Here’s the latest rumor about why the Daugaard administration still hasn’t appointed an eighth member to the state Game, Fish and Parks Commission. The difficulties finding a West River Democratic landowner — state law has precise rules balancing the commission’s geographic, political and landowner statuses — led the governor’s folks to put their search on a semi-hold. Now they’re busy on it again because they’ll have a second seat to fill as Susie Knippling’s second and final term ends next month. Knippling, from Gann Valley, is the current chairwoman. With two seats available, the rumor goes, there will be more opportunities to mix and match in order to reach the legal requirements. The long-term vacancy has been for the seat previously held by Bill Cerny, a Democratic landowner who lived in the Burke area at the time. The conscientious Cerny stepped down 13 months ago after he and his wife, Pat, left the farm and moved to Yankton.
After server problems the past two days, the talented tech crews of the Aberdeen American News and Schurz Communications have PPP aka Pierre Review back up and running. Thanks to them and thanks to you for your patience.
The representatives and senators who serve on the joint committee for retirement laws sit down this morning with the board of trustees, administrators, actuaries and investment office leadership to discuss the financial status of the South Dakota Retirement System. When the talk turns to 2014 legislation, there will be a new topic: Folding the old state cement-plant retirement fund into SDRS. In his budget speech Tuesday, the governor proposed using more than $5 million of one-time funding to fill the gap in the cement-plant fund. Once it’s whole, then it could be combined with SDRS, which at last look was back above 100 percent funding again. The cement-plant fund fell behind and, because it’s a dead system without any revenue coming in aside from investment earnings, it hasn’t been able to catch up without the Legislature’s funding help. These two moves proposed by Gov. Dennis Daugaard would take care of both issues. SDRS administrators already oversee the cement-plant system, so this isn’t a reach.
The state Council of Juvenile Services won’t meet Wednesday, Dec. 4, after all. Spokesman Michael Winder said this morning that weather conditions led to the decision to cancel. The meeting was set for Oacoma. The council’s next regular meeting will be in March.
Meanwhile the South Dakota Lottery Commission will fit in one final meeting for 2013. The lottery office said this morning the commission will meet next Tuesday, Dec. 10, starting at 10 a.m. in room 412 of the state Capitol. This promises to be an important gathering in the wake of the planning and strategy meeting held last month regarding video lottery.
NEW: The state Banking Commission will meet by teleconference Wednesday, Dec. 4, also because of weather. The teleconference will start at 10:30 a.m. and will be open to the public at two locations: The Division of Banking conference room at 1601 N. Harrison; and the Sioux Falls office at 5100 W. 51st St.
The call by state Rep. Kathy Tyler, D-Big Stone City, for an independent financial investigation of the EB-5 immigrant investor program in South Dakota raises some important questions. First, she wants the Legislature to declare a special session for Dec. 30-31 to authorize the investigation. That is 27 days from today. The Legislature is scheduled to open its 2014 regular session on Jan. 14. Can the investigation vote wait 16 more days until legislators are in regular session?
Second, the Legislature already has the power to conduct a financial investigation through its own agency, the Department of Legislative Audit. By calling for an independent investigation, she is essentially saying Legislative Audit isn’t sufficiently capable. Third, there are the costs of a two-day special session and hiring an independent investigation team. That team likely would need to come from outside South Dakota and be without any ties to South Dakota. If state government’s RFP process is followed, months could pass before the firm is selected and work begins. Legislative Audit on the other hand could start work as soon as the word was sent.
Fourth, what is the independent investigation supposed to find? The state contract with SDRC Inc. of Aberdeen specified that certain splits of revenue be placed in three state accounts. The state commissioner of economic development, Pat Costello, demanded the money in those accounts be turned over to state government when he terminated the contract with SDRC in September. State government should have received in excess of $2 million, based on the balances in the three accounts at the time. A state audit reaching back to 2009 could determine whether SDRC was placing the correct amounts at the proper times into those accounts and whether money spent from any of the accounts was appropriate. The Governor’s Office of Economic Development was supposed to receive reports from SDRC on a regular basis.
