest Research Group has scored states on offering online access to government spending data. South Dakota gets a B+, tying with North Carolina in the "Advancing" category, and just missing joining eight "Leading" states. Our only neighbor in the Leading category is Iowa, scoring 90 compared to our 89.5 (so close!). Minnesota and North Dakota both get D's.

South Dakota was among the top ten improvers, boosting its public finance website score from 70 to 89.5 in just one year. The big improvement was adding searchable datat on "Tax Expenditures," the tax revenue that South Dakota could collect under uniform application of existing laws but which it gives up in the form of sales tax exemptions, preferential rates, and other special favors. (The total listed this morning for all tax expenditures: $632,450,622.00. That's enough money to raise our teachers' pay to the highest in the nation and still have $304 million left. Or we could pay the $510 million it would cost to send all 36,000+ plus students in our Regental universities for free.)

Of course, since our EB-5 program went private, I can't find the checks Joop Bollen, Richard Benda, and friends were able to cash under his contract with the state. Open.SD.Gov allows us to follow the money... just not all of it.


We also get special mention for auditing our state checkbook each year. The online checkbook is fun: it allows to discover fun information like the fact that so far in the current fiscal year, the state of South Dakota has paid Lawrence & Schiller, the ad firm founded by state GOP chair Craig Lawrence, $3,039,006.20. It also lets us itemize state payouts to Northern Beef Packers over its unproductive five years for a total of $2,327,815.47. What fun!



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