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Municipal League’s Pro-Corporate-Welfare Propaganda Not Quite Abusing Tax Dollars

Last updated on 2012.10.01

David Lias posts a press release from the South Dakota Democratic Party decrying the use of taxpayers' dollars to campaign for corporate welfare. Today's knocker-twister: the South Dakota Municipal League has published its October edition of South Dakota Municipalities with the following advocative cover:

South Dakota Municipalities, October 2012 cover advocating Referred Law 14

That's a pretty clear call from the South Dakota Municipal League for its members to vote for Referred Law 14, Governor Daugaard's "Large Project Development Fund," which would divert 20-plus-million in contractor's excise tax revenues to a slush fund the Governor can use to give handouts to big corporations for building big projects in South Dakota.

Inside, SDML exec Yvonne Taylor opines that RL 14 is essential to economic development in South Dakota:

If voters reject Referred Law 14 South Dakota will have no incentives to encourage large investment here and will not be able to compete with surrounding states [Yvonne Taylor, "Director's Notes," South Dakota Municipalities, October 2012, p. 4].

No incentives? You mean low labor costs, no state income tax, uncongested highways, good schools, pheasant hunting, and the Black Hills don't count as incentives?

State Representative Bernie Hunhoff and SD Dems exec Ben Nesselhuf can cite plenty of reasons why corporate welfare is bad policy. But they're also hot over the fact that the Municipal League, whose primary source of funding is dues from cities, towns, and affiliated organizations, is putting funneling money from tax coffers to political propaganda:

Big business lobbyists are campaigning to support the tax give-away program. "It's the American way to solicit private money for your political cause," Hunhoff says, "but it absolutely crosses the line, and possibly violates state law, when you get public organizations to use their resources."

..."Corporate lobbyists have benefitted by using our own tax dollars to promote an election issue that they hope will reap more tax dollars for their corporations," Hunhoff said. "That's about as unfair as anything I've seen in South Dakota politics and elections."

...The use of taxpayer funds for election purposes appears to violate two statutes, 12-27-20 and 12-26-14. "I don't want to get anyone in trouble, but I do want a fair election and a fair discussion of this important matter," Hunhoff said [SDDP press release, quoted by David Lias, October 1, 2012].

Ah, state law! What do those statutes say?

12-27-20. Expenditure of public funds to influence election outcome prohibited. The state, an agency of the state, and the governing body of a county, municipality, or other political subdivision of the state may not expend or permit the expenditure of public funds for the purpose of influencing the nomination or election of any candidate, or for the petitioning of a ballot question on the ballot or the adoption or defeat of any ballot question. This section may not be construed to limit the freedom of speech of any officer or employee of the state or such political subdivisions in his or her personal capacity. This section does not prohibit the state, its agencies, or the governing body of any political subdivision of the state from presenting factual information solely for the purpose of educating the voters on a ballot question.


12-26-14. Use of public relief, loans, or grants to influence political activity or vote as misdemeanor. It is a Class 1 misdemeanor for any person, directly or indirectly, to promise or threaten to grant or withhold or to cause to be granted or withheld, any public relief, assistance loans, or grants for the purpose or with the intention of controlling or influencing the political affiliations, party registration, support or vote at any election, of any person so promised or threatened.

The terms "public relief" and "assistance" include all forms of direct public relief and also all forms of indirect relief such as employment on any public works or project. The terms "loans" and "grants" include all forms of financial assistance granted by the federal government or any of its agencies and also by this state or any of its political subdivisions.

I welcome alternative legal opinions from, say, real lawyers. But absent professional advice, here's my read:

Citing 12-26-14 feels stretchy: SDML membership dues probably don't fall under the definition of public assistance and grants that this statute appears to target.

Citing 12-27-20 packs more punch: the member municipalities are handing their public dollars to SDML and permitting the expenditure of those dollars to publish SD Municipalities, which this month is trying hard to influence the adoption of a ballot question.

Ah, but now we can play the shell game. SDML's primary source of cash is municipal tax dollars. But according to their 2010 990 tax form, SDML made $85,736 on "Magazine/Dir. Advertising." SDML's "Printing and Publications" expenses in 2010 were $72,391. SDML's Taylor could thus contend that SD Municipalities pays for itself and that no tax dollars were harmed in the making of its political propaganda.

The Municipal League may not be abusing campaign finance law, but Referred Law 14 will abuse plenty of tax dollars, not to mention true free-market Republican sensibilities, if we let it pass in November. Don't be fooled by the Municipal League or your local Chamber of Commerce: the proper role of government is not to redistribute money to the fat cats who are already rich enough to build giant industrial projects. The proper role of government is to invest our public dollars in public projects.


  1. Bernie Hunhoff 2012.10.02

    Cory, we don't want to get anyone at the Municipal League in trouble over this; we are just pointing out how the machine politics of Pierre and their corporate friends use "our" government and good groups like the Municipal League to further their own agenda. They've also pushed Chambers of Commerce and other groups to get on board with them.

    So we're not asking for an Attorney General investigation, etc., etc. Just making a strong point as to how campaigns go in SD.

    But the Municipal League can't make the argument you made for them that city taxes are not used for the magazine because if you look in the magazine you'll see that they state that some of the city's dues to the league are used to publish the magazine (it's a requirement of its postal permit).

  2. Dougal 2012.10.02

    Further bleeding taxpayers to fatten corporate bank accounts will not yeild one more job in South Dakota.

    This so-called Large Project Development Fund was created to be a campaign prop when Daugaard runs for re-election in the next election. If it's allowed to stand, LPDF will hand out money to companies that had already decided to expand or locate in South Dakota so Daugaard can claim he created the program which brought the jobs.

