Governor Dennis Daugaard's State of the State Address can be boiled down to this family anecdote, delivered at the end of his lengthy opening discussion of his first policy priority, fixing South Dakota's roads:

You know, just last week Linda and I welcomed the birth of our fourth grandchild, Greta.

It reminded me of when our first grandchild, Henry was born. Some of you have heard this before. I asked Henry's dad how they planned to distinguish between me and Henry's other grandfather. I thought maybe "grandpa" and "papa." He said, "Well, we are going to call the other grandfather, 'Grandpa Fat.'" "Oh," I said. "What will you call me – 'Grandpa Thin'?" "No," he replied. "We are going to call you 'Grandpa Cheap'" [link added; Governor Dennis Daugaard, State of the State Address, as transcribed by that Sioux Falls paper, 2015.01.13].

[Insert the only editorial comment from legislators during the State of the State Address: hearty laughter.]

I suppose that's about right, but I would really prefer, "Grandpa Frugal." You know me. No one wants to raise taxes less than I do. But as I've said before, there is a difference between being "frugal" and being "cheap." A cheap person refuses to spend money even when it would be wise to do so. A frugal person is careful with money, but understands that sometimes spending in the short term can pay bigger dividends in the long term.

That is today's situation. Maintaining our roads and bridges is one of the most basic functions of government and it is vital – for this year and for decades to come. I don't want to leave this problem to future governors, future legislators, and future generations [Daugaard, 2015.01.13].

A cheap person refuses to spend money even when it would be wise to do so. Raising teacher pay to competitive rates would be wise. Expanding Medicaid would be wise. Promoting renewable energy and efficiency would be wise. But Governor Daugaard refuses to spend money on those policies.

South Dakota, brace yourself for four more years of Grandpa Cheap.

P.S.: Credit where credit is due: the originator of this phrase is the Governor's chief of staff and son-in-law Tony Venhuizen.

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Chuck Clement reports that South Dakota gets a C-minus for K-12 education quality. Education Week remains unimpressed with our public school policies and performance, ranking us 40th in the nation. Our 69.6 on their hundred-point scale isn't much better than the 69.3 we got two years ago.

Clement reports that South Dakota loses big points in school finance:

The state's K-12 system received a D-plus and a rank of 42 in the school finance grading, falling below the average state grade of C.

When the researchers studied K-12 education spending in 2012, they found that South Dakota spent in adjusted per-pupil expenditures $10,740, compared to $11,740 as the national average, giving the state a 31 ranking. However, the center's research also determined that South Dakota only had about 11 percent of its K-12 students in school districts with per-pupil spending at or higher than the national average, making the state's ranking 37 in that category.

South Dakota was ranked 48th in state expenditures on K-12 schooling as a percent of state taxable resources with South Dakota at 2.5 percent and the national average at 3.4 percent [Chuck Clement, "South Dakota's K-12 System Receives C-Minus," Madison Daily Leader, 2015.01.09].

But hey, we're still getting more bang for our buck, right?

The state received a D and a rank of 43 in K-12 achievement, falling below the average state grade of C-minus.

In the area of achievement, South Dakota received its lowest rankings (from 46 to 50) in achievement gains from 4th- and 8th-graders' scores on the National Assessment of Educational Process exams taken from 2003 to 2013. The researchers studied the scale-score changes in the NAEP results. [Clement, 2015.01.09].

Uh oh, Legislature. Sounds like you'd better focus on something other than subjecting teachers to the Pierre Inquisition.

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The Tax Foundation reminds us that South Dakota continues to stay afloat on red-state moocherism. Our conservative one-party state relies on the federal government for a greater percentage of its general revenues than all but three other states:

Federal-Aid-as-a-Percentage-of-State-Revenue_0

(click to embiggen!)

 

South Dakota got 40.8% of its general fund revenues from Uncle Sam in Fiscal Year 2012. Only Tennessee, Louisiana, and Mississippi got bigger portions of their pie from the feds.

When I reported the Tax Foundation's figures on this topic two years ago, South Dakota was at 45.56%. Governor Dennis Daugaard's proposed FY2016 budget brings that federal percentage down to 38.9%. Gee, Pastor Hickey: it looks like Governor Daugaard is already soft-landing us for that Long Economic Winter! (See Rev. Hickey's September 14–20, 2014, podcasts on the topic.)

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Last November, Tony Venhuizen told us that 2014 was Dennis Daugaard's last election. The Governor now confirms that statement, in not so many words, by announcing that he will support raising taxes to fix South Dakota's roads and bridges:

During his 15-minute inaugural address, Daugaard promised more of the frugality that led to eliminating state government’s structural deficit and improved bond ratings during his first term.

