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Daugaardonomics Failing; Let’s Try Direct Investment in Schools, Roads, Parks

David Montgomery says Governor Dennis Daugaard proposed a "modest" 2.5% increase in the FY 2016 budget because of a slow state economy:

The cautious increase was spurred by a lukewarm economy. The state's revenue is growing slowly — not enough to pay for massive new spending programs.

Instead, Daugaard offered a collection of minor initiatives... [David Montgomery, "$4.3B Proposed Budget Includes $49M in New Spending," that Sioux Falls paper, 2014.12.02].

Bob Mercer calls Governor Daugaard's economic forecast "gloomy":

Coming out of the recession in 2011 and 2012, South Dakota’s economy looked to be on a solid path of recovery. Now it seems the recovery was short. The state sales-tax growth so far in fiscal 2015 that began July 1 of this year didn’t meet the forecast set by the Legislature when the fiscal 2015 budget for state government was approved. The governor’s recommended budget for fiscal 2016 that starts July 1, 2015, estimates sales-tax revenues will grow 4.1 percent. He said that’s below average. He also mentioned that U.S. job growth on a percentage basis is now outpacing South Dakota [Bob Mercer, "Colder Economy Ahead for South Dakota?" Pure Pierre Politics, 2014.12.04].

Wait a minute. Governor Daugaard keeps telling us that if we focus on economic development, that great influx of businesses and investment and jobs will generate more revenue, which we will then be able to use to pay our teachers more and patch more potholes and bolster more bridges without raising taxes. That's the game we've played for four years, and what does it get us? Lower than expected economic growth? A measly 2% increase in education that barely keeps up with inflation, never mind make real improvements?

We can't blame Obama, can we? The U.S. economy trucked along at 4.6% growth second quarter and 3.9% third quarter. South Dakota's sales tax revenues grew by about the same amount. If Dennis Daugaard's policies are better than Barack Obama's, South Dakota should be outperforming the nation.

Are we supposed to wait for Keystone XL? TransCanada already built one awesome tar sands pipeline across our fair state five years ago. Where is the incredible uptick in public revenue from Keystone 1?

Are we supposed to wait for welfare recipient Bel Brands to ship its billionth baby cheese wheel down I-29? The state already subsidized Valley Queen and Lake Norden Cheese into existence with EB-5 money for dairies and state funds for roads and gubernatorial dairy recruitment. Why aren't we already swimming in milky riches?

The whole governmental justification for Daugaardonomics is to produce more revenue for government. But four years of Dennis Daugaard's business-über-alles policymaking has produced no discernible fiscal benefits.

Dennis, you said this plan would work. It's not working. Why don't we try a different plan?

Why don't we try investing some of our own money up front? Let's decide this session we're tired of waiting for Santa Koch and the Trickle Fairy. We're tired of waiting for some Daddy Subsidy-Bucks to move here and plant money trees outside his feedlot. We're tired of imagining we can solve all of our problems with someone else's money.

Let's decide this session that we're going to make a serious, sustained investment in our schools, our roads, and our natural resources.

  1. We're going to raise every South Dakota teacher's pay by $2,500 next year and keep going until the end of FY 2019, by which time we will have raised South Dakota teacher pay by $10,000. We will pay for it by eliminating tax exemptions for commercial fertilizer, pesticides, and certain lodging or by imposing a corporate income tax as a down payment on maintaining a well-trained workforce, not to mention a citizenry fully equipped for democracy.
  2. We will adopt in full the proposals of Senator Mike Vehle (R-20/Mitchell) and the interim Highway Needs and Financing Committee to invest $144 million in unmet highway maintenance needs. (And when John Thune, Kristi Noem, and Mike Rounds fly back from Washington, we will send the Highway Patrol to detain them at the airport and send them right back to D.C. unless and until they have passed legislation to save the federal Highway Trust Fund.)
  3. We will defund the Future Fund and the entire Governor's Office of Economic Development and reassign every dollar and every FTE to the DENR and the GF&P. Those funds and staff will be used to allow DENR to step up enforcement of existing permits and regulations and to help GF&P keep our parks beautiful and accessible.

Investing immediately in our schools, our roads, and our natural resources isn't any more radical than inserting government into the free market to pick winners and hope they reciprocate with trickle-down economics. Investing in good teachers, solid bridges, clean water, and nice parks can't hurt South Dakota. Plus, such investments in public goods are exactly the kind of work government is supposed to be doing (read your Adam Smith, you commies).

Let's just try it, seriously, for four years. January 2019, we look around and see if South Dakota has gone up in flames. We see if we still have a teacher shortage. We see if Bel Brands and Gehl and Citibank have left (on our really smooth roads and stable bridges). We see if Minnesotans are throwing eggs at our Mall of America booth to protest our clean water and nice parks.

And if we don't like the looks of government prioritizing its proper Adam Smithian role of investing in public goods, we can go right back our centrally planned, crony capitalist Do-Guard-Your-Profits-onomics.

Legislators, who's game? You can make that your agenda now... or I can just save that up for our Democratic gubernatorial candidate's platform in 2018.


  1. Tim 2014.12.04

    Daugaard and this legislature do not know how to think past what they are doing now. South Dakota is going down the same road as every other red state in the country and they don't know how to stop it. They refuse to even listen to "those damn liberals" and because the voters keep buying into republican BS they won't force a change at the ballot box.

  2. Steve Sibson 2014.12.04

    South Dakota's governmental revenues are growing at rate that is about double the rate of inflation. And that is called "modest"? We are being jacked around to justify even faster revenue growth for government. And the money is being used to feed the system of legal corruption.

  3. 96Tears 2014.12.04

    The clown car we call the S.D. Legislature does not come to Pierre to think, listen, share and act boldly. They just wait for their orders from the 2nd Floor and make it look like there might be a few independent thinkers on the 3rd Floor. I checked the list of new legislators and could see the brain drain continues.

    Maybe Joop Bollen could become a fourth branch of state government. He's got hundreds of millions to play with.

  4. caheidelberger Post author | 2014.12.04

    96, I keep hoping we will see some outbreak of intellect and courage from the Legislature, maybe even from within the Republican ranks. There must be ambitious, civic-minded Republicans who get tired of being told to shut up and follow the party line. There must be Republicans who get tired of mediocrity and would love to put their mark on South Dakota by doing something big and awesome rather than just bolstering party mythology. Where are those Republicans?

  5. 96Tears 2014.12.04

    That's the crying shame of it all, Cory. Not a single one of them has enough spine (or intellect) to lead them out of the cesspool of corruption and amorality that controls their souls. They elected a crime boss to the U.S. Senate. They yesterday conspired to cover it all up by ignoring the mountain of evidence and blaming this state's worst scandal on a dead guy. Who died under very suspicious circumstances. They seem afraid of the partner who is still alive and who's pocketing millions outside the law.

  6. Deb Geelsdottir 2014.12.04

    "Santa Koch and the Trickle Fairy . . . Daddy Subsidy-Bucks"


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