Rep. Jim Bolin (R-16/Canton) took the House floor last Tuesday and argued against the proposal from "our fine Governor" to create captive insurance companies—i.e., state-run, state-funded pools to insure a variety of state facilities. House Bills 1185, 1186, and 1187 appropriate a total of six million dollars for this purpose. All three passed the House last week with their funding intact, unlike a host of other bills that have limped out of the House with their appropriations dropped to a placeholder buck pending the resolution of economic forecasts and budget priorities.

Rep. Bolin doesn't need to wait; he already has his budget priorities in order. In a stemwinder against HB 1185, the incandescent Cantonian made a brilliant and specific case against funding a state insurance pool over other more pressing fiscal needs. He listed several of the Governor's requests for one-time money that he supports: funding Ross Shaft upgrades at the Lead science facilities, replenishing emergency funds spent in this fiscal year, helping low-income seniors make their tax payments, and recruiting medical students for rural areas. But he said the Governor's captive insurance company doesn't make his cut:

But on this program, I must draw the line. In a year when revenue increases appear to be minimal, and in age of fiscal uncertainty, we're planning to spend four million dollars on a very questionable and unneeded program that we have not deemed necesary for the last 125 years. Now I want to emphasize again, this state has survived the Great Depression of the 1930s, repeated forest fires in the Black Hills, grasshopper plagues, the farm crisis of the 1980s, and the recent Missouri River floods without captive insurance companies.

Furthermore, we're making this financial decision at the same time that we as a state, we're proposing to change our financial responsibilities by pushing the sparsity programs for rural schools, among other items, onto the local taxpayers [Rep. Jim Bolin, remarks on House Bill 1185, South Dakota House, 2015.02.24, timestamp 49:25].

Rep. Bolin refers here to a budget trick the Governor is using to inflate the state's increase in K-12 school funding from 1.5% to 2%. The state is "saving" $2.6 million by making a portion of funding for the sparsity adjustment, technology, and assessment programs to local school districts. Expect to hear more about this issue as the Legislature finally rushes toward discussion and passage of the state budget.

Showing he's not just a naysayer, Rep. Bolin lists a number of other programs that are more worth the six-millio-dollar investment:

People, this is not so much about captive insurance companies or even if I may say emancipated insurance companies so much as about our financial priorities as a state and as an elected Legislature.

There is no need to go down the captive insurance road. The four million dollars mentioned in this bill and the two million in the companion pieces of legislation can be better spent in a wide variety of areas or... in terms of our current financial situation, maybe we should just let it fall to the bottom line.

The choices we might make with this money might include fighting the pine beetle plague in the Black Hills with extra funds, buying down tuition for in-state students in our Regental universities, funding needed programs at tech schools, or helping community support providers who do much for those less fortunate in our state for a pittance. Community support providers face tremendous problems because of high turnover in their workforce because of low wages.

The bottom line is this: that this expenditure of one-time money for this purpose should not be a priority for this Legislature [Bolin, 2015.02.24, 50:23].

Pine beetle, tuition relief, tech schools, social services—those are all areas where various advocates have identified real, current harms that increased funding would immediately ameliorate. Self-insuring state buildings responds to potential, future harms that have not happened; HBs 1185, 1186, and 1187 spend money that does no immediate, tangible good for the state.

Rep. Bolin didn't win the day—the House voted 50–20 for HB 1185 and by bigger margins for the other two bills—probably because he again reminded his fellow Republicans that low wages lead to high turnover and difficulty filling jobs, something legislators don't want to think about as they take no serious steps to address South Dakota's rock-bottom teacher pay and the resultant teacher shortage.

Or maybe Rep. Bolin lost because he cited the Steve Miller Band and his colleagues are all Lynyrd Skynyrd fans. Rep. Bolin crescendoed to this impassioned plea: "In the name of Billy Joe and Bobby Sue, don't let 'em take the money and run, vote red!"

Some Republican legislators challenge the party line by saying outlandish things. Rep. Jim Bolin challenges the Governor with passion, fun, and grown-up budget priorities. I've got to respect that.


The South Dakota Legislature holds deep respect for the committee process... until it gets a chance to disrespect public education.

While the South Dakota House yesterday insisted on respecting the committee process and refused to resurrect House Bill 1223, the Common Core ban, from its committee failure, the South Dakota Senate said Committee, Schmommittee! dragged Senate Bill 189 back from its committee failure and passed it 23–12.

