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Fiscal Note: South Dakota Tops in Taking Federal Transfer Payments

As we prepare for Governor Dennis Daugaard's budget address (live on SDPB Statehouse this afternoon, 1 p.m. Central, noon Mountain!), it's good to remind ourselves of the federal largesse that makes South Dakota's budget possible. Well over 40% of South Dakota's budget comes from Uncle Sam.

Further confirming South Dakota's red-state moocher status are these charts from a new economic letter from the Federal Reserve Bank of San Francisco. The map below shows that South Dakota is in the bottom quartile of states in terms of net contributions per capita to the federal government:

Net Contributions Per Capita to Federal Govt by State
Net contributions per capita to federal government. Source: Malkin and Wilson, FRBSF, 2013.12.02

The FRBSF calculates net contributions by subtracting a "narrow measure of transfers" from federal taxes paid. "Transfers consist of grants to state and local governments and direct payments to businesses, nonprofit organizations, and individuals," say authors Israel Malkin and Daniel J. Wilson. Include retirement and disability benefits, federal employee compensation, and federal procurement contracts, and you would see South Dakota drop even lower on the following graph of net contributions against income:

State Income vs Net Contributions
The kicker comes when you look at the federal transfer payments that pad South Dakotans' pockets. The chart below shows we receive more federal assistance per person than folks in every other state except for Alaska and North Dakota.
State Income vs Net transfers received
This afternoon's drinking game includes double shots every time Governor Daugaard says "self-reliance." But as you stand and shout, "Juche, Dear Leader!" between drinks, think of these charts, and try not to laugh whiskey out your red-state nose.


  1. Tasi 2013.12.03

    Thank you for the numbers...have some for Medicaid? When I said that Medicaid was mostly funded by the feds, Sen. Ryan Maher quickly let me know that South Dakota is paying more than it ever has and insinuated it was quite fair. Sounded like 60-40 to me, but I don't remember for sure.

    Red states mooching off blue states is a great party line for the Democrats, though.

  2. John Tsitrian 2013.12.03

    This probably could stand some deeper analysis. Considering how much federal land there is in South Dakota that has to be maintained with federal resources and how many miles of federal highways service so many fewer residents for similar stretches of road, these per capita figures may not be comparable. Add in the sizable proportion of the population that lives on reservations that are supported with federal money and compare that proportionally to other states. I just don't think these raw figures are meaningful comparisons.

  3. Douglas Wiken 2013.12.03

    JT, good points, but I don't think they make the comparisons less than meaningful, they just may need details that include your considerations.

  4. John Tsitrian 2013.12.03

    Agreed, Mr. Wiken. As with all raw data, some contextuality makes for a clearer picture.

  5. Jerry 2013.12.03

    The devil is always in the details for sure. But, you must admit that without that handout, we would be lost completely. I did like the fact that you threw in the reservations for good measure though, seems kind of fitting as this was all treaty lands that were by corrupt means to the present owners for a couple of shekels. I am very sure that the residents of the reservations would love to exchange the money from Washington for the honoring of the treaties that would allow the return of treaty lands. That would open the door to allow the rest of the residents the ability to continue to be subsidized for their needs to be able to survive.

  6. Lanny V Stricherz 2013.12.03

    But remember also that the Rapid City Journal had an article last week that showed that South Dakota received 721 million in farm subsidies last year, and when adding the Fed subsidy for crop insurance that total ballooned to 1.2 billion. And that does not include disaster payments for crop loss, the figures for which are kept secret, even in this day and age of open government. So please don't any of you folks make it sound like it is the tribes that skew the South Dakota figures.

  7. Cranky Old Dude 2013.12.03

    So do we actually get more money than others, or more per person because of our low population? Either way, Cory makes a good point about the total percentage of our budget that is Federal Giveaways.
    I always am bemused by the need for some to chime in about the land being stolen-the last Natives to occupy it merely appropiated it from somebody else. Were they treated shabbily? Probably, but no more than many other groups throughout history. Maybe you should read up on how the Wonders of Socialism impacted the Kulaks...

  8. Jerry 2013.12.03

    I am bemused by your bemusement cranky. As noted, I changed that "stolen" to "transferred by corrupt means". That means that you, the reader, can make your own conclusions to that. Whatever the case may be, the land that we are on was not transferred with honor. As far as being treated shabbily, of course you jest with your "probably, but not more than any other groups throughout history" like that makes it cool. There will soon be an anniversary of your probably comment over there in Wounded Knee. I think that most folks here in South Dakota would understand the "shabbily" reference you speak of when they think of that place and what it signified. By the way, the Kulaks were a wee bit different kind of property owners in Stalin's Russia.

