People use county roads to get to town to buy booze. People who do stupid things after drinking that booze then use county jails. Counties do not get to tax sales or alcohol to pay for those roads and jails. Towns do.

Why the Legislature so throttles the counties but not the towns escapes me. As the road funding bill has been pared down to reduce the funding counties get to fix their deteriorating roads and bridges, the Legislature is advancing Senate Bill 135, which would allow the towns to impose an additional sales tax for their needs.

The Legislature's willingness to heed town criers while ignoring destitute county commissions seems odd. By itself, however, SB 135 doesn't seem like a terrible idea. If towns have needs, they ought to be able to meet those needs. Local control, yadda yadda.

But then Pat Powers comes tooling along for the Koch Brothers to shout Oh my Mammon! SB 135 increases taxes $150 million! Aaaaaaaahhh!

Please. The press release Pat reads from Americans for Prosperity lives in the La-La Land in which its Koch-sipping serfs need to make it look like they are busy. "If every city in South Dakota participated, it would mean more than $150 million in new taxes." Sure. And if every city in South Dakota participated, that would mean every city in South Dakota apparently has unmet needs, and a majority of voters in every city in South Dakota agree that their city commissioners are making wise taxation decisions. That's how democracy works... but as we know, Americans for Prosperity has a problem with democracy. They thus must blow up local control as an evil new tax and stand in the way of local governments meeting local needs.

Americans for Prosperity—remember, they're not for the collective prosperity, just the prosperity of the 1%.

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Yesterday I reviewed the election picks of the participants in the South Dakota Chamber of Commerce Business Caucus. Today, let's look at the media habits and policy leanings revealed by that straw poll.

The Chamber asked Business Caucus participants to name two media they use to follow the Legislative process:

Source Users
Newspaper 58
Television news 31
Public radio and television 26
Internet news sources 66
Blogs and social media 29
Friends—chatting 26

Internet news and newspapers are the top choices. Folks are still tuning in to KELO and KOTA, but blogs and social media are close to both the commercial tubers and public broadcasting (which really does the best legislative coverage in the state with its Statehouse service).

The Webby skew of this group's media preferences may reflect the age groupings. The Business Caucus included 52 GenXers, 42 Millennials, 39 Boomers, and just one really old businessperson.

A quarter of these employers (26 out of 104 responding to this question) said their businesses have policies "about employees' personal websites." I hope these policies do not go beyond reminding employees to keep their business lives separate from their personal online lives. 60% (48 out of 79 responding) say they check social media to screen job applicants (I should apply for more jobs to boost my readership!). But 96% (98 out of 102 responding) said employers should not have the right "to collect passwords from employee's private social media accounts when they aren't under suspicion for a crime." On that issue, the Chamber of Commerce leadership appears to be out of step with its membership: Chamber boss David Owen testified earlier this month against legislation that would have prevented such forcible invasions of job applicants' online privacy.

On transportation issues, only one member out of 127 respondents expressed direct opposition to raising taxes to boost funding for road and bridge repairs. Read that again: in a group of Chamber members, 99% support raising taxes for a practical public purpose. Another 80% (67 out of 84 respondents) support an extra penny sales tax in their cities for local needs.

Asked to name three taxes they would support raising for roads, the gasoline tax, sales/excise tax on cars, and wheel tax were the most popular. Using property tax and a price-based wholesale tax on fuel were the least popular.

Nearly half of the Business Caucus (52 out of 106 responding) support Senator David Novstrup's "youth minimum wage" and admit that they think "young people in first jobs don't have the value of fully adult workers." That's logically and morally wrong.

Chamber members are uneasy about creating a state debt collection office. 50% (43 out of 86 respondents) oppose the concept; the other half are split 29% for a state debt collection office and 21% offering only partial support, saying they can live with "a small state office to track the numbers but use the private sector for heavy lifting." The Daugaard Administration had a heck of a plan that would have garnished wages and seized bank assets to pay off debts owed to the state. The Senate and the private debt collection agencies freaked out and scared the toothless Daugaard regime into tabling that bill and putting its chips on a much weaker bill that now just withholds licenses from deadbeats.

The Business Caucus may not be scientifically representative of the general population of South Dakota businesspeople, but it does represent the voices of those most likely to go to Pierre to participate in the Legislative process.