HB 1223 might at least have improved public education by getting Common Core off teachers' backs. SB 189 harms public education and the state budget by diverting tax dollars to private schools. The convoluted mechanics of the bill allow the state to say it's not writing a check to any religious school (which would be a problem): under SB 189, insurance companies give money to non-profits; those non-profits give money to lower-income families; those families give their money to private schools; the state says to the insurers, "How nice!" and knocks up to 90% of the insurers' private school scholarship contributions off their premium and annuity tax.

As educator/blogger Michael Larson says, SB 189 is a voucher sneak attack. He notes that SB 189 hurts public school districts by removing kids from their rosters money from their state funding without proportionately reducing those public schools' costs... which of course is what Governor Dennis Daugaard*, the GOP majority in Pierre, and the Christian crusaders who testified for SB 189 want to see happen.

SB 189 as several additional problems:

  1. SB 189 starts with scholarships for families who make 150% or less of the income threshold for free or reduced lunch the year before they enter the program. But it allows families to keep claiming that credit if their income exceeds that threshold. Consider: my family could easily have qualified for such a credit based on our low grad school/part-time income last year. Now that my wife has full-time professional employment, and if I gain similar full-time employment in the coming school year, we'll be far above that 150% threshold. We'll have no need of financial assistance to send our child to private school, but SB 189 would require the state to keep handing out that subsidy for three years.
  2. SB 189 caps creditable scholarships at four million dollars. "However," reads SB 189, "if in any fiscal year the total amount of tax credits claimed is equal to or greater than ninety percent of the maximum amount of tax credits allowed for that fiscal year, the maximum amount allowed for the following fiscal year shall increase by twenty-five percent." Wow! Pierre never increases school funding by 25% just because the schools claim more expenses. If we applied SB 189's funding mechanism to determining the per-student allocation, public schools could spend just 95% of the per-student allocation and trigger a 25% for the coming year. SB 189 is giving private schools a funding advantage that public schools never get.
  3. If insurance companies and the private schools play their cards right, that 25% growth rate would lead to SB 189 handing out $133 million in its first ten years and $1.24 billion in its next ten years.
  4. The insurance tax is projected to put $83.4 million in state coffers in FY2016. Those receipts have grown 5% over the last two years. Extrapolate that growth rate, and the insurance tax alone could support SB 189's private school subsidy's explosive through FY2034—seventeen years to wreak havoc on public school finance and the state budget.

If you believe in strong public schools, you vote Senate Bill 189 down. If you believe in separation of church an state, you vote this sneaky voucher plan down. If you believe in a sound state budget, you vote this plan down.

*Update 16:24 CST: To be clear, the Daugaard Administration did not testify in favor of SB 189. Other actions by the Daugaard Administration (Exhibit #1: 2012's HB 1234; Exhibit #2, ongoing neglect of K-12 funding...) demonstrate a lack of respect for public education, but last week, the Governor sent the Department of Education and the Department of Labor and Regulation to testify against SB 189. The proper read of that testimony is less likely a desire to defend public education and more likely a desire to oppose blasting a four-million-dollar hole in the budget.


South Dakota ranks 39th for expenditures per K-12 student but 51st for teacher pay.

I have heard Republican legislators respond to questions about teacher pay with that statistical comparison at both crackerbarrels that I have attended this month. Governor Daugaard cited this fact in response to questions about teacher pay during 2014 campaign debates at Dakotafest and the State Fair.

South Dakota Republicans cite these figures because they know they are running out of excuses for valuing South Dakota teachers less than every other state does. Legislators and the Governor offer these numbers to distract us from the state's inaction in the face of the growing teacher shortage, divert blame from the Legislature to local school districts for keeping money from teachers, and excuse the Governor's Blue Ribbon Stalling Tactic.

While the SDGOP's motives for peddling the 39th/51st comparison are nefarious, the question merits some discussion. But the South Dakota Budget and Policy Institute (looking at data that ranks us 41st, not 39th, in per-student spending) spares us another summer study and explains that we outspend a few other states for smaller class sizes:

South Dakota averages 13.7 pupils per teacher. Although South Dakota’s class size is slightly higher than its neighbors, its cost per student for instruction is lower because we have much lower teacher salaries. With a constant class size only OK has lower instructional cost per student than SD

The nine states that have lower instructional costs than South Dakota all have larger classroom sizes, ranging from 14.7 in Texas to 22.8 in Utah.

If the classroom sizes in these nine states were comparable to South Dakota’s classroom size (13.7), the per-student-instructional cost would be higher in every state except Oklahoma [Joy Smolnisky, "Instructional Cost Per Student in South Dakota," South Dakota Budget and Policy Project, 2015.02.06].