Knowing the past work of the Department of Legislative Audit, that level of work is certainly within the agency’s capability. On the same point, South Dakota legislators and the general public would learn how much money was being collected by SDRC in fees charged to immigrant investors. We also would learn what SDRC was paying in expenses to others involved in the EB-5 business and what SDRC was paying to its own personnel each year and to any others involved in its operations. That information would become available if auditors looked specifically at the expense fund, one of the three accounts established under the state contract.
The Legislature by state law has subpoena and summons powers, with witnesses facing Class 2 misdemeanor penalties for failure to appear. Further, the Department of Legislative Audit has subpoena and summons powers and refusal is treated under state law the same as contempt of court. In other words, the Department of Legislative Audit likely has more authority in an investigation than would an independent outside firm hired under a consulting contract.
The Legislature has a very big and very powerful set of weapons if lawmakers choose to use it, and there’s no need for a special session to move those weapons into place for an EB-5 probe. All it takes is a vote by the Legislature’s Executive Board. State law gives that board the authority to direct the activities of the state auditor general, who is in charge of the Department of Legislative Audit. It’s easy to call a news conference and issue a news release and make headlines. It’s also easy to read state law and see how much power the Legislature already has — and to also see there’s no need for a special independent investigation or a special session. If the Executive Board refuses, then a vote by the full Legislature would be the next step.
GOED meanwhile has already requested that Legislative Audit look at its books, with Costello expecting a report by Jan. 24, 2014. If that report doesn’t go far enough, the Executive Board or the full Legislature would have the opportunity to direct Legislative Audit to go back in and look deeper at GOED, SDRC and the three accounts established by legal contract. The audit contract, signed by Auditor General Marty Guindon on Nov. 27, is specific but also acknowledges there won’t be an examination of all transactions and therefore “there is a risk that material misstatements or noncompliance may exist and not be detected by us…” Depending upon what’s found in this first round, a second round might or might not be necessary to satisfy legislators.
Regarding the post below about the financial package for the new SDSU football stadium, here’s another piece to the puzzle. Ticket prices will rise to $27 from the present $20 and “demand game” tickets will increase to $47 from the present $40, according to the information presented to the state Board of Regents. The regents’ meeting this week is at the South Dakota School of Mines and Technology in Rapid City.
The latest financial package submitted to the state Board of Regents by South Dakota State University for the proposed new football stadium still carries a $65 million price tag. The plan from SDSU now calls for students to pay an extra $1.75 per credit to help pay for the stadium. That’s about $487,000 annually, according to the information prepared for the regents’ meeting later this week.
The SDSU discussion appears scheduled for Wednesday afternoon. That’s when we’ll see what the regents think about hiking another student fee at the same time they’re asking the Legislature to give the universities an extra $6 million for the next academic year so they can freeze tuition and fees for undergraduate resident students.
The SDSU Students’ Association leadership adopted a resolution supporting the project and calling for the students to be engaged in the project. The resolution also says the normal process should be followed for a general-activity student fee increase if one is needed for the project. You can read the whole set of documents on the Internet here:
As we look to the governor’s annual budget speech Tuesday, here are some sets of key data pulled together from various state Department of Revenue reports. These are pre-recession, recession, post-recession and current-condition numbers regarding South Dakota’s economy.
First, a summary of fiscal-year taxable sales year by year:
FY 2013 vs. FY 2012 – Up 3.69 pct.
FY 2012 vs. FY 2011 – Up 2.9 pct.
FY 2011 vs. FY 2010 – Up 9.2 pct.
FY 2010 vs. FY 2009 – Down 1.5 pct.
FY 2009 vs. FY 2008 – Up 1.8 pct.
Next, a summary of contractor excise tax revenue year by year:
Fiscal 2013 contractor excise taxes $84.5 million
Fiscal 2012 contractor excise taxes $83 million
Fiscal 2011 contractor excise taxes $76.4 million
Fiscal 2010 contractor excise taxes $61.1 million, down $9.2 million from FY09.
Third, a summary of tourism tax revenue year by year:
Fiscal 2013 tourism taxes $10.1 million
Fiscal 2012 tourism taxes $9.5 million
Fiscal 2011 tourism taxes $9.5 million
Fiscal 2010 tourism taxes $8.4 million
And here are the monthly taxable sales numbers, year to year, dating back to pre-recession:
October – Up 7.16 pct.
