Chuck Clement reads the USDA's latest report on Farms and Land in Farms and finds South Dakota lost 300 farms last year. That's a return to the long-term trend that South Dakota was briefly bucking: fewer farms, bigger operations.

37 states lost farms. 10 states held steady. Delaware, Nevada, and Wyoming added farms.

If we heard that South Dakota had lost 300 manufacturers, or 300 car dealers, or 300 construction contractors, we might hear some alarm. But hey, South Dakota has the same amount of land (43.3 million acres) in farms, 3% more cattle on feed, 4% more hogs and pigs, and more farms in the million-plus-value class. More machines, fewer Democrats—as long as the GDP numbers look good, what's there to fret about?

By the way, hired farm hands in the Northern Plains region (South Dakota, North Dakota, Nebraska, and Iowa) earn 17% more than the national average and 17% more than neighbors in the Lake Region (Minnesota, Wisconsin, Michigan). We can pay hired hands more than the national average, but not teachers.


Perry Groten asked Senator Dan Lederman on last night's Inside KELOLand to discuss the significance of the transportation bills before the South Dakota Legislature.

The flauntingly conservative Republican PACker from Dakota Dunes proceeded to destroy every anti-tax, anti-stimulus argument ever:

This is the first time in sixteen years that we've addressed transportation funding, so it's a conversation that's been long in the running, that we need to have. It's a tough decision, because when you're talking about increasing taxes, people's pocketbooks are going to be affected and it's a very serious discussion.

But it also has some good upsides, because we're looking at being able to improve those roads. Even though the tax dollars come out of the economy, they do go back in when we start talking about the contractors, the materials, and the work that will be done over the next few years.

So it's actually a pretty big impact for the economy, and it's a great impact for our farms and for our businesses that need to use those infrastructures to be able to get their product to market [Senator Dan Lederman, Inside KELOLand, 2015.02.15, timestamp 8:30].

Translation: taxes don't make money disappear from the economy. They go right back into the economy to buy things, boost the economy, and invest in the public goods the free market needs to survive.

Barack Obama, Robert Reich, and I couldn't have said it better ourselves. Thanks, Dan! We'll keep that lucid defense of the upsides of increasing taxes for public investment handy for the next time Grover Norquist comes peddling his pledge.


Rep. Steve Hickey brings us the Statesman-Prepper bill of 2015. House Bill 1086 would create the Economic Contingencies Work Group to study how the state would respond to what Rep. Hickey has called the "Long Economic Winter." Gently revising a summer-study proposal he pitched last year, Rep. Hickey asks the state to consider how it would confront an extended national economic crisis severe enough to cripple the federal government, disrupt the food and energy distribution networks, and drive us to local self-sufficiency and bartering.

Appropriately, the work group would have thirteen members.

The bill doesn't mention plague or war (O, Jericho, sweet Jericho!), but you know the millennialists who were disappointed at the Y2K non-event are thinking what fun it will be to write the discussion of any of the Four Horsemen onto the Legislature's agenda. I'll admit, the discussion could be a profound exercise in political and economic science. How well could South Dakota survive on its own? Would we be willing to nationalize (wait: what is the word for when a state government takes over private property and economic activity? state-alize?) farm land and farm equipment to ensure that enough beef, grain, and vegetables are grown to feed every citizen? Would we order our Guard troops to raid North Dakota and Wyoming for oil and coal, or would we take a safer defensive posture, convert all of our vehicles to run on electricity and ethanol, commandeer the dams on the Missouri River, and draft engineers and linemen to reconfigure the grid to provide electricity to sustain our state?

Thirteen Legislators of the Apocalypse could have a riotous summer thinking up disaster scenarios and plans for maintaining law, order, and tolerably good wine in the worst of times. Heck, I support governmental action to prepare for asteroid collisions (whew! survived another one—wait, two, Skipper and Little Buddy, Monday night!), and the last five thousand years have brought us more collapses of economies and empires than asteroid collisions. So go ahead, South Dakota Legislature, let's spend the summer talking about Rep. Hickey's Long Economic Winter... and amend the bill to include fewer legislators and more writers, futurists, and other creative types who can really probe the possibilities!

Related Reading: Maybe reading some alternative history would be useful bedtime reading for students of the Long Economic Winter. 1983: Doomsday is an alternate-history wiki-narrative created by multiple users imagining world history spun off from a nuclear war in 1983. In that timeline, the Lakota take West River; East River unites with the eastern part of North Dakota to form one state and moves the capital to Aberdeen.


