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Mercer and Janklow as Crazy as Me? $120 Million Doable for Better Teacher Pay?

I have a three-point plan for South Dakota to invest in schools, roads, and natural resources instead of the failed voo-Daugaard-onomics of the last four years. Finding money for teacher pay, road repairs, environmental protection, and parks may sound like a fiscal moonshot, but Bob Mercer notes that Bill Janklow managed a moonshot during his third and fourth terms:

Twenty winters ago, Gov.-elect Bill Janklow pushed forward on his campaign promise to roll back property taxes by 30 percent from their 1994 levels.

Janklow and the Legislature delivered the first $80 million during his first year in office.

They needed the better part of his next seven years in office to find, here and there, the final $40 million [Bob Mercer, "Could We Find $120M a Second Time?" Aberdeen American News, 2014.12.06].

$120 million—funny that Bob would pick a historical figure that just happens to fit with some estimates of the EB-5 money Joop Bollen diverted from state coffers.

Mercer suggests we find our inner Janklow and apply some moonshot thinking to the almost universally recognized problem of low teacher pay. Mercer suggests we start by sending the surpluses from the K-12 state aid budget ($5.9 million last year, $6.9 million this year) straight to teachers as bonus checks instead of redirecting those surpluses to other general fund lines.

Governor Dennis Daugaard found $127 million in cuts when he wanted them (although it turned out he could have satisfied his goal of eliminating the Rounds deficit with just $55 million in cuts). Can he find $120 million to solve problems that his austerity has made worse?

Related: John Tsitrian can find five times the Mercer/Janklow amount in South Dakota's $600 million in sales tax exemptions.


  1. grudznick 2014.12.07

    Mr. H, I think your idea to resurrect the whole E-B5 program and have our government run it and use those fees as revenue is a great idea. I would only add to your idea that our government should increase the fees we charge these rich foreigners. They can afford a lot more to buy a green card and migrate to California.

    You may be onto something here, if our legislatures agree. But you can't beat on Mr. Benda any more for doing what you now want to do. I say we do it. Double the fees on these rich bossturds.

  2. grudznick 2014.12.07

    If we double the fees would not the legislatures get $240,000,000 to play with and give good teachers raises? That's a good raise in my book.

  3. Tim 2014.12.07

    Just read John's post, almost 600 million, that would help.

  4. Owen 2014.12.07

    this is about priorities and Daugaard's priorities are not education

  5. grudznick 2014.12.07

    Owen, the legislatures set priorities. If they said we will run an E-B5 program and funnel that money from rich Chinese and French cheese people into paying raises to good teachers, then that is what would have to happen. Mr. Daugaard could not ignore these laws and use the money for roads or Medicaid expansion he would have to give the money directly to good teachers.

    E-B5 is good for teachers!

  6. Tim 2014.12.07

    Grudz, the state legislature doesn't do anything without Daugaard's approval. The Governor runs things in SD, has been that way since republicans took over.

  7. Bill Fleming 2014.12.07

    Here is the usual set of of arguments on why taxation of advertising services is not really a workable idea.

    No doubt there are similar arguments in the other industries. No such arguments really exist in terms of a state income tax other than not very many people want to pay it. LOL

  8. grudznick 2014.12.07

    Then I guess you fellows need to get out and have more people vote. I, for one, think the legislatures are full of insaner people who vote for crazy things and you will see that this year. Mark my word, Mr. Tim, this year the legislatures will really come off the rails and probably in ways you libbies won't like much. This is the year they really flex that muscle. Do some stuff that is insaner than most.

  9. grudznick 2014.12.07

    Bill, I have always admired you for being a richer fellow than most and willing to pay your share. Flat tax. No deductions.

  10. Tim 2014.12.07

    Grudz, I believe you are right, and I don't think it will just us libbies that are pissed. You never know, they might even crap in your Post Toasties.

  11. grudznick 2014.12.07

    Mr. Tim, I don't eat post toast. Although once I had a sandwich where they took bread, toasted it with holes cut in in and filled it with eggs and sausage and slathered it in gravy and that was pretty darn good.

  12. Owen 2014.12.07

    Grud Daugaard would never let the legislature do that. EB-5 program pretty much gone anyway.
    Daugaard and Republicans don't really care about education-except the bare minimum

  13. Donald Pay 2014.12.07

    As I recall, the property tax reduction in the 1990s was mostly accomplished through a change in the education funding formula that Rep. Dan Dryden at the time (he was the business manager for the Rapid City Area School District) predicted would devastate education. Dryden was right.

    Janklow later in his administration would try to claim the changes Mercer refers to amounted to a vast increase in funding for education, and were not property tax reduction. Janklow, of course, always wanted to claim he did everything for everyone, and some folks were fooled. I wasn't. He and I engaged in some back and forth emails and a few opinion pieces about the issue.

    At least Mercer is being honest, finally, about the Janklow maneuvers. The 1990s changes in the school aid formula were just a way to funnel property tax reduction through school budgeting processes. This formula, with a few minor changes, is still operating in SD to the detriment of education.

  14. grudznick 2014.12.07

    Mr. Pay, you are leaving out all the things about how Mr. Mercer knows all about and was behind much of these machinations because he was Janklows Secretary of the Press. Plus, you left out where Mr. Daugaards plan for a nuclear waste dump comes into play here. Because I know somewhere there in your hatted head this is all about secret nuclear waste dumps. By Igloo.

  15. rollin potter 2014.12.07

    With all this complaining about low wages, how is it that so many teachers are able to retire and move out of the sate at the age of 55?

