David Montgomery left South Dakota last December for a better job in the Twin Cities. He now gets to report on Gallup numbers showing Minnesota's better rate of uninsured people:

At the beginning of 2014, just 9.5 percent of Minnesotans lacked health insurance, the fourth-best rate in the country. As of the start of 2015, that uninsured rate is now 7.4 percent, 2.1 percentage points lower.

...A previous study, conducted between September 2013 and May 2014 by University of Minnesota researchers, also showed a drop in Minnesota's uninsured rate. It used a different methodology and found the uninsured rate falling from 8.2 percent to 4.9 percent [David Montgomery, "Minnesota's Uninsured Rate Falls, Says Survey," Pioneer Press, 2015.02.24].

The uninsured rate in South Dakota dropped from 14.0% to 12.7%. Minnesota embraced the Affordable Care Act by implementing their MNSure state health insurance exchange and expanding Medicaid. South Dakota has taken neither action.

Montgomery posits no causation, but Minnesota's Democratic leaders want to give the ACA and MNSure the credit. Those DFL legislators are probably right. Take a look at this graph from Gallup showing the nationwide uninsured rate:

Gallup US uninsured 2014

Climb, climb, climb, fully enact ACA—plummet.

Then look at the Gallup state-by-state uninsured data on which Montgomery bases his report:

Gallup uninsured by state 2014

The uninsured rate went down everywhere in 2014, but the statisticians at Gallup don't hesitate to name the spade that's filling this hole faster:

While a majority of Americans continue to disapprove of the Affordable Care Act, it has clearly had an impact in reducing the uninsured rate in the U.S., which declined to its lowest point in seven years by the last quarter of 2014. This trend could be poised to continue, as 55% of Americans who remain uninsured plan to get health insurance rather than pay a fine.

States that have implemented two of the law's core mechanisms -- Medicaid expansion and state health exchanges -- are seeing a substantially larger drop in the uninsured rate than states that did not take both of these actions. Consequently, the gap in uninsured rates that existed between these two groups in 2013 nearly doubled in 2014 [Dan Witters, "Arkansas, Kentucky See Most Improvement in Uninsured Rates," Gallup, 2015.02].

The ACA is working. South Dakota should get over its Obamaphobia and help the ACA work.

20 comments

The New York Times reports that South Dakota is #4 among the "Terrible 10"... for regressive state and local taxes. According to data from a new report from the Institute on Taxation and Economic Policy, the percentage of income that non-elderly residents in the lowest 20% income category pay in state and local taxes is 9.5 percentage points more than the percentage of income paid by the wealthiest 1%. Only Washington, Florida, and Texas have a larger gaps between their tax burdens on poor and rich.

Here's how the state and local tax burdens stack up on income brackets in South Dakota and the surrounding states:

State/Local Tax
Burden on...
SD MN IA NE WY MT
Lowest 20% 11.3% 8.8% 10.4% 10.9% 8.2% 6.1%
Second 20% 9.1% 9.7% 10.2% 9.9% 6.9% 6.1%
Middle 20% 7.7% 9.6% 9.7% 10.3% 5.9% 6.4%
Fourth 20% 6.9% 9.7% 9.5% 9.3% 4.7% 6.1%
Next 15% 5.5% 8.5% 8.4% 8.1% 4.0% 5.8%
Next 4% 3.8% 8.4% 7.0% 7.6% 2.7% 5.2%
Top 1% 1.8% 7.5% 6.0% 6.3% 1.2% 4.7%

South Dakota offers lower tax burdens than Minnesota on everybody but the poor. Montana imposes lower tax burdens than South Dakota on everybody but the top 20%. Minnesota, Montana, and Iowa offer relatively less regressive taxation schemes, keeping the tax burden roughly consistent for most income brackets and offering the least differentials between the burdens on the bottom 20% and the top 1%.

Note that none of the states above show a truly progressive tax system, in which the percentages would get larger as we move down the chart into higher income brackets.