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Senator Jason Frerichs (D-1/Wilmot) got the Senate to advance his watershed management plan yesterday. Senate Bill 2, while significantly watered down, is a positive step toward dealing with drainage and other water quality issues in South Dakota. In its baby-steps form, SB 2 will map nine new "river basin natural resource districts," for South Dakota's major watersheds, then dispatch a task force to work with local governments to create a pilot water management plan for the Vermillion River watershed. Senator Frerichs tells me he likes that step, since the Vermillion River is the only watershed that lies entirely in South Dakota. Starting there will give local lawmakers, water consumers, and conservationists a good framework for applying plans to other districts which will inevitably have cross-border conversations about water quality.

The Senate vote wasn't a slam dunk: SB 2 drew 12 nays from Republicans who either don't like government, cooperation on water issues, or bills by Democrats (although the latter shouldn't play too large in opponents' sentiments, since the prime sponsor in the House is Republican Majority Leader Brian Gosch (R-32/Rapid City).

Technically, Senator Frerichs offered some debate on his bill the day before it came up in the Senate. On Wednesday, during debate on throwing another pot of money at pine beetles in the Black Hills, Senator Frerichs drew the following comparison:

I applaud the efforts of the folks that are dealing with this Mother Nature problem out there, truly management at its finest. In our Ag committee we've had a little discussion about this and I've talked with my friends who represent those areas.

You know, this pine beetle issue is very similar to what we deal with on the eastern side as far as some water issues, especially surface water, and so I just ask the body's support. Even though I'm probably about as far away from this issue as could be anyone else, we're duly elected as 35 senators to represent this state. I think it's a good issue, and I appreciate the efforts for management on a Mother Nature problem [Senator Jason Frerichs, floor debate on SB 152, South Dakota Senate, Pierre, South Dakota, 2015.02.18, timestamp 32:45].

Translation: I'll vote to spend money on you guys' problem, even though pine beetles aren't eating trees in my back yard; how about you guys vote to help solve some water issues that are more prevalent in my bailiwick?

Four Black Hills senators (Haverly, Rampelberg, Solano, and Tieszen) took Frerichs up on that pitch (because you know, water does run through the Black Hills, too!). Three Black Hills senators (Cammack, Ewing, and Jensen) said no while happily taking tax dollars for their beetles.

Also voting no was the senator towards who sees darn near all of that water flow through his back yard, Senator Dan Lederman (R-16/Dakota Dunes). Of course, when all that run-off comes burbling over the dikes at his golf course, Senator Lederman will climb on his McMansion roof and shout for more big government management of his water problems.

2 comments

Democratic legislators stand little chance of passing House Bill 1175, their attempt to insulate the results of initiatives and referenda from Legislative tinkering, since Republicans see the initiative and referendum as useful tool for Democrats. This blog's astute state constitutional scholars note that HB 1175 probably can't withstand court muster, since Article 3 Section 1 says the constitutional provision for initiative and referendum "shall not be construed so as to deprive the Legislature or any member thereof of the right to propose any measure."

I can't beat Republican supermajorities in committee, but I may be able to defend HB 1175 in court. Another eager reader waves under my nose SDCL 9-20-5.1, a statute addressing municipal initiated measures:

No initiated ordinance or resolution may be amended or repealed by the governing body of a municipality until at least one year has passed from its effective date [South Dakota Codified Law 9-20-5.1, enacted 1977].

Our Legislature saw fit to protect the popular will at the local level by prohibiting local elected officials from changing initiated ordinances for one year. The Republic has not collapsed, and that prohibition has stood for 38 years without a judicial nix.

The constitutional objection to HB 1175 is that Article 3, Section 1 only protects legislators' rights, not city councillors. But Article 3, Section 1 mentions munis:

This section shall not be construed so as to deprive the Legislature or any member thereof of the right to propose any measure. The veto power of the Executive shall not be exercised as to measures referred to a vote of the people. This section shall apply to municipalities [South Dakota Constitution, Article 3, Section 1].

This section shall apply to municipalities. This section says the Legislature and members thereof maintain the right to propose any measure. Yet municipalities exercise legislative powers, and the state constitution apparently countenances a state law that restricts that power to protect the will of the voters expressed in initiated measures for one year after enactment.

Rep. Patrick Kirschman, feel free to try this argument out before House State Affairs when you present HB 1175. The existing law protecting local initiated measures raises an interesting question: should the popular will of the statewide electorate enjoy the same protection as the popular will of local voters? Or should local governments have the same (dangerous, disrespectful, anti-democratic) authority to repeal initiated measures as our Legislature?

8 comments

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.

98 comments

Freshman Rep. Alex Jensen (R-12/Sioux Falls) seems to think it would be a good idea to repeal some laws dealing with county officials. House Bill 1081, Rep. Jensen's first bill in the hopper, would make three changes to state law:

  1. Repeal the mileage reimbursement that state law currently requires counties to pay to all county officials except for sheriffs.
  2. Take away the power of county commissioners to procure a copy of the field notes of the original field survey of the county and order a big map be drawn therefrom.
  3. Erase the duty of the county commission to visit the county jail once a year during a regular meeting.

