Author Archives: Bob Mercer

About Bob Mercer

Bob Mercer is a newspaper reporter in Pierre where I cover state government, issues and politics for the Aberdeen American News and four other separately owned newspapers: the Black Hills Pioneer, the Pierre Capital Journal, the Mitchell Daily Republic and the Watertown Public Opinion. I began covering the Legislature in 1985 and have lived in Pierre since December 1986. I grew up in Wisconsin, worked my way through college, took my first full-time newspapers jobs in Wyoming, and have lived in South Dakota since the summer of 1984 when I moved to Aberdeen to join the American News. I worked for the Rapid City Journal as its state government reporter in Pierre from late 1992 through late 1998. I spent four years as press secretary and a senior aide to Gov. Bill Janklow during his fourth and final term from late 1998 through 2002. I returned to journalism in January 2003 as a self-employed reporter, providing state government coverage to the Mitchell, Watertown, Spearfish, Pierre and, depending on the year, Aberdeen newspapers. In 2008, the Aberdeen American News offered to hire me as full-time member of the AAN staff, with my reports continuing to be available to the Mitchell, Watertown, Spearfish and Pierre papers. The new arrangement has been in effect since January 2009 as the five papers continue their remarkable dedication to their readers and the general public, as the only South Dakota news outlets with a full-time reporter covering state government in Pierre throughout the year. In addition to focusing on the Legislature during the annual winter session and its various activities during the interim periods between sessions, I spend many days throughout the year -- traveling as often necessary -- to cover state government boards and commissions which oversee the state universities, technical institutes, outdoors, water, environment, business, public schools, banking, agriculture, utilities, health care and various other areas of public interest. I purposely don't register to vote because of my profession; the last time I recall voting in a presidential election was the first time, 1976, when I had just turned 18. I think I voted for Jimmy Carter over Gerald Ford. Make of that what you want, just don't make much of it.

The summary of three (or four?) Dakota capitals

The wagon train that rolled into the Pierre area on Friday evening began the trip in Yankton because Yankton served as the original capital for Dakota Territory starting in 1861.

Territorial legislators decided in 1883 to move the capital somewhere other than Yankton. Of 11 communities vying for the prize, Bismarck prevailed on the thirteenth ballot.

South Dakota historian Herbert Schell said in his 1975 book that the Bismarck decision changed the dynamics of statehood. He said the Dakotas split became north and south rather than east and west.

He said territorial delegates from the southern counties controlled politics in Dakota for the five years after the shift from Yankton to Bismarck.

That control was reflected by the use of Sioux Falls for the constitutional conventions leading to statehood.

President Benjamin Harrison signed the admission of the two Dakotas as states Nov. 2, 1889. One year later South Dakota voters chose Pierre as their permanent capital over Huron 41,969 to 34,610.

North Dakota Gov. Jack Dalrymple joined South Dakota Gov. Dennis Daugaard in Pierre on Friday and Saturday for the wagon train’s arrival, including events at the Capitol on Saturday morning, as part of the 125th anniversary of statehood for the twin sister states.

Here are GOAC letters to governors about EB-5

Wednesday morning should be quite the time as the Legislature’s Government Operations and Audit Committee meets at 9 a.m. to spend a few hours discussing the EB-5 foreign investor program’s operations in South Dakota. The committee asked Gov. Dennis Daugaard and former Gov. Mike Rounds to respond in writing to questions. The questions are available for Daugaard here and for Rounds here. There also are responses from Joop Bollen’s lawyer here and from a member of the staff for U.S. Attorney Brendan Johnson here. The meeting agenda is here and if you want to listen to the meeting as it proceeds click here on the SDPB logo that will appear that morning to the right of the committee listing. I haven’t heard where Rounds will be that morning. Daugaard will be holding Capitol For A Day in Faulkton. Another key figure, Richard Benda, died Oct. 20. He was secretary of tourism and state development from 2006 through 2010 during the Rounds administration. Benda and Bollen signed the state contract that gave Bollen’s company, SDRC Inc., all administrative and management responsibilities for EB-5 for five years starting in 2009. The contract was terminated last September by the Daugaard administration. Daugaard received a federal grand jury subpoena for information, including some related to Benda’s travel while secretary, in March 2013. That prompted Daugaard to ask state Attorney General Marty Jackley, who was appointed by Rounds in 2009, to investigate Benda and any related matters. Jackley disclosed to GOAC members at their July 29, 2014, meeting that he had arrest paperwork ready for Benda and had scheduled a state grand jury for last October. Benda died of a shotgun wound to his abdomen before Jackley could proceed. The death was determined as a suicide.


