Governor Dennis Daugaard is lining up millions of dollars to expand vo-tech scholarships and railroads. He still hasn't announced his willingness to spend a fraction of such money to expand Medicaid.

Alaska's new Independent Governor Bill Walker is not so blind:

...for Walker, it's a no-brainer: Around 40,000 low-income Alaskans would receive health benefits under Medicaid expansion; most of those affected would be childless adults. The federal government would pay 100 percent of the costs until the end of 2016, and after that the state's share would only slowly increase to 10 percent by 2020.

Plus, Walker points out, Alaskans already pay taxes that fund the expansion.

"I always will default back to what is best for Alaskans," he says, "and it's best for Alaskans to have the health care coverage we've already paid for" [Annie Feidt, "Alaska's Governor Eager to Expand Medicaid," NPR, 2014.12.16].

Tennessee's Republican Governor Bill Haslam is at least working with the feds to create a Medicaid expansion alternative:

The plan would provide two private-market choices that would make payments to providers based on outcomes and give participants incentives to take personal responsibility for their health. The goal: to have participants make a transition eventually to commercial health coverage.

The Healthy Incentives Plan would be a redesigned part of the state's Medicaid program. The Volunteer Plan would issue vouchers to be used to offset expenses in the health insurance plans of participants' employers [David Boucher, "Tennessee's GOP Gov to Expand Medicaid Program," USA Today, 2014.12.15].

Alaska's Walker and Tennessee's Haslam join the majority of governors who have figured out that accepting federal dollars to provide more citizens health insurance is a good idea. Governor Daugaard, get off your political high horse and do the right thing.


So that's why Governor Dennis Daugaard didn't include a big workforce initiative in his budget proposal. He's going to do workforce development off budget with Sanford money:

Gov. Dennis Daugaard and T. Denny Sanford will announce a multi-million dollar partnership to address workforce development needs Wednesday in Sioux Falls.

The announcement will be held at Southeast Technical Institute but has statewide reach.

“South Dakota’s strong economy depends on a skilled workforce,” Daugaard said. “Denny Sanford is joining with the state to aggressively address this need.”

The partnership developed in recent months as First Premier CEO Dana Dykhouse and Premier Bankcard CEO Miles Beacom reached out to their founder and philanthropist Sanford to support workforce development [Jodi Schwan, "State, Sanford to Announce Millions for Workforce Development," that Sioux Falls paper, 2014.12.16].

Let's hope the Governor uses Sanford's money for something more productive than the first four years of Daugaardonomics. Let's hope that instead of throwing money away on ineffective recruiter subsidies, the Governor makes some real investments where they are needed most: creating jobs on the reservation, boosting education at all levels, and promoting higher wages for all workers.

Governor Daugaard will provide details tomorrow at 3 p.m.


Maybe Dennis Daugaard is right: getting a liberal arts degree dooms graduates to crappy jobs... in the Daugaard Administration.

A friend of the blog sifted through public records for information about the educational background of various officials in South Dakota state government. The analysis found a dangerously high number of suspicious characters who studied liberal artsy fields instead of good, solid, breadwinning technical subjects like welding. Among these nefarious scholars of the humanities:

First Name Last Name Title Initial Degree Major
Dennis Daugaard Governor Government
Tony Venhuizen Chief of Staff History
Political Science
Kim Malsam-Rysdon Senior Advisor Political Science
Nathan Sanderson Director of Policy & Operations Agriculture Education
Jim Seward General Counsel Political Science
Jim Soyer Legislative Director English Education
Laura Ringling Policy Analyst English
Kelsey Pritchard Assistant Director of Communications Politics
Grace Kessler Director of Constituent Services Politics
Jim Hagen Tourism Political Science
Melody Schopp Education Elementary Education
Doneen Hollingsworth Health Political Science

An English major analyzing policy! Education majors advising (who'd'a thunk that?)! Political scientists, veritable Aristotles, running Health and Tourism! Is that all the opportunity their liberal arts studies could get these poor souls?

Let that be a lesson to all your Girls Staters as you consider your careers in welding.


I have a three-point plan for South Dakota to invest in schools, roads, and natural resources instead of the failed voo-Daugaard-onomics of the last four years. Finding money for teacher pay, road repairs, environmental protection, and parks may sound like a fiscal moonshot, but Bob Mercer notes that Bill Janklow managed a moonshot during his third and fourth terms:

Twenty winters ago, Gov.-elect Bill Janklow pushed forward on his campaign promise to roll back property taxes by 30 percent from their 1994 levels.

Janklow and the Legislature delivered the first $80 million during his first year in office.

They needed the better part of his next seven years in office to find, here and there, the final $40 million [Bob Mercer, "Could We Find $120M a Second Time?" Aberdeen American News, 2014.12.06].

$120 million—funny that Bob would pick a historical figure that just happens to fit with some estimates of the EB-5 money Joop Bollen diverted from state coffers.