  9. Jenny 2013.12.03

    It really goes back to SD being a low wage state.

  10. Jenny 2013.12.03

    Lanny and Jerry, that's just what republicans do everytime a statistic comes out that puts SD in an unfavorable light, blame it on the reservations.

  11. Douglas Wiken 2013.12.03

    Daugaard promoted some things which may make sense, but it is incredibly stupid to not get into the Federal Medicare system addition. $92 million would insure something like 45,000 South Dakotans. It would all be money that circulated in the SD economy stimulating growth and development. And most likely would not cost governments and taxpayers a pittance extra because we are already paying higher medical bills because they are coming into hospital emergency care and also jacking up all our costs.

    Daugaard is making a decision based more on his future in the Republican Party Hall of Ideological Partisan Nonsense. Daugaard's idea of economic development is a bit like watering plastic flowers in the hope they will grow. His worry about the federal program not developing is blatant nonsense.

    And a nice bit of his hypocrisy was failing to mention how all the federal money dumped into recession recovery has been a big part of the recovery of the South Dakota economy.

  12. Cranky Old Dude 2013.12.03

    The Sioux took the land from the Cheyenne, who took it from the Arapaho, who took it from somebody else. That is the natural course of things.

    That being said, we have not done well by our Indian brothers. They could have assimilated and done well, keeping their most cherished traditions and prospered but instead the Collier years crippled them forever. Thank you, FDR!

    The Rez is an excellent example of the deadly effects of Socialism.

  13. Jerry 2013.12.03

    Well Jenny, here is the new mix, blame it on FDR. That is one hell of a reach there cranky, so I guess I will just have to ask, how much you gettin from your uncle Sam? You sound like a man that has the vision that is not clouded by anything social unless it is of course to assimilate your pocket. How is your Medicare working for ya? Doggone socialism anyhoo. Thank FDR for that one as well along with your Social Security check you need and enjoy.

  14. Roger Cornelius 2013.12.03


    Don't forget to add, as Lanny stated, the thoroughly socialized agricultural industry.

  15. Jim 2013.12.03

    I agree with wiken. Taking advantage of the expansion would help our counties out quite a bit. He must feel he can keep the GOP commissioners in line without it.

  16. Joan Brown 2013.12.03

    About once a day I go to a site where people can offer and receive free advice and right now there are a lot of families asking for help withe Christmas gifts for their kids. At this time most of these families are from the southern red states.

  17. Lanny V Stricherz 2013.12.03

    Mr Wiken, your post at 16:11 shows that you understand the situation completely. I never agreed with the affordable care act, because it leaves the insurance industry to continue to charge exorbitantly for our healthcare to pay their executives outrageous pay. But the law that was passed will at least begin to rein in the cost of our healthcare and the medicaid expansion will take those folk out of the emergency room and get them regular care which will be much more cost effective. As Senator Thune said a couple of weeks ago, the 16% of our national GDP for healthcare is not sustainable. He was and is correct in that assessment. But remember that is the cost before the Affordable Care Act took effect. Their is ample evidence that with the changes being made and the expansion of medicaid, the costs for our healthcare will come down.

  18. Roger Cornelius 2013.12.03

    Cranky has made several references to reservation socialism, it makes me wonder if he actually knows the definition of the word. By the strictest meaning of the word tribes are not socialistic.

    Tribes own land as well as individual members, that land is held in trust by the U.S. Government.

    There is no communal living or sharing of property to achieve an absolute balance. Tribal councils, like state government, make laws the same way the state does, however those laws require the approval of the Bureau of Indian Affairs.
    Tribes have a unique relationship with the government, most of which is was designed by the government. The Indian Reorganization Act of 1934 allowed for the creation of tribal governments.
    There are no direct payments for any type of welfare to individual tribal members by either the federal government or the tribal government.
    By law, tribes receive funding from the BIA for operations of their governments. By law and treaty, tribes receive funding for education, health, housing, etc.
    Individual tribal members that qualify for assistance receive the same services that any American in need gets.
    That list includes SNAP, WIC, Energy Assistance, housing, etc.
    Critics often complain of the government checks Indians get. Those checks are likely Social Security checks, lease checks or from land sales.
    Tribes could be better off if they were indeed socialistic, in the truest sense of the word. Now, with the conditions created by the government, the only thing that is communal is the poverty.
    Socialism is a euphemism for fear left over from the 1950's by the radical right.
    When people talk about socialism, they really need to know what their talking about.
    Cranky's comments about who owns the Black Hills is moot, it has already been determined by law and treaty.

  19. Deb Geelsdottir 2013.12.03

    Doug, I like your comment, especially the "Republican Party Hall of Ideological Partisan Nonsense." Hilarious!