The 2014 general elections start today in South Dakota

Today, Friday the 19th of September, marks the opening of absentee voting in South Dakota’s Nov. 4 general elections. You can request a ballot through the mail from your county auditor or you can go to the auditor’s office to vote in your county. There also are satellite voting stations in four counties in Indian Country. They are Shannon, Todd, Buffalo and Dewey counties. A fifth county, Jackson, also meets the state criteria but a satellite location hasn’t been designated. The criteria are 1) the jurisdiction has 50 percent more voters living below the poverty level than the rest of the county; and 2) live, on average, 50 percent farther from the existing county seat or other satellite location than the rest of the county. For more on the effort to get satellite locations, and the desire for more, read this column by O.J. Semans. For more information on absentee voting, go here. Remember you must be registered in South Dakota to vote before you can vote in South Dakota, and registration for the Nov. 4 elections remains open through Oct. 20. You can do that by mail through your county auditor’s office or you register in person at your county auditor’s office. By the way, Tuesday the 23rd of September is national voter registration day.

Rail rehab will cover Chamberlain to Presho

Some environmental-related paperwork remains to be completed before the state Department of Transportation receives the federal TIGER grant of nearly $12.7 million for the next segment of work on the Mitchell-Rapid City rail line. State government owns the line.

DOT official Bruce Lindholm told the state Railroad Board at its meeting Wednesday that “substantial completion” of the rehabilitation from Chamberlain to one mile west of Presho is expected in September 2016. He said that means trains could start running on the line in two years. “It’s not set in stone yet,” he said about the schedule.

Plans are still taking shape but one contractor is likely, in part because there aren’t access roads and there are many bridges on the 11 miles or so between Oacoma and Reliance, according to Lindholm. He said design work is starting and there will be weed spraying and other vegetation removal this fall using state funds.

The project’s multiple sources of funding from South Dakota strengthened the application. The Legislature led by Rep. Jim Schaefer, R-Kennebec, and Sen. Mike Vehle, R-Mitchell, appropriated $7.2 million that was supported by Gov. Dennis Daugaard. The state board made another $7 million available. The local Rails to the Future organization raised more than $1 million from producers and agriculture groups. There also was support for the project from the Lower Brule Sioux Tribe and the Crow Creek Sioux Tribe.

“The amount of private money was phenomenal,” Lindholm said. “To everybody involved it was a real win.”

Schaefer said Wednesday that word from a governor’s aide is a desire to rehab the next dozen miles from Presho to Vivian. Schaefer said recycling the old rail might help accomplish that. Lindholm offered a different perspective on the old 85-pound rail. He said the project so far is using sturdier 110-pound rail from Mitchell west. He said the 85-pound rail probably can be sold for salvage price or higher and the money might be needed for the work to reach Presho.

Railroad Board chairman Todd Yeaton of Kimball, who manages an elevator on the restored MRC line, said he’d like to see the rehabilitation continue west to Vivian and all the way to Murdo if possible. “Hat off to all involved. It’s a definite win for the state,” Yeaton said.

Alex Huff, a retired railroader who previously ran the Dakota Southern Railway on the MRC line, said the last loaded train left Presho in 2007. He praised everyone who contributed in the TIGER process. It is the second time South Dakota received federal support for rehabilitation of the line. “It was a a good piece of work,” he said.

Railroad Board member Jerry Cope asked, “What happens if the bills come in high?” Lindholm replied, “We have to find more money.” He added that cost reductions would be sought. “Hopefully we didn’t miss it too far,” he said.

TIGER by the way stands for Transportation Investment Generating Economic Recovery. The work that is planned for the latest segment includes the railroad bridge crossing the Missouri River between Chamberlain and Oacoma.

Lottery expects solid return on Monopoly

The South Dakota Lottery is on its way to offering another lotto-style game. This one costs $5 per ticket and is called Monopoly Millionaires’ Club. Lottery officials estimate their first-year sales at $2,080,000, according to a statement filed with the Legislature’s rules review committee. The lottery’s executive director, Norm Lingle, said the estimate was based on 5 cents per 800,000 South Dakotans multiplied by 52 weeks. From that, prizes will run $1,040,000, while retailers will get 5 percent commission for $104,000. The lottery’s administrative expenses are estimated at $364,624. That leaves a net of $571,376 for the lottery and the state treasury. The drawings for the new game will be Friday nights starting Oct. 24. Sales begin in South Dakota on Oct. 19. The rules review committee gave final clearance Tuesday to proceeding with the new game.

