Press "Enter" to skip to content

Daugaard Increases Spending on Corporate Welfare

As South Dakota Democrats collect signatures to put Governor Dennis Daugaard's myopic and ineffective corpoate handouts to a public vote in 2012, Bob Mercer notes that the governor's math justifying the handouts is a little off:

The Daugaard administration also points out this really won't be new spending. They like to claim that a current program that provides construction-tax refunds for large projects has been costing state government $23 million a year in lost revenue.

That however isn't true. The facts published each year in the state Revenue Department's annual report show much smaller numbers.

For 2010, the Revenue Department reported large project refunds of $11.7 million. For 2009, $18 million. In 2008, $14.9 million. In 2007, $5 million. In 2006, prior to the Legislature and Gov. Mike Rounds greatly expanding the program, $1.9 million.

...For the current 2011 fiscal year, [contractors' excise tax] revenues are estimated by the governor's Bureau of Finance and Management to be about $61.2 million and to rebound somewhat in 2012 to $67.5 million.

Assuming they get back to somewhere between $70 million and $78 million in 2013, the 22 percent diversion to the new grant fund that first year would be in the range of about $15 million to $17 million.

That's more than the actual refunds in three of the past four years. The refund program automatically expires at the end of 2012. Daugaard wants the grants as a replacement [Bob Mercer, "Opinion: Use of SD Tax Money for Grants Prompts Questions," Mitchell Daily Republic, 2011.04.04].

Hmmm.... The Republicans in Pierre cut K-12 education funding 6.6%. They cut most other state expenditures 10%. They cut Medicaid, public radio, and many other things regular South Dakotans find useful. But when it comes to handouts for wealthy corporations whose execs may or may not live here, our Legislature and Governor find the money and will to increase funding perhaps moer than 30% from last year and over 700% from what those corporate "incentives" cost us back in 2006 when the economy and state budget weren't in such bad shape.

Boy, I don't know, Tyler: that sounds like something bigger than an effort to score some cheap political points. That sounds like some gravely misaligned fiscal priorities that South Dakotans are right to question. Care to sign my petition?

Bonus Badder Business Bureau: Meanwhile, Sioux Falls mayor and alleged Democrat Mike Huether says Sioux Falls needs more business incentives:

Huether, who spoke to the Downtown Rotary club, said the city does not offer enough incentives to entice businesses. Members of his administration are analyzing incentive programs, and he said he wants to replicate some ideas that are being used by the state.

Pat Costello, Gov. Dennis Daugaard's commissioner of economic development, attended the speech and said afterward that the state is outgunned by its neighbors when it comes to offering business incentives. The state offers various loans as well as tax rebates on some large projects [Jonathan Ellis, "Mayor: Sioux Falls Needs More Business Incentives," that Sioux Falls paper, 2011.04.05].

Good grief, Mayor Huether! You're Sioux Falls! You're already the Shangri-La of opportunity for nearly every semi-talented young person in East River. You've already built solid economic growth off raiding the talent pool and shopping dollars of every rural community in a 60-mile radius. What more do you want?


  1. Charlie Johnson 2011.04.07

    What did Julia Roberts say in the movie, "Pretty Woman"? "I want the .........".

  2. Roger Elgersma 2011.04.07

    The republican right have this intense need and craving to help the rich since as someone who was on Parker Spitzer for a short time kept saying that the rich are the ones who give us jobs. Sorry, small business has always been the ones who give us the most jobs. So the only reason to give welfare to the rich is the psychological 'I wana be rich syndrome' that infects even poor South Dakotans.

    So now we think we have a business friendly state. We have poorly paid workers which means that any business would have customers without much money to spend, we have low population so new businesses would have a lack of customers. We have less than 70% graduation rates from high school so we have a low qualified work force. But we have low taxes and since you will not make much money here anyways you will not get much benefit from our low taxes.

    So does the fact that we had welfare for the rich in tax breaks for the big projects make it seem ok to do it again. They did not take away those tax breaks so this in not a comparison to it, but an addition to it. This means we now are taking away twice as much from the kids in school rather than replacing the tax break with the cash incentive. But since not all that much money is made in South Dakota a cash handout would be more likely to bring new business since they do not need to make all that much money to get the benefit.

  3. Matt Groce 2011.04.08

    Wow this all started after the '06 election. And what big republican leader got elected to the legislature for the first time in '06?

    {CAH: There you go again, Matt, connecting the dots....}

  4. larry kurtz 2011.04.08

    Democrats=safe water, safe food, safe shelter, safe sex. Republicans=cheap water, cheap food, cheap shelter, cheap sex.

Comments are closed.