    Cranky, because someone has done a thing before, such as stealing land, doesn't make it okay. It doesn't matter how often or for how long that wrong thing has been done, it's still wrong. Murder, child abuse, theft. . . Those crimes have been perpetrated throughout the history of humanity. They've never been accepted. Because someone else did it first is no excuse, unless you are under 10 years old.

    As far as conservative hypocrisy regarding red state finances --- I think it has all been said. Sigh.

  20. Jana 2013.12.03

    Ripped from the story KELOLAND wrote on the budget address."South Dakota Governor Dennis Daugaard says a nearly $70 million windfall from the state’s unclaimed property fund will allow the state to hand out higher than expected increases in the next budget."

    So he's moving the state forward on the strength of federal welfare and the lost assets of Americans that went unclaimed.

    Does anyone else see anything wrong with the narrative the Gov would like us to believe that we are fiscally a prudent state?

  21. Jerry 2013.12.03

    With all due respect to drunken sailors Jana, it sure sounds like the party just never ends with Denny and his crew of misfits at the helm of our ship of state. We have people that are hungry, cold and in need of healthcare that should be the priority. Denny is doing everything he can to take people's sight away from the awful mess he has created with denying medicaid expansion, shame on him and his crew.

  22. Douglas Wiken 2013.12.04

    The reservations are complete welfare without responsibility. Actual working socialism would be better if it provided employment.

    The fact that the Sioux slaughtered Arikara, et al doesn't make what the US Government did to the Sioux right or wrong, but it does point out the acute hypocrisy of the Sioux whining.

  23. interested party 2013.12.04

    Go back to the Old World, Doug.

  24. interested party 2013.12.04

    Vivisect South Dakota: statehood for the tribes and Mexico.

  25. Roger Cornelius 2013.12.04

    My family and extended family, as well as many friends,have been employed in some capacity for as they have lived on the reservation. No, they don't get welfare, they work. The notion that only white people work is disgusting.

    If the Arikira, et al, want to join the fight for the Black Hills settlement let them, it is not the responsibility of a white man living on or near the reservation to make that determination simply because he thinks he knows more about Indians than Indians do.

  26. Les 2013.12.04

    Unfortunately most Indians know very little about Indians anymore Roger. The wonderful attitude and wisdom of the elders is all but gone. Hearing the constant screech of racism when the uneducated say anything of a politically incorrect manner does nothing to further the cause. I love my Indian brother and will defend them to the end but sooner than later we must look forward and develop relationships that protect us from losing another generation on the Rez.
    I grew up with Indians in my home and around us. I've never known a harder working and tougher race than the Indian of those days. As with my European tribe, I can't say the same for today.

  27. Jerry 2013.12.04

    The cutting up of Dakota would be interesting interested party. There would be at least two more senators and at least one more congress person at large to go to Washington. Maybe that would be the best way forward to pass laws that would be a little more forward for the people and to show complete representation not just at election time either. Fighting for funding for schools and other infrastructure on the new states as an example, could lead the way for all. With states rights achieved, tribes could move forward to develop their destiny as a sovereign nation as well as a sovereign state combined. A little like Texas and a lot like Colorado for instance. I do not think it would take long before the new states would be paying into the federal government like the rest of the wealthy blue states do and wondering why on earth the rest of their neighbors cannot get their act together as well. Yes interested party, a most enthusiastic yes! to your idea, but why stop there? Why not add Canada into the mix as well as their are several tribal members there? Hello Puerto Rico, come on aboard Virgin Islands.

  28. joseph g thompson 2013.12.04

    Actually, the U.S. didn't take the land from anyone, it was purchased from France. The U.S. government took it from those living on it, by emanate domain, just as they do now,(most times not quite so violently). The tribes do have the Supreme Court on their side for this one and it does please me, think they should keep the fight up for the land. At some point they may be owed enough interest to buy all the land back and then some.
    PS don't know if I spelled emanate right or not but think you all understand.

  29. interested party 2013.12.04

    What a load, Les: go find me more than one Gen Y or Millennial to go out and scoop snow for an elderly neighbor while your wind chill is at -30. You and Wiken should go get a rheum.

  30. interested party 2013.12.04

    jerry: have we played poker together? you can call me larry.

  31. Roger Cornelius 2013.12.04

    Larry and Jerry,
    With those here commenting about their extensive knowledge of Indians and what is best for them, I'll offer my own hypothesis.
    Wouldn't it be great if the Sioux took the Black Hills claim settlement owed them by the U.S. in cash. Tribes have the option of accepting or rejecting the IRA government, the Sioux should reject and establish their own sovereign government and operate it as they sit fit and what works for them.
    A true Nations within a nation, a radical concept, huh?
    This would serve the Sioux well in establishing trade with any foreign government they choose.
    They would be able to tax to high heaven white men living within their established borders or escort any non-members from their Native Nation Lands as undesirables.