Note also that all of the ideas we've heard so far for improving public goods and services in South Dakota—fuel taxes for roads, sales taxes for teacher pay—are regressive taxes, which will take a larger percentage of lower-income folks' income.

21 comments

Thousands of South Dakotans are paying the price for Governor Dennis Daugaard's and the SDGOP's intransigent opposition to expanding Medicaid under the Affordable Care Act. We are all paying the cost of turning away hundreds of millions of dollars of economic stimulus that the ACA Medicaid expansion would bring our state.

Governor Daugaard is imposing additional costs on the thousands of South Dakotans who are buying insurance on the federal health insurance exchange. States could go four ways to set up ACA marketplaces: active purchaser, open clearinghouse (Minnesota's MNSure), federal partnership, or totally federal (the South Dakota model, in which we do nothing and leave all the work to Uncle Sam).

A new study in Health Affairs shows that the Minnesota model, the state-run clearinghouse, is offering customers lower premiums than the federal exchange:

Using publicly available premium data and other sources, Health Affairs found state-based clearinghouse models had lower premiums compared with active-purchaser states, partnership states and federally-facilitated states. The journal found no difference between federally faciliated exchanges and federal partnership exchanges.

Policies from all exchanges come in four levels, with the lower ones costing less in monthly premiums with higher cost-sharing when someone seeks medical care. The lowest is bronze, followed by silver, gold and platinum, which Health Affairs didn’t score because of inconsistencies in availability.

The lowest-cost bronze plans in state-based clearinghouses average $157.53 per month versus $179.49 in active-purchaser states; $196.92 compared with $225.37 for the lowest-cost silver plans; $205.30 versus $245.27 for the second lowest silver plan; and $233.96 compared with $266.91 for the lowest-cost gold plan.

Looking at differences between clearinghouse states and federal exchange states, the lowest-cost silver plan was $196.92 compared with $229.87 in partnership exchanges and $224.02 in federally facilitated exchanges [Chris Kardish, "Which health Exchanges Have the Lowest Premiums?" Governing, 2015.01.07].

Generally, the Minnesota model saves customers over $300 a year compared with the South Dakota surrender.

Governor Dennis Daugaard may think the Affordable Care Act is a lemon, but he could try a little harder to make some lemonade.

24 comments

Governor Dennis Daugaard's new Build Dakota Scholarship for vocational-school students is a corporate welfare program whose primary aim is addressing a workforce shortage and providing select South Dakota industries with a captive labor pool. It will provide 300 scholarships over five years out of a total current vo-tech enrollment of about 6,100.

Democrats in Minnesota's Legislature are proposing free tuition for everyone who wants to attend Minnesota's two-year colleges and technical schools. That proposal mirrors the Tennessee Promise, in which Tennessee is using lottery money to cover tuition to its associate-degree programs:

It will provide students a last-dollar scholarship, meaning the scholarship will cover tuition and fees not covered by the Pell grant, the HOPE scholarship, or TSAA funds. Students may use the scholarship at any of the state’s 13 community colleges, 27 colleges of applied technology, or other eligible institution offering an associate’s degree program. While removing the financial burden is key, a critical component of Tennessee Promise is the individual guidance each participant will receive from a mentor who will assist the student as he or she navigates the college admissions process. In addition, Tennessee Promise participants must complete eight hours of community service per term enrolled, as well as maintain satisfactory academic progress (2.0 GPA) at their institution [Tennessee Promise, "About," downloaded 2015.01.09].

Instead of tying graduates to in-state employers and introducing grit in the labor market, Tennessee will ask its scholarship recipients to pay their communities back while they are in school with a simple service requirement.

President Obama likes the Tennessee Promise. He's advocating a national version of the plan, which could serve nine million Americans.

Minnesota Republicans' initial response: class warfare!

Senate Minority Leader David Hann, R-Eden Prairie, was similarly critical of the Democrats’ proposal for free tuition.