During his 15-minute inaugural address, Daugaard promised more of the frugality that led to eliminating state government’s structural deficit and improved bond ratings during his first term.

But he also pledged he wouldn’t be cheap and he will “seize opportunities in the short term where it can lead to savings, or efficiencies, or better government in the long term.”

The first example came immediately after the ceremony. He told news reporters a priority in the legislative session would be raising more money for roads and bridges.

He said too much maintenance was deferred in the past, such as buildings at the state Human Services Center in Yankton.

“We need to confront decisions like that — and make them, right or wrong,” Daugaard said [Bob Mercer, "Dennis Daugaard Begins Second Term as South Dakota's Governor," Aberdeen American News, 2015.01.11].

As he did with the structural deficit four years ago, Governor Daugaard finds himself in a hole dug by his smiling predecessor Marion Michael Rounds, who let roads and bridges crumble while praying at the altar of corporate welfare. Rounds wouldn't support fixing roads, since there was no way to do that without raising big taxes, and he had his eye on running for Senate when he was done in the big chair in Pierre. Evidently with his last election behind him, Daugaard feels he can throw his weight behind some hard, practical investments.

Alas, the Governor's approach shows another problem with one-party rule in Pierre. Bob Mercer reports that instead of backing the comprehensive road funding package created by Senator Mike Vehle (R-20/Mitchell) and his diligent Highway Needs and Financing interim committee, the Governor will demand having things his way:

That means however the interim transportation committee’s road-and-bridge legislation, Senate Bill 1, likely is dead on arrival. It’s a sweeping plan that would raise every conceivable fee and tax affecting motor vehicles that travel state highways in some fashion at some point. Naturally something so broad would have broad opposition. Vehle wanted everybody to be in the boat. Look for a bill from the governor that would be trimmer and that he — Daugaard — could put his clout behind in the first year of his second and final term [Bob Mercer, "Governor Gets Aboard on Road and Bridge Funding," Pure Pierre Politics, 2015.01.11].

Politics aside, the Governor is talking sense:

This is a big change from Gov. Daugaard regarding taxes and fees, but as he took care to explain in roundabout fashion in his inaugural speech Saturday and much more directly in his remarks afterward to reporters, sometimes more money in the short term is needed to save money in the long run. That perspective is consistent with much of what he did in his first term and is proposing in other areas of his latest budget proposal [Mercer, "Governor Gets Aboard...," 2015.01.11].

Invest now, save later—why is that clear only to politicians who aren't running for re-election?

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When incoming Secretary of State Shantel Krebs announced she was hiring Brown County GOP chairman Jason Williams to serve as her public information officer, I wondered if she was expanding government to make room for what looked like a little partisan patronage.

Secretary Krebs tells this blog there's no government expansion going on under her watch. Secretary Krebs says that, while she is still bound by law to operate under her predecessor Jason Gant's budget until the end of the fiscal year on June 30, she's already making the office run leaner. Gant's budget included 15.6 full-time equivalents (FTEs). Right now, Secretary Krebs is holding down the fort with 13.5 FTEs. That's not just a temporary lag in bringing new people on board; Secretary Krebs says that's plenty. The Secretary's office has not prepared a budget proposal yet (they have petition reform legislation to write up for tomorrow's pre-filing deadline—stay tuned for a post on that topic over the weekend!), but Secretary Krebs says that instead of continuing the 15.6 FTE allocation found in Governor Daugaard's FY 2016 proposal, she may knock another half FTE off her current staff and budget 13.0 FTE.

Multiple Krebs staff members are thus picking up duties that were spread among others in the Gant office. Secretary Krebs says PIO Williams is no exception. In addition to getting the word out about SOS activities to the public, Williams will handle special projects, like Secretary Krebs's initiative to increase voter turnout. Secretary Krebs says Williams is already studying turnout data, breaking it down by age group, and thinking about which voters to target and how. Expect PIO Williams to be getting out to schools, talking with voters, and looking for answers to our dwindling turnout.

In addition, Williams will track legislation for the Secretary of State's office. He'll be following the progress of the reforms proposed by the Board of Elections. He'll also keep an eye out for new bills from legislators and researching their impact on the office. He'll report on those bills to the boss, the Secretary herself, who will then speak to legislators in committee and in the lobby, as necessary, to protect the interests of fair elections and other functions of the Secretary of State.