In his post-speech press conference yesterday, Governor Dennis Daugaard responded to the criticism he knew was coming that his proposed tax and fee increases for road repairs violate his 2010 election promise not to raise taxes. In responding to this criticism, Governor Daugaard reveals his confidence that the nation has fully emerged from the recession and will not go double-dip:

I'm not unwilling to ask for increases in revenue where I feel the need is genuine and concrete. IN the case of the state highway system, I was unwilling to support a tax incrase the first term because, when I ran for re-election [sic] we were still wondering whether or not we would recover from the recession, and even though there were some indications that we were starting to emerge, there was also some concern about a double-dip recession. There was certainly not a strong rebound in the economy, so when I ran I promised to oppose tax increases. The worst time to raise taxes is when you are trying to recover from a recession. And I kept my promise. But when I ran for re-election this time I made it plain that one of the concerns I had was about funding adequacy for our roads and that everything was on the table, including taxes. So anybody that was paying attention to this issue should ahve been well aware that I was looking at taxes as a potential part of the solution [Governor Dennis Daugaard, press conference, recorded and posted by Todd Epp, Northern Plains News, 2015.01.13].

The need is concrete... oh, the subtle wit!

Governor Daugaard is thus affirming the success of the Obama recovery. Looks like Rep. Steve Hickey's Cassandrafication about a Long Economic Winter will get no traction on the Second Floor....

Now if the Governor can believe the recovery is here to stay, what can we do get him to believe that the federal money to expand Medicaid is here to stay, too?


The Washington Post editorial board says opponents and supporters of the Keystone XL pipeline are all exaggerating:

Despite what you might have heard, the pipeline wouldn’t kill the planet, nor would it supercharge the economy. You don’t have to take our word for either assertion: The State Department has said so; nonpartisan energy experts have said so; The Post’s Fact Checker has said so. Keystone XL should have been treated like a routine infrastructure project from the beginning of the permitting process — six years ago. Instead, the issue has been blown far out of proportion ["Return the Keystone XL Issue to Reality," Washington Post, 2015.01.11].

I agree with WaPo's dismissal of both the climate-change and economic arguments, but they oversimplify the problem. I've never beat the drum on the climate-change impact of the pipeline, because (a) I agree that blocking this single pipeline won't stop oil companies from mining the Canadian tar sands, (b) I know that here in South Dakota, concern about climate change won't get me any traction in a policy debate, and (c) there's a whole tub of other reasons to oppose the pipeline.

The WaPo editorial mentions the argument that all the Keystone XL oil will go to China and elsewhere. They dismiss that argument, saying the oil goes to U.S. Gulf refineries and that at least half of the oil currently refined at the Gulf stays in the U.S. WaPo seems impervious to changing economic facts, like decreasing U.S. demand and the business case enunciated by TransCanada itself, that make clear that this additional tar sands oil is destined for overseas consumption and will not affect U.S. energy independence one whit.

The WaPo editorial entirely ignores the other valid concerns Americans along the pipeline route have raised. Landowners on the Great Plains are being forced through eminent domain to bear the costs of disruption to their agricultural operations and future land-use plans. We are being forced to accept avoidable risk to the vital Ogallala Aquifer. We are being forced to facilitate the ongoing addiction to every dirtier fossil fuels. And we are being sold this pipeline on a steady series of Big Oil exaggerations and lies.

Sure, Keystone XL won't single-handedly destroy the planet. But it does other harm through eminent domain and unnecessary environmental risk, and it fails to deliver the advantages its backers have promises. When we're having a policy debate, it's not enough to prove that one harm won't happen. You have to prove benefits will happen and that other harms will not outweigh. Keystone XL fails that test.


The Bureau of Finance and Management issued it latest report on South Dakota's economy Wednesday. How're we doing?

  1. As of November 2014, our non-farm employment was up 3,000 jobs, 0.7%, over November 2013. Financial activities, education and health, and leisure and hospitality  shed jobs.
  2. Nationally over the same period, non-farm employment was up 2.0%.
  3. In 2013, our per capita personal income was 19th in the nation and $1,400 above the national average. Funny that we don't value teachers enough to ensure they rank similarly in pay.
  4. In Q3 2014, our personal income grew at 1.8% compared to a national growth rate of 3.9%. Farms are dragging us down: farm income dropped 20.8%, while non-farm income matched the national rate at 4.1%.
  5. Over the last 12 months covered by the report, family housing permits dropped 12.6% over the previous 12 months. Total value in those permits dropped 4.2% (about $24 million).
  6. The number of newly permitted Minnehaha County family units dropped 10.5% but increased in value by 2.4% (about $6 million).
  7. The number of newly permitted Pennington County family units dropped 45.6% and decreased in value by 27.3% (about $25 million).