“At this point, we have a lot of questions,” Hann said. In particular, he said the programs lack a means-testing mechanism to ensure they are not abused by higher-income Minnesotans [Richard Lopez and J. Patrick Coolican, "Free College vs. Tax Cuts as Visions Contrast at Capitol," Minneapolis Star Tribune, 2015.01.08].

Republicans are hilarious: hand out general scholarships, and the rich are untrustworthy, abuse-minded miscreants! Hand out tax breaks, and the higher-income citizens who run businesses can be trusted to pass on great benefits to the trickled-upon masses (tax breaks are a highlight of the MN GOP plan for the state surplus).

And South Dakota Republicans bat not one eyelash at the possibility that higher-income South Dakotans might take advantage of vo-tech scholarship recipients who are required to work in South Dakota for three years by paying them lower wages than market forces would otherwise demand.

8 comments

Governor Dennis Daugaard opens the 2015 Session of the South Dakota Legislature on Tuesday, January 13, with his State of the State Address. Governor Mark Dayton of Minnesota delivered his inaugural address Monday in St. Paul, the day before the opening of the Minnesota Legislature.

Governor Daugaard, please plagiarize this speech:

But are all of our students learning what they will need – to find good jobs and achieve success in the world that awaits them? If we’re going to improve people’s lives in our state, we have to improve their educations. We have to create a State of Educational Excellence.

How? By investing in it.

There’s a big difference between spending and investing. Spending is for now. People spend money to buy what they need or want right away.

Investing is for the future. People invest money now to produce future benefits and rewards.

Wise financial management requires understanding this difference. And striking a proper balance between them.

In the coming months, we will make important decisions about spending or investing a projected state budget surplus of one billion dollars. We could spend it to provide goods and services for more people. We could spend it to provide tax cuts for some people.

I recommend that our top priority be to invest it in a better future – first and foremost, by investing it in Excellent Education. This means elevating our citizens’ educations from good to excellent.

And making that educational excellence available to everyone.

...for the sake of our state’s future, I will dedicate the next four years to regaining our state’s position as a national and global leader in education excellence [Governor Mark Dayton, prepared text, second inaugural address, St. Paul, Minnesota, 2015.01.05].

Governor Dayton espouses some policies I oppose, like year-round school. But he's right on target with the principle that education comes first.

Enough with Governor Daugaard's trickle-down fantasy that if we pour our resources into favors for business, someday we'll see economic growth that will translate into more tax dollars to invest in education. That's like going to the racetrack and betting on the horses while telling yourself that if you win, you'll put your winnings back in your IRA. That policy doesn't work. Let's adopt Governor Dayton's philosophy of investing now, investing early, and investing directly in kids, the way government should.

39 comments

Creighton University's Heider College of Business has issued its December 2014 Mid-America Business Conditions Index. Dr. Ernie Goss and his Creighton associations survey purchasing managers in Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota. They index responses on a scale of 0 to 100; under 50 means a sluggish economy over the next three to six months, while over 50 means a growing economy.

The regional index has been beating 50 since January 2013. Let's look at how South Dakota compared to the region and to Minnesota in 2014:

Overall Index, Mid-America Business Conditions Index, 2014 for region, South Dakota, and Minnesota

New Orders, Mid-America Business Conditions Index, 2014 for region, South Dakota, and Minnesota

Production, Mid-America Business Conditions Index, 2014 for region, South Dakota, and Minnesota

Delivery Lead Time, Mid-America Business Conditions Index, 2014 for region, South Dakota, and Minnesota

Employment, Mid-America Business Conditions Index, 2014 for region, South Dakota, and Minnesota

Inventories, Mid-America Business Conditions Index, 2014 for region, South Dakota, and Minnesota

 

(The inventories index gauges inventories of raw materials and supplies. Larger inventories mean purchasing managers expect higher sales.)