Secretary Krebs says Williams and the rest of her staff are putting in overtime and delivering "exceptional" customer service. The Secretary herself seems to be setting the pace. Consider that, in response to a media inquiry from this blog, the Secretary herself texted me at 6:25 a.m. today. She had meetings all day, but she arranged to visit with me on the phone at 6:30 p.m. She said she had 10 minutes; she gave me 19.

I did not keep track of the multiple times I left messages for Secretary Gant and never heard back from him. But so far, Secretary Krebs is batting 1.000 on fielding media requests from the Madville Times. Perhaps the state's chief election officer has bigger fish to fry than speaking to some blogger, but I find my first interaction with the new election chief... satisfactory.

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That darned liberal Jerry Brown took away one of Dennis Daugaard's talking points when he erased California's budget deficit two years ago. What's California's governor up to now? Just like Governor Daugaard, Governor Brown has a balanced budget. Like Daugaard, Brown is urging restraint. But here's what "restraint" looks like in Jerry Brown's California:

  • A 39% increase in state aid to education over four years. (Governor Daugaard's proposed $414 million in state aid to K-12 schools is 22.4% more than his FY2012 budget.. but remember, that was the austerity budget. Compared to five years ago, Daugaard's FY2016 budget increases state aid to education by 9.9%.)
  • A new Local Control Funding Formula that directs more money to districts with more "students from foster care, low-income families and non-English-speaking parents" to address the primary factor affecting academic achievement, economic disparities. (Governor Daugaard continues to fund schools on flat headcount, only adjusting for sparsity/economies of scale.)
  • A successful cap-and-trade carbon market that is helping California meet its goal of getting one third of its electricity from renewable sources by 2020.
  • New policy goals of increasing renewable energy to 50% and reducing vehicle petroleum use by 50%.
  • A new focus on producing distributed energy and creating more resilient micro-grids to power towns when regional power systems go down (hey, Steve Hickey! How about including micro-grids in your "Long Economic Winter" planning?).

Governor Jerry Brown laid out big stuff in his fourth inaugural address, visionary stuff. Maybe Governor Daugaard will surprise us with his second inaugural address this weekend or his State of the State Address to open the 2015 Legislature on Tuesday. But so far, Daugaard has given us a care-taking vanilla budget. His biggest initiatives of the past month have continued the state's shouldering the costs of business without advancing any substantively new vision for solving South Dakota's problems.

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In my summary of Senate Bill 1, the big road-fixing, fuel-taxing bill, I mentioned that the bill exempts aviation fuel from a new 3% wholesale tax. Incurable snark that I am (maybe SAB Biotherapeutics can engineer a shot for that), I mentioned Mike Rounds and linked the fact that he's a frequent user of aviation fuel.

But a report on NPR this morning chides me for even thinking that our Legislature would shape policy around a favor for our former Governor and now Senator. It turns out the Federal Aviation Administration has clarified a fuel tax rule, declaring that states and municipalities can spend aviation fuel taxes only on airport and aviation-related projects. Since Senate Bill 1's intent is to "finance improvements on the public highways and bridges," an increase in aviation fuel taxes, which can only be used to finance improvements in airports and runways, would be non-germane... and the South Dakota Legislature sure as heck isn't going to have any non-germaneness in its bills (right, LRC?).

The question now: will this rule clarification affect the money available for South Dakota road and bridge projects?

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South Dakota lawyers got a raise from the state on January 1, just like our minimum wage workers. The state just raised the hourly rate for public defenders from $87 to $90. This order from Second Circuit Judge Larry Long explains the recent history of public defender pay:

Hourly rates for court appointed counsel are reviewed for adjustment each fall for the subsequent calendar year. Rate adjustments usually correspond to the annual across-the-board adjustments, if any, made to state employee salaries determined by the Legislature each year. That annual increase was 3% in 2007 and 3% in 2008. No increase was granted in 2009, 2010, or 2011, or 2012 and the hourly rate remained $82 for that period. For calendar year 2013 the hourly rate was $84, rising to $87 in 2014 [Judge Lawrence Long, "Rules for Compensation of Court Appointed Counsel in the Second Judicial Circuit of South Dakota," effective January 1, 2015].

The state Supreme Court makes the call, but it generally follows the pay parameters set by the Legislature for other folks working for the state. And this year, following the Legislature imposes a 3.45% cost increase on the counties who must pay for legal counsel for indigent citizens. An eager reader reminds me that SDCL 10-13-35 caps the amount by which counties may increase their property tax levies by no more than 3% or the rate of inflation, whichever is less. For 2015, the county levy increase is capped at 1.4%.

The state is thus imposing costs increases on counties that the counties cannot cover without either cutting other budget items or opting out of the tax levy caps. Kinds takes the "optional" out of "opt out," don't you think?

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