Mercer suggests we find our inner Janklow and apply some moonshot thinking to the almost universally recognized problem of low teacher pay. Mercer suggests we start by sending the surpluses from the K-12 state aid budget ($5.9 million last year, $6.9 million this year) straight to teachers as bonus checks instead of redirecting those surpluses to other general fund lines.

Governor Dennis Daugaard found $127 million in cuts when he wanted them (although it turned out he could have satisfied his goal of eliminating the Rounds deficit with just $55 million in cuts). Can he find $120 million to solve problems that his austerity has made worse?

Related: John Tsitrian can find five times the Mercer/Janklow amount in South Dakota's $600 million in sales tax exemptions.


South Dakota is spending less money on Medicaid than expected this fiscal year. Whether this unexpected underspending is related to the record low rate of growth of health care spending under the Obama Administration is open to discussion. Whatever the cause, Governor Dennis Daugaard has proposed amending the FY 2015 budget to reduce Medicaid funding by $2.648 million.

Those lower-than-expected Medicaid expenditures are part of $11.8 million in budget savings Governor Daugaard says we can write into our current budget. Those savings neatly cover the $10.8 million in lower-than-expected state revenues for this year. But the Governor is also proposing $26.1 million in new "emergency" expenditures that will go on the FY 2015 budget. The biggest chunk of that emergency money will come from cashing out a $16-million Medicaid reserve fund that Daugaard created earlier but now says is unnecessary.

Nowhere in Governor Daugaard's emergency expenditures or FY 2016 budget is a proposal to expand Medicaid, which in the coming budget year would cost us $2.1 million, or just an eighth of the Medicaid reserve fund that the Governor is spending on other projects. As the federal cost share drops from 100% to 90%, Medicaid expansion would cost South Dakota $38.6 million a year by 2020, but the billion-plus we'd get from Uncle Sam over a decade of expansion would create 29,500 jobs, boost our economy, and add tens of millions to our tax receipts. (Oh yeah, and we would save lives.)

Governor Dennis Daugaard has over $18 million he could use as a down payment on Medicaid expansion, one of the biggest, easiest health and economic stimulus programs he could enact. Legislators, let's turn the budget ship in that direction.


Governor Dennis Daugaard's budget proposal includes a new Juvenile Justice Reinvestment Initiative. A major part of the plan is to reduce the frequency and length of residential placements of juvenile offenders—i.e., put more kids on probation instead of yanking them from their homes and locking them up.

Why does that sound familiar? I turn back to my interview with then-District 33 Senate candidate Robin Page:

Education reform isn't just about money. Page sees the education of lots of low-income and American Indian youth suffering because of shortcomings in our juvenile corrections system. Juvenile offenders with mental health and addiction issues are often placed in out-of-state residential facilities. Such programs in places like Utah and Georgia cost $250 to $500 per juvenile per day. Stays in such facilities regularly last 12 to 18 months. When young people come back from such programs, they deal with enormous disruption in their schooling. Their friends have moved on. They feel out of place among younger, "normal" students. They often come from homes that lack the resources to pursue GEDs. But without a diploma, they can't get into vo-tech programs and land good jobs.

Page would like to break that cycle. Instead of sending kids and money out of state, Page would like to invest in treatment programs that would keep juveniles, especially Indian juveniles, closer to home and family and maintain some continuity in their education. Such in-state programs would make it easier for families to participate in family therapy and other more holistic approaches to help juvenile offenders get back on the right track [CAH, "District 33 Senate: Robin Page Seeks Balance, Voice for All," Madville Times, 2014.05.24].

Ship fewer kids off to expensive residential facilities, help them stick with their families and keep up with their studies, reduce their chances of offending again—that was Page's thinking, and it's the Governor's thinking.

Alas, with respect to American Indian youth, the Governor's initiative isn't making much of an extra effort. The JJRI includes one recommendation (out of twelve) to "conduct stakeholder outreach" and develop a pilot program for tribal youth. The Governor's recommended FY 2016 budget adjustments direct just $5,000 more to the Department of Tribal Relations for the JJRI, perhaps to supply the study group with coffee and donuts... and, we can hope, to give some officials some gas money to head out to Rapid City and hear more of Robin Page's ideas.


Governor Dennis Daugaard offers a little good news for a minority of South Dakota college students but bad news for all Regental students.

In the small good news, Governor Daugaard is willing to spend $1.274 million to increase the Opportunity Scholarship from $5,000 to $6,500. 1,224 new students got the Opportunity Scholarship last year, bringing the total number of recipients in FY2014 to 3,757. Opportunity Scholars get $1,000 during each of their first three undergraduate years, then $2,000 in their fourth year. Given an average yearly cost of $14,037 at our public universities, the proposed increase raises the value of the Opportunity Scholarship from 8.9.% to 11.6% of the price of a public four-year degree.

Opportunity Scholars make up 8.4% of the students enrolled on Regental campuses. Continuing last year's tuition freeze for all of them would cost $6.8 million. Governor Daugaard says we don't have the money for that relief, and Regents exec Jack Warner says the Regents won't push the Governor for another tuition freeze. Students seeking relief from the costs the state has piled onto their young shoulders, you may be on your own in Pierre. Time for some student organizing!