Back in 2013, the Legislature concluded that its Legislative Research Council wasn't keeping pace with evolving technology and legislators' demands. They got LRC director Jim Fry to resign, and in the summer of 2014 they hired Jason Hancock to run the show.

Whatever reforms Hancock implemented must have included spending more time reviewing bill drafts. As of close of business yesterday, January 6, the LRC had published just nine bills (bit-chompingly summarized here). Those bills only popped into view Monday afternoon. As Mr. Powers notes, that's notably later than usual. Last year, we had bills to read by December 23. Two years ago, December 19. Three years ago, December 29. Four years ago, December 23.

Maybe the delay indicates that legislators are swamping their LRC with bills. Rep. Rev. Steve Hickey (R-9/Sioux Falls) tells this blog that he's working on twelve bills. Twelve bills: if all 105 legislators were that ambitious, we'd have 1,260 bills to plow through! That's more than twice what we usually have; Rep. Rev. Hickey is giving District 9 their money's worth and then some!

Two of Hickey's bills are super-duper secret, but he's willing to share the rest:

  1. death penalty repeal
  2. a mental illness bill related to the Death penalty
  3. two bills I'm calling victim wish bills so people who are murdered who oppose the death penalty have their wishes considered
  4. a bill that allows child sex abuse victims who were litigating their cases in 2010 to not have their cases dismissed because the legislature changed the statute of limitations
  5. two bankruptcy exemption bills
  6. an ATV bill that creates a fund for trails
  7. a bill that brings accountability to the drug control fund and gives 25% back to the counties for indigent defense.
  8. "Long Economic Winter" task force

The death penalty repeal bills are consistent with Rep. Rev. Hickey's conversion on capital punishment in 2013. His bill to repeal the penalty in the 2014 session was defeated in its first committee hearing on a narrow 7–6 vote.

The ATV trail bill could be fun. Expect me and Patrick Lalley to lobby for an amendment to include bicycle access to any new trails.

The "Long Economic Winter" task force is a fiscal prepper idea Rep. Rev. Hickey has been pushing to no avail for a few years. Rep. Rev. Hickey contends that we need to plan for how South Dakota could survive a serious economic depression, a massive cutback in the federal spending that keeps our state afloat (38.9% of the Governor's proposed FY 2016 budget), or worse. Here's how Rep. Rev. Hickey described the proposal to his colleagues last year:

Study the ramifications of a long economic winter on main street South Dakota and state government, and make recommendations for contingency plans. I'd like a LEW (long-economic winter) workgroup to address the following 7 questions.

  1. What would say, a 20% reduction in Federal funds mean to South Dakota?
  2. What would the collapse of the dollar mean to main street South Dakota: What would it mean to our state's large financial sector, which at present is a significant source of revenue and jobs?
  3. What are the possibilities for weaning South Dakota off Federal and other uncertain (or arguably unhealthy) revenue sources?
  4. What if any measures in South Dakota could be adopted so our present statutes don't exacerbate difficulties in buying and selling, or bartering?
  5. What current state statutes might hamstring people simply trying to take care of themselves and their families and or frustrate or prolong our recovery?
  6. What would a significant disruption in the food, fuel or power supplies mean to our population?
  7. Considering the unstable and unsustainable economic environment beyond our borders, just how much should we keep in our reserve funds? [Rep. Steve Hickey, 2014 Summer Studies Ballot, spring 2014]

If the economy gets so bad that we have to barter, details of state law may be the least of our concerns. But maybe California Governor Jerry Brown's plan for power micro-grids would be a good step in toward that disaster planning.

I'm eager to see Rep. Rev. Hickey's full proposals in the Legislative hopper. And really, if we are to be an informed and well-governed democracy, we need to see those bills as soon as possible. Get cracking, LRC!


The South Dakota Retailers Association lists monthly sales tax revenue reports from January 2004 up to October 2014. According to those numbers, monthly sales tax receipts decreased over the corresponding month in the previous year in 5 out of 46 months of Dennis Daugaard's gubernatorial regime, or just under 11% of the time. Sales tax receipts shrank in 13 out of the 84 months listed for the Mike Rounds regime, over 15% of the time. Note that 10 out of those 13 shrinky months were in 2009, when the national recession caught up with South Dakota's economy.

But let's compare apples to apples with the available data. During the Rounds regime, from January 2004 to October 2006, the average year-over-year monthly sales tax growth was 6.51%. During the Daugaard regime, from January 2012 to October 2014, that growth has been 4.83%. In 24 out of 34 months in these comparable periods, sales tax receipts grew faster under Rounds than under Daugaard.

I invite Sunday economists of all stripes to pass this chilly winter day brewing up explanations for the underperformance of Daugaardonomics.


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