  16. grudznick 2014.12.07

    Mr. Potter there is a lot of whining going on without a lot of evidence. I am concerned about how many garbage men and construction workers are underpaid here, just as I am concerned and deeply so about how many teachers are underpaid. But I want to see my tax money go to the good teachers, just as I want my construction money to go to the good contractors I hire. This is why the teachers union needs to be disbanded and then some good teachers step up with ideas.

  17. Nick Nemec 2014.12.07

    They retire at 55 because they've put in their 30 years and under the rules of the state retirement system they can. They move out of state and take another job in a state where teachers are paid more.

  18. Patrick Duffy 2014.12.07

    I thought readers were required to post under one's own name.

  19. Moses 2014.12.07

    How about using that billion dollar trust rainy day fund, how much is enough,Thank you south South Dakota for sending my kids out of state,

  20. Tim 2014.12.07

    Moses, my kids also were forced out of SD to make a decent life for themselves. 30 years of failed republican policy is responsible for this as far as I'm concerned.

  21. caheidelberger Post author | 2014.12.07

    Sorry, Patrick: not absolutely required, but I much prefer it, and accord more respect to fully nymous comments.

  22. leslie 2014.12.07

    grudz soundin alot like sibson this day.

  23. leslie 2014.12.07

    the point ... grudz is that $120 million may not be much for some one-person like joop, or an unindicted rounds; but for a red lil' state with 48,000 people w/o health insurance, no mineral tax like wyo., and last in teachers wages in the nation; it is a pretty big deal to let it slide for politics-sake. you on the other hand waste time looking for the slacker in the teacher, union or welfare recipient. they don't do enough for their money, right? tough guy!

  24. Donald Pay 2014.12.07

    Grudz: I don't know if Mercer knows about these "machinations," as you call them. I know that the changes to South Dakota's school funding formula were similar to what a number of other states (Oregon, Wisconsin) were doing at the time. States were adopting similar strategies for property tax reduction through the education formula with slight variations from state to state. It's not as if Janklow came up with this plan himself, but if you don't know the entire history, you might, like Mercer, think it came out of the genius mind of Bill Janklow.

  25. grudznick 2014.12.07

    Mr. Janklow was a thinker, indeed. Probably not every one of his thinkings were the best idea in the end, but many probably were. This is likely one.

  26. Roger Elgersma 2014.12.07

    Refering to Janklows numbers shifting only gives credibility to shifty politics. He took a realestate tax that was based on 80% of market value, reassessed it at full value which was a 25% raise and then dropped it 20% which was no cut at all. IF we talk about real tax sources for a real increase in teacher pay would be worthwhile.

  27. Patrick Duffy 2014.12.07

    Grudznick sounds unbalanced.

  28. Donald Pay 2014.12.07

    Well, Grudz, the point is that the 1990s "reform" of the school funding formula was not in any way related to education. It's purpose was property tax reduction which was paid for, ultimately, by decreasing services to K-12 students and lack of adequate wage increases for education staff.

  29. John Tsitrian 2014.12.08

    Fleming, just did a very quick scan on state sales taxes for advertising and find that both CT and PA impose taxes on at least some of the services provided by ad agencies--SD's exemption is sweeping and apparently exempts every aspect of the goods and services provided by advertising agencies. Another quick scan shows me that CT pays teachers $70k/year, PA pays them $64/year, both of them way above the national average of $57k/year.

  30. Bill Fleming 2014.12.08

    John, interesting. Do CT and PA have a state income tax? Is their tax on ad services specifically allocated to paying teachers?

  31. John Tsitrian 2014.12.08

    BF, I'm guessing yes and no, respectively. My point is that taxes on advertising services don't necessarily lead to the doomsday scenario that the Ohio study you posted predicts. In fact, I'd say that study is ridiculous. You advertisers derive as much from the public sector as everybody else and I don't get why consultative services, tangible or intangible, are justifiably exempted from having to pay for the costs of public support for the infrastructure that you use. Nothing personal, Bill, but there's an awful lot of freeloading going on in SD's sales tax-exemption list.

  32. Bill Fleming 2014.12.08

    John, the ad tax rules in SD can be kind of confusing. Most of it has to do with whether or not the advertising message is placed in 'paid media'.

    Here's an example. If you have an agency make a TV ad for you and also buy the media space to run it, there is no sales tax due.

    If instead, you just have the agency make your ad and you buy the media yourself, the agency has to charge you sales tax.

    Conversely, if you have an agency do a brochure for you, all of the work the agency does for you is taxable, as well as the printing cost. Like I said, it can be confusing.

    I think the people who would fight an ad tax the hardest would be the media. In our experience, we've never had a client who objected to paying sales taxes on our services when the State's rules tell us we're supposed to.

  33. john tsitrian 2014.12.08

    Thanks, Bill. The exemption is worth $7 million/yr. I've never understood the basis for exempting advertising from sales taxes.

  34. Moses 2014.12.08

    Maybe do nothing is waiting for the crop prices to fall than mom will have to go back and get her degree to make ends meet .

  35. Bill Fleming 2014.12.08

    I hear you, John. If you are going to research it, I suggest you start with the billboard companies (Lamar and Epic). Then talk to the publisher of the Rapid City Journal and maybe someone at KOTA.

    I'll be happy to show you how we do our best to comply with the State's rules, but as far as where the exemption came from in the first place, I'm not really sure.

    Seems like maybe the 'double taxation' argument may have been one of the first. (Advertising as part of the COG, with the final product being taxed at point of sale). I've also heard some 1st Amendment arguments about not taxing 'free' speech (usually followed by some eye-rolling and a few chuckles.)

  36. John Tsitrian 2014.12.08

    Gotcha Bill. It's a scam and should be subject to review.

Comments are closed.