Smaller class sizes are worth spending some money. Smaller class sizes are also unavoidable in smaller districts where fluctuations from grade to grade may have the lone fourth-grade teacher working with sixteen kids one year and just eight the next. Check the expenditure-per-student data for South Dakota schools, and you'll see most of the big spenders are smaller districts, while most of the big districts (which can more easily smooth out fluctuating student populations across classrooms) are on the lower end of the expenditure rankings.

Mitchell superintendent Joe Graves was hinting at the class size issue last week when he proposed solving the teacher shortage by getting rid of more public school teachers. If they have to pay teachers more, South Dakota Republicans would love to do it by paying fewer teachers.

K-12 class sizes and per-student expenditures, South Dakota vs. region, South Dakota Budget and Policy Project, 2015.02.06.

K-12 class sizes and per-student expenditures, South Dakota vs. region, South Dakota Budget and Policy Project, 2015.02.06.

South Dakota class sizes are in the middle of the regional range, yet all of our neighbors spend more per student and per teacher. In similar conditions, our neighbors raise more public money for their students and place a higher value on the service their teachers provide.

Over the last decade, states have provided 43% to 49% of funding for K-12 education, with local governments shouldering just a few percentage points less of that burden. In South Dakota, the state picks up closer to 30% of the tab for K-12 education. Maybe local districts have a little more control over capital outlay levies and can at least spend to maintain their facilities, but Pierre is choking off the general fund dollars they need to pay their teachers competitive wages.

SDBPI notes that since 2004, South Dakota has dedicated less of its general fund expenditures to K-12 education. In 2004, the state spent 37% of its general fund on K-12 education. In 2014, the state spent 27% of its general fund on K-12 education.

We do not need a summer study to understand the problem. Our per-student expenditures are inflated by slightly better student-teacher ratios. Smooth that factor out, and our teacher pay is still rock-bottom, due to the state abdicating its commitment to K-12 education. With those facts in our hands, the only reasons for a summer study are delay, distraction, and a desire to drive more teachers out of South Dakota.


House Appropriations felt like spending money yesterday. The committee heard five bills and approved four of them:

  1. House Bill 1147 would spend $1.274 million to increase the merit-based Opportunity Scholarship for university students from $5,000 to $6,500. Governor Dennis Daugaard asked for this bill, and House Appropriations approved it 9–0.
  2. House Bill 1185 would spend $4 million so the state can self-insure its buildings. Governor Daugaard asked for this bill, and House Appropriations said o.k., 8–0.
  3. House Bill 1186 would use some of the $10 million appropriated to the Science and Technology Authority last year to include the Sanford Lab in the former Homestake Mine in the state's captive insurance company plan. The Governor asked for this bill, and House Appropriations complied, 9–0.
  4. House Bill 1187 would spend $2 million to include five state entities in the captive insurance plan. The Governor asked, House Appropriations assented, 9–0.

House Appropriations had to balance all that aye with a little bit of nay. Thank goodness they had House Bill 1199 to kick around. House Bill 1199 would have spent $700,000 to help tribal colleges defray some costs involved in educating non-tribal students. Rep. Shawn Bordeaux (D-26A/Mission) said about 20% of the students (out of a total enrollment that ranges between 700 and 1,000) enrolling at Sinte Gleska, mostly local kids who need to stick around the family farm or have other obligations that keep them from trekking off to some farther-away college, plus some of the Teach for America recruits who take classes to boost their credentials. Georgia Hackett, Sinte Gleska VP for resource development, said her university doesn't turn students away for inability to pay and thus is carrying $939,118 in non-Indian student debt. Marlies White Hat, graduate and employee of Sinte Gleska, told the committee that helping non-tribal students attend tribal colleges helps fight racism. Cheryl Medearis, a teacher education instructor at Sinte Gleska, says her school is vital for producing new teachers to address the workforce shortage in her portion of the state.

HB 1199 had more proponents testify yesterday than any other bill on the House Appropriations agenda. But Governor Daugaard sent Steven Kohler from the Bureau of Finance and Management to say we can't afford to help the tribal colleges and that the state constitution won't allow the Regents to give money to schools they don't oversee, and House Appropriations agreed, voting 6–2 (GOP aye, Dems nay) to kill HB 1199.