On the overall MABCI, South Dakota spent most of the first half of the year looking better to purchasing managers than the regional average. South Dakota slid hard in July and finished the year just a tick below the regional overall index. On the five metrics that Goss breaks down by state, South Dakota finished ahead of the region on production and delivery lead time but below the region on new orders, employment, and inventories.

South Dakota's favorite measuring stick for economic performance and fiscal policy, Minnesota, started the year even with the region on the overall MABCI and stayed above average every month after that. Minnesota finished the year ahead of the regional MABCI in new orders, production, and inventories, close on employment, and a couple ticks below on delivery lead time.

On every metric but delivery lead time, Minnesota is beating South Dakota. Hmm... that seems like more evidence that Daugaardonomics is not working for South Dakota.

Possibly related: Minnesota lawmakers are trying to figure out what to do with a one-billion-dollar budget surplus.

13 comments

South Dakotans making minimum wage, you get a raise in ten days. Happy New Year, and you're welcome!

The Chicken Littles who warn that we heartless liberals (apparently that's 55.05% of South Dakotans) are going to hurt the poor by killing their job opportunities. Once again, Minnesota says that's not so. Minnesota's Legislature raised its minimum wage August 1. According to the latest data from the state, Minnesota added 6,600 jobs in November. The hotel and restaurant sector, where one would find a higher proportion of minimum wage jobs, added 5,000 jobs in November. These job gains continue the post-minimum-wage-raise trend of decreasing unemployment in Minnesota that I reported last month.

We should watch South Dakota's job numbers (as well as consumer spending!) closely over the coming year to see if we can discern any impact from raising the minimum wage. If Minnesota's example holds, we should see better economic outcomes... and we should make sure the voters and not the Governor get the credit.

2 comments

Here's the tough call of the morning. Jonathan Ellis reports that South Dakota implemented a new rule on September 1 requiring Medicaid patients to get authorization from the state to seek medical treatment more than 50 miles from South Dakota (with the exception of folks headed to Bismarck for service, which makes perfect sense for folks all along lonely Highway 12). The rule is a reasonable cost check, used by many states as well as private insurers. The state hasn't been wielding it too avidly: Ellis says in the first two months of the rule, the Department of Social Services denied only 14 of 483 requests for out-state care.

Enter Nicole Cook, 31, mom of six, from Madison:

Cook originally went to Mayo in August after repeated doctor and hospital visits in Madison and Sioux Falls, she said. She was rapidly losing weight, was exhausted and in pain.

Testing at Mayo determined that she has a lung tumor, scarring in her lungs, bone lesions and other health problems. She was scheduled to return to Mayo in October with the hope that doctors there could find a cause for her maladies.

But this time, she was unable to go because the Department of Social Services would not authorize payment for the visit [Jonathan Ellis, "Medicaid Rule Drives Woman from S.D.," that Sioux Falls paper, 2014.12.01].

Cook says the state says South Dakota doctors can provide the care Cook needs. But South Dakota doctors evidently couldn't provide the diagnosis Cook needed. Nicole's husband Ryan says on his fundraising page that Nicole's local doctor actually dropped her, saying her case is too complex for him. One can thus understand her lack of confidence in her local docs and her preference to seek treatment from the Mayo docs. According to Ellis, Cook's Sioux Falls doctors are recommending Mayo for treatment.

But who gets to pick the piper: the patient or the payer? Cook or us, the taxpayers?

Cook is relieving us of that choice. She is moving to Minnesota and applying for Medical Assistance. As far as I can tell, Minnesota has no rules against moving primarily to qualify for public benefits. Minnesota's residency rules say that once she's physically present in the state and made clear her intention to stick around, she can qualify.

So how do we feel, South Dakota, about driving away someone who needs help?

p.s.: Cook's fundraising page shows about $4,800 raised toward a $150,000 goal. Please don't tell me that private fundraising is an effective way to pay for everyone's medical bills.

50 comments

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