September – Up 6.39 pct.
August – Up 7.64 pct.
July – Up 3.56 pct.
June – Up 5.41 pct.
May – Up 1.32 pct.
April – Up 1.79 pct.
March – Up 0.04 pct.
February – Up 5.4 pct.
January – Up 3.7 pct.
December ’12 – Up 3.3 pct.
November ’12 – Up 6.3 pct.
October ’12 – Up 0.1 pct.
September ’12 – Up 4.3 pct.
August ’12 – Up 6.1 pct.
July ’12 – Up 5.9 pct.
June ’12 – Up 8.9 pct.
May ’12 – Down 0.7 pct.
April ’12 – Up 9.2 pct.
March ’12 – Up 9.5 pct.
February ’12 – Up 6.8 pct.
January ’12 – Up 3.2 pct.
December ’11 – Minus 9.1 pct.
November ’11 – Up 5.1 pct.
October ’11 – Up 6.2 pct.
September ’11 – Down 1.9 pct.
August ’11 – Down 1.7 pct.
July ’11 – Up 3.4 pct.
June ’11 – Up 6.3 pct.
May ’11 – Up 12.8 pct.
April ’11 – Up 5.4 pct.
March ’11 – Down 0.1 pct.
February ’11 – Up 7.1 pct.
January ’11 – Up 12.5 pct.
December ’10 – Up 25 pct.
November ’10 – Up 7.8 pct.
October ’10 – Up 8.7 pct.
September ’10 – Up 12.1 pct.
August ’10 – Up 9.8 pct.
July ’10 – Up 2.2 pct.
June ’10 – Up 1.9 pct.
May ’10 – Up 6.0 pct.
April ’10 – Up 4.6 pct.
March ’10 – Up 6.7 pct.
February ’10 – Down 2.5 pct.
January ’10 – Down 5.2 pct.
December ’09 – Up 0.9 pct.
November ’09 – Down 5.6 pct.
October ’09 – Down 8.2 pct.
September ’09 – Down 5.9 pct.
August ’09 – Down 3.4 pct.
July ’09 – Down 2.2 pct.
June ’09 – Down 5.0 pct.
May ’09 – Down 5.6 pct.
April ’09 – Down 1.0 pct.
March ’09 – Down 5.6 pct.
February ’09 – Up 2.0 pct.
Janaury ’09 – Down 0.8 pct.
December ’08 – Down 2.6 pct.
November ’08 – Up 3.8 pct.
October ’08 – Up 9.4 pct.
September ’08 – Up 9.6 pct.
August ’08 – Up 7.4 pct.
July ’08 – Up 8.3 pct.
The Kimster, as her pops likes to call her, threw the football with a good spiral and could have been a good baseball player if she hadn’t been the only girl on her Little League team. Her real talent was in design and color, and at the age now of 21 and 364 days as of this Tuesday night, she has a neat job putting those strengths to work. Her birthday is Thanksgiving Day this year. She was born on Thanksgiving Day too. Hard to believe, but when we were at the hospital on that Thanksgiving eve, I had never before watched this TV channel called ESPN. There was some anonymous college basketball game on — the teams disappear from memory – but the game on that TV up on the wall in the maternity room filled a few hours for me late that night. In the months and years after, ESPN became something I could count on, day or night (and night is definitely better, even at 4 a.m. when I wake up early), to fill the void when I’m too tired to read but too awake to sleep. ESPN has changed tremendously through the two decades, but the function remains the same: When there’s nothing else on, there’s always ESPN. Best of all, you can watch without the volume. You just have to watch more carefully. We’re going to spend the next few days celebrating her birthday, so this will be the last post on this blog for a few days. A dad gets to do that. You know why? Because dad said so — that’s my story and I’m sticking to it.
State Insurance Division director Merle Scheiber announced this afternoon that health insurers in South Dakota can extend current plans in 2014. This is in response to President Barack Obama and the forced cancellations taking place under the federal Affordable Care Act. The move is an attempt to preserve people’s existing coverage while Obamacare gets straightened out.
“The decision came down to protecting South Dakotans who would have lost their health insurance coverage through no fault of their own, even though the federal government is only allowing this flexibility for an additional year,,” Scheiber said.