Asked at last Saturday's Aberdeen crackerbarrel about funding a tuition freeze for Regental students, Republican legislators said they couldn't commit to dollar figures or priorities until the appropriators had a chance to count all the dollars available. But House appropriators seem to understand South Dakota's budgetary priorities quite well: do what the Governor says, and don't spend money on tribes or education.


I mentioned earlier the three bills that House State Affairs passed yesterday to put more money in legislators' pockets. I'd like to focus for a moment on House Bill 1145 and the stretchy arguments offered by its sponsor, Rep. Brian Gosch (R-32/Rapid City).

HB 1145, which drew no questions and no opposition in committee Wednesday, would give legislators the per diem reimbursement, $123, for attending the Governor's budget report in December and the inauguration of constitutional officers in January. In his testimony before committee, Rep. Gosch said legislators are currently spending their own resources to do their jobs and that reimbursing them for taking off work and traveling to these two events would be appropriate.

I agree that we should pay for legislators' time and expenses when they are doing the people's work as required by law. But Rep. Gosch made a couple of statements that seemed to exaggerate the requirements under which he and his colleagues labor. He opened his remarks by claiming, "I've learned recently that although certain statutes would require legislators to perform certain tasks and do their duties as legislators, they were not being reimbursed for the same." Rep. Gosch cited the budget address as an example of one such obligation, saying "many if not all Legislators make that appearance as required by statute."

Are legislators required by statute to attend the budget address? SDCL 4-7-9 requires the Governor to submit a budget report by the first Tuesday after the first Monday in December. The statute also requires that "copies thereof shall be transmitted to each member of the Legislature." But that statute contains no language requiring legislators to attend. Indeed, legislators have skipped the address with no apparent consequences (well, maybe consequences for the general welfare, but not for the legislators themselves). Legislators can watch the coverage on South Dakota Public Broadcasting. They can read the Governor's budget speech and review the budget documents online. Attendance at the budget address appears to be a choice to participate in political pageantry, not an obligation under state law.

Nor does there appear to be any legal obligation for legislators to attend the inaugural ceremonies on the Saturday before Session begins. Legislators get to take their oath on that same day before hearing the Governor's inaugural address and heading out for balls and booze in Pierre. But statute appears not to set any requirement that legislators take their oath at the inauguration.

SDCL 3-9-7 mentions the inaugural among "political meetings" for which the state shall not reimburse state officers' or employees' travel expenses unless their duties "necessarily require" their presence. Article 3 Section 8 says legislators must take their oath of office "before they enter upon their official duties." They would appear not to have any official duties until the Legislature convenes, per Article 3 Section 7, at noon on the second Tuesday in January. Taking the oath the same day as the Governor may be fun and pompy, but it does not appear to be a statutory mandate.

I'm not trying to rain on anyone's parade. Legislators should be paid more to make running for and serving in the Legislature affordable for a wider array of working citizens.

But House Bill 1145 asks us to spend $12,915 to ensure a full House for a gubernatorial budget speech, then another $12,915 to pay legislators to spend a day hobnobbing and hoedowning in Pierre. At neither event do legislators make laws, hear formal testimony, or perform any duty explicitly demanded by law.

I invite you to review Article 3 of the state constitution and Title 2 of state law governing the Legislature to see if I've missed anything, but I can't find any language supporting Rep. Gosch's claim that he and his colleagues are required to attend either of the events for which HB 1145 seeks per diem reimbursement. Without more detailed legal clarification, the Legislature should kill HB 1145.


Rebuttal of the week to gubernatorial malarkey on K-12 education funding comes from Leola superintendent Brian Heupel, who offers this observation on Governor Dennis Daugaard's persistent shirking of responsibility for South Dakota's perennial barrel-bottom teacher pay:

"The governor always says that the local school boards determine teacher pay," Heupel said. "Well, I look at it, when I was growing up, if my dad gave me 50 cents, I couldn't go to the store and buy something for a dollar" [Patrick Anderson, "Teacher Shortage Stories," that Sioux Falls paper, 2015.01.22].

The teacher shortage is real. Heupel and his colleagues in Flandreau, Alcester-Hudson, Chamberlain, and Estelline aren't making it up. And the amount the Governor is willing to spend on education is directly responsible for our continued sorry state.


Senate Bill 55 is this year's revision of the current budget. As they do each year, legislators will use SB 55 to amend the current budget to reflect changes in revenues and expenses that have since accrued since legislators guessed ten months ago how much it would cost to run the state.

Legislators didn't guess too badly last year. Out of general fund expenditures of $1.392 billion approved last March, Senate Bill 55 cuts just $9.4 million, or 0.67%. Guess your household budget to within 1%, and you're doing pretty well.