David Montgomery says Governor Dennis Daugaard proposed a "modest" 2.5% increase in the FY 2016 budget because of a slow state economy:

The cautious increase was spurred by a lukewarm economy. The state's revenue is growing slowly — not enough to pay for massive new spending programs.

Instead, Daugaard offered a collection of minor initiatives... [David Montgomery, "$4.3B Proposed Budget Includes $49M in New Spending," that Sioux Falls paper, 2014.12.02].

Bob Mercer calls Governor Daugaard's economic forecast "gloomy":

Coming out of the recession in 2011 and 2012, South Dakota’s economy looked to be on a solid path of recovery. Now it seems the recovery was short. The state sales-tax growth so far in fiscal 2015 that began July 1 of this year didn’t meet the forecast set by the Legislature when the fiscal 2015 budget for state government was approved. The governor’s recommended budget for fiscal 2016 that starts July 1, 2015, estimates sales-tax revenues will grow 4.1 percent. He said that’s below average. He also mentioned that U.S. job growth on a percentage basis is now outpacing South Dakota [Bob Mercer, "Colder Economy Ahead for South Dakota?" Pure Pierre Politics, 2014.12.04].

Wait a minute. Governor Daugaard keeps telling us that if we focus on economic development, that great influx of businesses and investment and jobs will generate more revenue, which we will then be able to use to pay our teachers more and patch more potholes and bolster more bridges without raising taxes. That's the game we've played for four years, and what does it get us? Lower than expected economic growth? A measly 2% increase in education that barely keeps up with inflation, never mind make real improvements?

We can't blame Obama, can we? The U.S. economy trucked along at 4.6% growth second quarter and 3.9% third quarter. South Dakota's sales tax revenues grew by about the same amount. If Dennis Daugaard's policies are better than Barack Obama's, South Dakota should be outperforming the nation.

Are we supposed to wait for Keystone XL? TransCanada already built one awesome tar sands pipeline across our fair state five years ago. Where is the incredible uptick in public revenue from Keystone 1?

Are we supposed to wait for welfare recipient Bel Brands to ship its billionth baby cheese wheel down I-29? The state already subsidized Valley Queen and Lake Norden Cheese into existence with EB-5 money for dairies and state funds for roads and gubernatorial dairy recruitment. Why aren't we already swimming in milky riches?

The whole governmental justification for Daugaardonomics is to produce more revenue for government. But four years of Dennis Daugaard's business-über-alles policymaking has produced no discernible fiscal benefits.

Dennis, you said this plan would work. It's not working. Why don't we try a different plan?

Why don't we try investing some of our own money up front? Let's decide this session we're tired of waiting for Santa Koch and the Trickle Fairy. We're tired of waiting for some Daddy Subsidy-Bucks to move here and plant money trees outside his feedlot. We're tired of imagining we can solve all of our problems with someone else's money.

Let's decide this session that we're going to make a serious, sustained investment in our schools, our roads, and our natural resources.

  1. We're going to raise every South Dakota teacher's pay by $2,500 next year and keep going until the end of FY 2019, by which time we will have raised South Dakota teacher pay by $10,000. We will pay for it by eliminating tax exemptions for commercial fertilizer, pesticides, and certain lodging or by imposing a corporate income tax as a down payment on maintaining a well-trained workforce, not to mention a citizenry fully equipped for democracy.
  2. We will adopt in full the proposals of Senator Mike Vehle (R-20/Mitchell) and the interim Highway Needs and Financing Committee to invest $144 million in unmet highway maintenance needs. (And when John Thune, Kristi Noem, and Mike Rounds fly back from Washington, we will send the Highway Patrol to detain them at the airport and send them right back to D.C. unless and until they have passed legislation to save the federal Highway Trust Fund.)
  3. We will defund the Future Fund and the entire Governor's Office of Economic Development and reassign every dollar and every FTE to the DENR and the GF&P. Those funds and staff will be used to allow DENR to step up enforcement of existing permits and regulations and to help GF&P keep our parks beautiful and accessible.

Investing immediately in our schools, our roads, and our natural resources isn't any more radical than inserting government into the free market to pick winners and hope they reciprocate with trickle-down economics. Investing in good teachers, solid bridges, clean water, and nice parks can't hurt South Dakota. Plus, such investments in public goods are exactly the kind of work government is supposed to be doing (read your Adam Smith, you commies).

Let's just try it, seriously, for four years. January 2019, we look around and see if South Dakota has gone up in flames. We see if we still have a teacher shortage. We see if Bel Brands and Gehl and Citibank have left (on our really smooth roads and stable bridges). We see if Minnesotans are throwing eggs at our Mall of America booth to protest our clean water and nice parks.

And if we don't like the looks of government prioritizing its proper Adam Smithian role of investing in public goods, we can go right back our centrally planned, crony capitalist Do-Guard-Your-Profits-onomics.

Legislators, who's game? You can make that your agenda now... or I can just save that up for our Democratic gubernatorial candidate's platform in 2018.


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