    We saw this campaign gimmick with the Revolving Economic Development Initiative loan program with a long list of companies getting 3 percent loans from our taxes. Did these companies need the cheap loans? Very doubtful. Did they improve W2 employees' paychecks in South Dakota? Not at all.

    South Dakotans pay a heavy price for the giveaways already available. Our W2 employees make the lowest paychecks in the nation, making South Dakota the last stop in the USA on a corporation's evacuation to sweat shops in Pacific Rim. South Dakota has no corporate profits tax, so the burden for all this "growth" falls back on property taxpayers to support our schools. South Dakota keeps unemployment and workers' compensation benefits as minimal as possible so the fat cats can benefit while South Dakotans suffer. And local governments routinely hand out property tax reductions for new developments, so that puts the burden on individuals to pay for education. What a bargain!

    The Daugaard Re-election Committee wants this new tax giveaway to corporations. They want your tax money to shop for a slogan about how their plan is working.

  3. Rep. Susan Wismer 2012.10.02

    The Governor’s office has not been shy about co-opting local government lobbyists . Last spring their people hit up the Association of Towns and Townships, (a group primarily concerned with roads and other issues our antiquated tax structure is not prepared to address in the face of modern agricultural and hunting development pressures,) at their meeting in Huron for support. Local Democratic legislators stopped that dog and pony show.

    The Municipal League’s Annual Conference is meeting in Pierre this week. Gov. Daugaard is addressing their noon luncheon on Thursday. If there are municipalities out there who don’t appreciate their tax dollars and their group being thrown into this debate, this week is when they need to deal with it.

    And to quote Bernie Hunhoff again, “nobody is arguing over whether or not we need to practice economic development; the question at hand is whether we should rob education funding for economic development or find a better funding source. “

  4. T. Henley 2012.10.02

    When do these "municipal tax dollars" lose their character as public funds? When paid to the gas station for fuel? When paid to the South Dakota Magazine for a subscription? How about when paid to the local development council or the Municipal League? When paid to the mayor as wages or when the mayor pays his tithe to his church?
    Has to happen somewhere, right?

  5. Bernie Hunhoff 2012.10.02

    That's a good question, but I it becomes more complex when a group of cities create an organization to speak for them -- which could be a development group or the SDML -- and have them do things that the cities themselves are prohibited from doing.

  6. Steve Sibson 2012.10.02

    The Muncipal League was on the ground floor of Metro 1313 geo-political regionalization needed to implement the planned global economy. They are bad news.

    [CAH: Good grief, don't tell me Metro 1313 is a tentacle of Agenda 21—oh, that didn't take long. And if we add 1313 and 21, subtract 2, and divide by 2, we get 666. Quod Erat Demonstrandum.]

  7. T. Henley 2012.10.02

    I would agree the perception of what is going on changes; however, the crux of the matter is what the law says. I am not aware of anything that makes public funds paid by members to the League, the school boards' association or the county group into public entities, solely by virtue of receiving the money.

  8. Bernie Hunhoff 2012.10.02

    And I agree that good attorneys could have a good debate on this forever. So it clearly violates the spirit of the law, and it's a tough call on whether it violates the letter of the law. Obviously public funds were used to influence a ballot measure, and that's the spirit of the law.

  9. Donald Pay 2012.10.02

    As Bernie probably knows, this is nothing new. The Municipal League has been serving as the front man for corporate power for many years. They were out front supporting out-of-state companies during the nuclear waste and Lonetree issues. We think municipalities pay the entire costs of the Municipal League, but I'm convinced the Municipal League is of a mini-ALEC, taking corporate money and swapping money and issues with the Chamber. The Municipal League has always been a part of the Republican evil empire in Pierre.

  10. Steve Sibson 2012.10.03

    "Good grief, don't tell me Metro 1313 is a tentacle of Agenda 21"

    Among the United Nations-created Agenda 21′s bevy of bastard babies are Sustainable Development, Smart Growth (a term used to describe Chaffee Crossing on its website), MPO’s (Metropolitan Planning Organizations…Ft. Smith belongs to the BI-State MPO), Providence Communities (one is being planned for the Ft. Chaffee area), Metro 1313, ICLEI (International Council for Environmental Initiatives—N. Little Rock Mayor Hayes is CEO for the U.S. division), Quality of Place (used to describe Chaffee Crossing), Green Space (on Chaffee Crossing website), Public/Private Partnerships (Fascism), New Market Tax Credits , COG’s (Councils of Governments), ad infinitum.

    The list of organizations and efforts to control and change our Constitutional & free enterprise system is seemingly endless. The buzzwords always sound benign, even inviting…”mixed use environment”, “natural resources”, “walking/biking trails”, “no cars needed when everything is within walking distance”, “long term region wide planning”, “public visioning”, “common ground solutions”, “localized planning effort”, “green space”, “friendly neighborhoods”….you get the picture.

    Why? The immediate goals include those whose generous salaries are paid by taxpayers, those who make big bucks in land sales, developing, constructing, financing off the taxpayers too, and finally those whose ideology is quite the opposite of our Founders, i.e. committed Collectivists/Communists/Socialists/Fascists. The ultimate goals include restriction of land use, regulation of most human behavior, population reduction, destruction of individual liberties and the U.S. Constitution & rule of law, i.e. tyranny.

  11. Steve Sibson 2012.10.03

    For those for good reason who don't like ALEC:

    American Legislative Exchange Council (ALEC) is behind a large portion of the model legislation that they are trying to get implemented. This is being done in all the states all around the county via the ALEC State Chairmen and members.

    Metro 1313 also plays a major part in bringing model legislation into the state, county, city and school governments.

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