Downward revisions in education make up the bulk of the general fund savings. The vo-techs saw 225 fewer students enroll than the budget anticipated, resulting in $749,054 less expense than budgeted. K-12 fall enrollment was 354 students lower than budget, resulting in $1.69 million less in state aid. But the big difference is $6.61 million more in local revenue than the state budget expected. Add in a few other details, keep a little cushion for other unpredictables, and SB 55 takes $7.4 million out of education column of the state general fund.

The Bureau of Finance and Management told the Joint Appropriations Committee last week that revenues came in $10.7 million lower than expected for this fiscal year. However, by cashing out a $16 million Medicaid reserve fund and the ACA-obsoleted risk pool of $2.4 million, plus other adjustments, the FY2015 budget still comes out ahead $14.4 million. In other words, even if all the kids we expected had enrolled in the vo-techs and the public schools, and even if the locals hadn't overperformed on generating school revenue, we'd have still had plenty of money to cover our costs for this fiscal year.

Governor Dennis Daugaard once said he was "committed to the principle of 'first dollar and last dollar' for funding our schools." Well, here we have 14.4 million last dollars. Are we spending them on education?

The dual-credit program, which lets high school kids take college classes for credit toward graduation and toward their college transcripts for cheap is getting $577,500, to pay for many more students wisely participating (taking 5,500 more dual-credit courses than anticipated—good job, kids!). SB 55 sprinkles about $160K around the various campuses, plus 20 new full-time job units at USD. But the big one-time dollars we have at the end of this fiscal year are being directed elsewhere (per page 30 of BFM's January 14 presentation:

Emergency and Disaster Fund (SB 39) $7,994,449
Provider Direct Care Workforce Funding $4,125,000
Captive Insurance for Property and Casualty $4,000,000
Captive Insurance for Authorities $2,000,000
Sanford Underground Lab Ross Shaft Upgrades $3,950,000
SD Conservation Fund for Wildlife Habitat $1,500,000
Jobs For America’s Graduates Start-up Funding $925,000
River Flow Study $500,000
Tax Refunds for Elderly and Disabled $450,000
Rural Healthcare Recruitment Assistance (HB 1060) $381,766
Rural Healthcare Facility Recruitment Assistance (HB1057) $302,500
Total FY2015 Emergency Special Appropriations $26,128,715

Cleaning up disasters, recruiting health care workers, insuring state buildings, studying the Sioux River, giving old folks and the disabled a little tax break—all decent things to do... but none of them directing "last dollars" to improve our public schools.

Senate Bill 55 goes first to Senate Appropriations, which has yet to fix a date for that discussion. Perhaps amidst the recitation of dollar figures, we'll hear one of two legislators ask why we don't see more neat new ideas to boost our schools with those last dollars.


When Bob Mercer calls something a "must-read," I usually believe him. But this time, when he urgently directs us to read Rep. Jacqueline Sly's (R-33/Rapid City) "wise words" on the challenges of funding education, he wastes my time. The House Education chair offers thirty sentences of no useful informational content and one sentence of unsupported blame. Here's the only sentence that matters:

In the past, actions to address the fiscal situation of the district have been delayed by the school board, administration, staff and the community because tough decisions have been derailed by emotional pleas [Rep. Jacqueline Sly, "Many Responsible for Schools' Budget Woes," Raid City Journal, 2015.01.17].

The rest of the essay is a vague meander through admin-speak about leaders proposing plans and irresponsible "public, media and staff" asking questions and attacking the leader instead of getting on board and being part of the solution. Rep. Sly uses no names, gives no examples, does nothing to tie the blame she wants to level on everyone but herself and her Legislative colleagues to any specific leader, any specific plan, any specific funding amounts, or any specific public discussions that have turned into tar-and-feather sessions. Rep. Sly simply fabricates a world that makes her feel better for serving a Governor who sets budget parameters in which the teacher shortage gets worse and school boards struggle to meet their basic needs.

Rep. Sly's vague rhetoric aligns with the standard South Dakota Republican blame deflection in its war on public education. Republicans pretend that 2012's House Bill 1234 was a good plan for education, that we mean and selfish teachers destroyed that plan by referring it to a public vote and never proposed a viable plan of our own, and that the Governor and the Republican Legislature are thus excused from making any further effort to raise teacher salaries and save our public schools. Blame teachers, blame the schools, and let them sink.

Instead of sly insults, I eagerly await real wise words on education from our Legislature this session.


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