I invite discussion of possible reasons to make these changes. Over breakfast, I can think of no good ones.

  1. We should pay county officials for the travel expenses they incur doing our public business. SDCL 7-7-24 makes sure we don't short our public servants.
  2. I like those big county maps! They help me pass the time when I'm waiting for Deb to get off the phone. SDCL 7-8-22 does mandate anything; it just says that if the commission wants a map, it can get one.
  3. I don't think anyone county jailers are running the Gulag Rura Penthe, but it doesn't hurt to have one little bit of oversight. We put people in cages; we should have an obligation to look at those cages, at least once a year, to make sure we're o.k. with the condition of those cages and the offenders therein.

Repealing mileage reimbursement, map rules, and jail oversight didn't figure among candidate Jensen's priorities during the 2014 campaign. Jensen said he'd work on health care, education, and business-friendliness; HB 1081, his only bill so far, appears to do nothing about those issues. But I guess the party leadership has to keep its trainees busy with something.

13 comments

Members of the Government Operations and Audit Committee have brought forward two bills that appear to target the gross conflicts of interest in South Dakota's EB-5 visa investment program. GOAC only glancingly acknowledged these violations of state law and policy and blamed what little it acknowledged on the dead Richard Benda while ignoring the violations committed by the very much alive and enriched EB-5 czar Joop Bollen.

One bill would make things better. One bill would make things worse. Guess which one GOAC members appear to prefer?

House Bill 1023 was the first Benda-Bollen bill submitted by Rep. G. Mark Mickelson (R-13/Sioux Falls) and six other 2014 GOAC members who returned to Pierre this session. It amends SDCL 5-18A-17 to extend an existing conflict-of-interest prohibition on state contracts (which already bans the kind of goofy contract Bollen signed with himself in January 2008) to cover state officials and employees for one year after they leave office (which would have banned Richard Benda's golden parachute with Bollen's state-contracted EB-5 management company SDRC Inc.). HB 1023 is short, simple, and sensible.

Rep. Mickelson threw his second Benda-Bollen bill, House Bill 1064, into the hopper just today. It has the same seven sponsors, plus Senator Deb Peters (R-9/Hartford). HB 1064 repeals the statute that HB 1023 amends, indicating this later Benda-Bollen bill is meant to replace the first. HB 1064 amends and expands SDCL 3-16 to ban self-dealing contracts as well as define exactly what kinds of "interests" the state will consider conflicts.

But check out the power Section 5 gives to the Governor and other executives to make exceptions:

A governing body may authorize an officer or employee whose responsibilities include approving, reviewing, or negotiating a contract on behalf of a state agency or supervising any employee who has these responsibilities to be a party to or derive direct benefits from a contract if:

  1. The governing body has reviewed the essential terms of the transaction or contract and the state officer's or employee's role in the contract or transaction; and
  2. The transaction and the terms of the contract are fair, reasonable, not contrary to the public interest, and fully disclosed in writing to the governing body.

The authorization, which may not be unreasonably withheld by the governing body, shall be in writing. The governing body may adopt a written plan to manage any perceived, potential, or real conflicts of interest associated with the state officer's or employee's role in a contract or transaction.

Any authorization given pursuant to this section is a public record. Each authorization shall be filed with the commissioner of the Bureau of Human Resources, who shall compile the authorizations and present them annually for review by the Government Operations and Audit Committee [House Bill 1064, Section 5, as published 2015.01.20].

House Bill 1064 defines conflicts of interest, extends the prohibitions against them, then grants the Governor, the Attorney General, and other Pierre potentates the power to pish-posh those prohibitions.

As an anti-bonus, Section 3 says the one-year post-employment extension only applies to contracts that would benefit the state official or employee in question to the tune of $100K or more. In other words, use your state job to write yourself a private contract that kicks in after you leave Pierre, and as long as you limit your pay to $99,999.99, you're in the clear.

Making sure we look out for our friends, Section 4 further dilutes the conflict-of-interest prohibitions by exempting state officers and employees whose ownership interest in a contracting entity is only 5% or less and by narrowing the definition of "direct benefit":

A state officer or employee does not derive a direct benefit from a contract based solely on the value associated with the officer's or employee's investments or holdings, or the investments or holdings of other adults with whom the state officer or employee lives and commingles assets, in an entity that is a party to the contract provided the officer or employee does not meet the requirement contained in subdivision (1) of this section [HB 1064, Section 4].