  32. Jerry 2013.12.04

    Sigh, mr. joseph g thompson, please read some history to kind of develop a clue. With your statement of "it was purchased from France", yikes. You lost the argument with yourself.

  33. joseph g thompson 2013.12.04

    haa haaa haaa

  34. Jerry 2013.12.04

    Sorry Larry, I have not played poker with you. You would know it too as I am not very good at it. I am a contributor.

  35. joseph g thompson 2013.12.04

    Now that I have quit laughing, Mr. Jerry, have you ever heard of the Louisiana Purchase, Thomas Jefferson, Lewis and Clark, or Sacajawea?

  36. Roger Cornelius 2013.12.04

    Geez! If you all want to start rewriting Native American history, let's also rewrite yours.
    First, abolish the U.S. Constitution, its just a piece of paper older than Indian treaties, why bother with it? It was written by white slave owners anyway. What hypocrites, talking about freedom.
    The Civil War, maybe those southerns that hold onto the belief that the south won the civil war are right.
    And don't forget the Revolutionary War, that war has no longer any implications on hoq Americans live today. It all sounded like a story book tale anyway, complete with the "they all lived happier ever after".

  37. Bree S. 2013.12.04

    Um Roger, the Republican Party was founded in 1854 by anti-slavery activists. The Jim Crow laws were a product of the Democratic Party. Historical fact, so don't try to rewrite it.

  38. Jerry 2013.12.04

    yep, heard of them. Also heard of Spain, so what? We know that Spain laid claim to all of this as well, that does not mean they "owned it". I one time laid claim to a good looking gal that I fell head over heals with. She did not feel the same and went out with another feller. I objected and when I tried to stake that claim, he made my lip very fat, and suddenly, she was not so good looking. That is what happens when you think you own something that someone is not selling. In all of the history that I have read or heard about, there is no mention of the sale of this Native land to the Spanish, so how could they sell it to the French? It looks like the French sold a pig in a poke to ole Thomas Jefferson, thanks for bringing that up.

  39. joseph g thompson 2013.12.04

    You are right Mr. Jerry, Native Americans have the basic human right of rebelling against a government that illegally purchased their land and that they finds oppressive. So go to the reservations and advocate the tribes take up arms against their oppressors, and throw them off their lands because the Louisiana Purchase was illegal . Might be surprised at who would be on your side.

  40. Jerry 2013.12.04

    I guess, I would go to before when Spain traded the land to France and then we could see that the deal was flawed at the start. So, thanks for agreeing with me and you are right, I am surprised to see you on my side.

  41. Deb Geelsdottir 2013.12.04

    So anyway, we can debate just exactly how much money the state of SD is given for doing nothing, forever and ever. But the fact remains, SD is well over on the side of Debtor States.

    How do fiscal conservatives feel about SD's Debtor State status? How do Libertarians feel about it?

    In addition, how do Liberals and Progressives feel about their home being a Debtor State?

  42. caheidelberger Post author | 2013.12.05

    Deb, this liberal feels crappy about South Dakota's moocher status. I would much rather see us able to raise our own educated citizenry and create with our own resources a quality of life that would attract more residents and workers who would generate a more vibrant economy that could create a surplus that we could use to help others.

    I am pleased that we live in a nation that is rich enough to smooth out inequalities between rich and poor states and help all citizens enjoy roads and schools and other important services. But South Dakota state government is taking advantage of that federalist generosity and not meeting its obligations to tax its own people and pay its fair share.

  43. interested party 2013.12.05

    southern dakota: bleeding the beast.

  44. Merlyn Schutterle 2013.12.05

    Since most of the "Native Americans" have European genes, Are we going to have to cut them up in pieces and only honor those pieces that are Native and move the rest back to Europe?

  45. Roger Cornelius 2013.12.05

    Merlyn Schutterle,

    Have you any idea how ridiculously stupid that is?

    Seriously, do you?

  46. Roger Cornelius 2013.12.05

    Thanks for the link Larry, that explains a lot.

    Wanting to chop up Indians and send them to Europe is just a special kind of stupid.

  47. grudznick 2013.12.05

    This Mr. Molester fellow seems insaner than more than most, but I wonder if what he is trying to say is that there are very few Indians these days who don't have some European blood in them. I expect you other fellows to rage at me about that but it's not my comment, Im just suggesting what Mr. Molester might be trying to say.

    Chopping anybody is of course insaner than anything.

  48. Roger Cornelius 2013.12.05


    Nice of you interpet this man's insanity!!!

Comments are closed.