Call this the Skjonsberg Provision: last October, Lee Fang of The Nation discovered that Rob Skjonsberg, manager of the Rounds for Senate campaign, had cast a vote on the state Board of Economic Development to invest state dollars in Novita LLC, a company in which his investment company Lake Sharpe Investments had an interest. Skjonsberg said there was only a perception of conflict of interest, and state officials backed him up, saying Skjonsberg did not have a direct interest in Novita LLC. But the above passage of HB 1064 seems crafted to make explicit the fact that no, really, high rollers on the Board of Economic Development can keep voting money to projects in their indirect portfolios.

Both bills have been referred to ouse Judiciary, which Rep. Mickelson chairs. We'll see if he uses his position there to withdraw the simpler, stricter HB 1023 and promote the diluted, exemption-riddled HB 1064.

55 comments

Need help figuring out your 2014 federal tax return? Don't count on the Internal Revenue Service. The National Taxpayer Advocate's latest report to Congress says the IRS lacks the staff and funding to serve taxpayers:

  1. The IRS will be able to answer only 50% of the 100 million calls it will receive from taxpayers this fiscal year.
  2. Callers will often wait 30 minutes to speak to an IRS rep.
  3. In 2004, the IRS answered 87% of its calls, with an average hold time of 2.5 minutes.
  4. Last year, the IRS dropped tax prep service "for hundreds of thousands of low income, elderly, and disabled taxpayers who sought assistance."
  5. Voluntary and timely tax payment provides 98% of the federal government's revenue. Providing good customer service collects revenue far more efficiently than enforcement actions against taxpayers who don't file correctly or at all.
  6. Since FY2010, Congress has reduced the IRS budget 9.9% in straight dollars and 17.7% in inflation-adjusted dollars.
  7. Since FY2010, budget cuts have caused the IRS to cut workforce by 12.3%.
  8. Since FY2010, the IRS has cut its training budget by 87%. In a complicated field where rules and procedures change every year, the amount available to spend on training for each employee (FTE) has dropped in five years from $1,774 to $339.
  9. The IRS managed to answer a bit more its mail on time last year than the year before, but it still failed to process 51% of adjustments (i.e., "You owe us" or "We owe you") correspondence in its standard 45-day timeframe.

That lack of customer service is just one of multiple serious problems the National Taxpayer Advocate's office identifies at the IRS. We could ask for no better example of how smart government sometimes means bigger government: if we want more taxpayers to get answers to tax questions in less time, we need more staff with more training on more phones.

But Senator John Thune appears to prefer self-destructive failure:

Republicans who now control Congress and who led the effort to reduce the IRS budget don't seem too concerned about the agencies woes. It goes back to GOP charges that the agency targeted conservative groups seeking tax exempt status for extra scrutiny.

Republican Sen. John Thune of South Dakota: "I don't think that based on the IRS' record over the last couple of years that there's a whole lot of sympathy for the complaints that they're now making about not having enough funding. Obviously they have a job to do, it's an important job we want to make sure they have the resources to do that job to collect the taxes but wasting resources targeting conservative groups and other things like that is obviously something that we would take great issue with" [Brian Naylor, "IRS Budget Cuts May Make for an Unpleasant Tax Filing Season," NPR: Morning Edition, 2015.01.20].

The Cincinnati IRS office oversteps its bounds, and Senator Thune decides to strangle the entire IRS and leave taxpayers at sea. That makes about as much sense as a teacher reacting to one student scribbling on a desk by taking away everyone's writing utensils and then flunking the kids for not finishing their penmanship assignments. It's almost as if Senator Thune doesn't want us to submit our homework—er, taxes (ah ha! so that's his game!).

The Internal Revenue Service is not some partisan enemy. It is an essential arm of government, without which the ship of state sinks. Senator Thune and Congress can impose the necessary oversight on the IRS and still provide the resources to help tens of millions of taxpayers file their taxes correctly and on time.

29 comments

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  • Michael Hope: South Dakota Should Accept Marriage Equality 2015.07.02
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  • Referred Laws 19 and 20 Show Democrat Strength and Path to Victory in 2016 2015.07.01
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  • David Novstrup, Creator of Youth Minimum Wage, Gets Ink for Bad Arguments 2015.07.01
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    Karl Gehrke has invited me onto SDPB Radio’s Dakota Midday today to discuss our two successfully petition drives to place Referred Law 19 (incumbent protection plan) and Referred Law 20 (youth minimum wage). Karl is planning to interview me on the second segment of the show, starting around 12:20 p.m. Central, 11:20 a.m. Mountain. You can listen on […]

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