Yes, that was Aaron Hicks

Up and down and all around has been the professional baseball career of Aaron Hicks so far with the Minnesota Twins organization. Once envisioned as the latest in a great line of Twins playing center field, Hicks was returned to the minors for seasoning this season after struggling at majors level. He is back up the big club as part of the September roster expansion. Last night, in his only hit of the game, he raced to first base ahead of the throw from the middle infield and was called safe. That allowed Chris Herrmann, pinch running for Kurt Suzuki, to score the winning run in the bottom of the ninth inning with two outs for a 4-3 Minnesota victory over Detroit. The game was well-pitched by Ricky Nolasco, who held a 2-0 lead for the Twins after eight innings. Glen Perkins gave up a two-out home run to J.D. Martinez for three runs in the top of the ninth. Joe Nathan, who held the job of ninth-inning closer for the Twins earlier in his career before Perkins, couldn’t hold the lead for the Tigers. Nathan walked Trevor Plouffe, Doug Bernier pinch-ran and Suzuki’s base hit into center field bounced past a diving Ezequiel Carrera for a double to make the score 3-3. The Twins have been struggling down the final weeks of the season, losing about three times as often as they’ve won during the last month. For the Tigers, it was a blown chance in another way, because the Kansas City Royals lost last night as well (to the Chicago White Sox). The Tigers lead the American League Central Division, followed by the Royals, in their battle for the division title and a sure spot in the playoffs. The Royals are in the second slot meanwhile for the two wild card teams who will play each other for the right to join the three division winners in the playoffs. The Twins currently stand at 64 wins and 87 losses, much worse than I thought this season would be. That is second-worst in the American League, better than only Texas. The Tigers are 84-67, followed by the Royals at 82-68. In their last 10 games, the Twins are 3-7, worst in the AL.

Governor’s task force working on capital outlay tax

The group assembled by Gov. Dennis Daugaard to analyze and offer possible changes to the capital outlay tax levy used by school districts throughout South Dakota is at least one or two meetings away from making its recommendations and findings. Mike Houdyshell, director of the property and special taxes division in the state Department of Revenue, gave an overview of the work to members of the Legislature’s task force on agriculture land valuations Monday.

Houdyshell said there’s an arbitrary limit in place now that limits some school districts much more than others in the use of capital outlay levies. One of those on the ag-land task force who attested to that was former legislator Paul Dennert of Columbia. Dennert said his farm land in the Aberdeen school district faces much higher capital-outlay taxes than his land in the Frederick school district.

Houdyshell said the governor’s work group will meet again on Sept. 23 and they’ll know then whether they would need more meetings. He said schools’ revenue from capital outlay taxes grew at an average annual rate of 6 percent during the past 10 years while other tax revenues for schools grew at 4 percent. He said that’s not sustainable and the increase in capital outlay revenues seems directly linked to the increases in agriculture land values under the current productivity system.

The ag-land valuation task force’s chairman, Sen. Larry Rhoden, R-Union Center, also serves on the governor’s work group, as do several other legislators. Rhoden said the ag-land valuations task force probably needs to see data from the capital-outlay work group before the ag-land group can make any recommendations for changes in the 2015 legislative session.

Rhoden said legislators are looking to protect property owners on one hand but also want schools adequately funded. Many school districts turned to capital outlay increasingly in recent years after the 2011 cut in state aid to schools. The Legislature loosened capital outlay restrictions to help cushion the revenue strain. Now the question is how to allow schools to get enough revenue if capital outlay is put under tougher restrictions.

The difficulty for farmers and ranchers is that capital outlay is a tax across the board on property, much like a bond-issue levy, while the state aid formula imposes three sets of levies, with the lowest on ag land, followed by owner-occupied homes and the highest on all other property including commercial. This could be one of the thorniest issues of the 2015 legislative session.

Some Democratic backlash over column about Pressler

I received some interesting comments from Democrats about the Capitol Notebook column I wrote for the weekend newspapers regarding the candidacy of former U.S. Sen. Larry Pressler, who’s running for his old seat again 18 years after he lost it to now-retiring U.S. Sen. Tim Johnson.

Pressler is a former Republican who’s running as an independent and doing surprisingly well. Johnson is a Democrat who edged Pressler in 1996 largely because Democrats had a vastly superior organization at the counties-level for getting out the vote.

(Republicans finally learned to match that GOTV effort with John Thune’s near victory over Johnson in 2002 and his defeat of U.S. Senate Democratic leader Tom Daschle in 2004. The lessons that Thune mastered, combined with the stall in Democratic voter registration in recent years, has turned South Dakota into a near-total Republican stronghold.)

On Saturday night I received a phone call from a man who said he was Steve Jarding. Jarding is currently the campaign manager for Rick Weiland, the Democratic candidate for U.S. Senate. Experience told me instantly that phone calls from political types after 9 p.m. on a Saturday likely won’t be productive, unless there is breaking news. There wasn’t any breaking news.

Instead, this caller asked if he could call me back Sunday. I said Monday morning would be better. We had family visiting for the weekend. The caller and I settled on 9 o’clock. There wasn’t a call this morning.

I received an email from a long-time Democratic activist. I remain unsure what the real point was, other than to raise again some of the same points that were made against Pressler in 1996.

I don’t know that Pressler can pass Weiland or the Republican nominee and frontrunner, former Gov. Mike Rounds. But the assumption made by the Weiland camp as of last spring that Pressler would hurt Rounds has proven only partially true. Pressler seems to be taking as many votes away from Weiland as from Rounds. That statement is based on what we’re hearing and seeing from campaign polls and from the independent survey conducted in early September for the Aberdeen American News, KSFY TV and KOTA TV.

Where the Senate race might be headed is a repeat of the 2002 Republican primary for governor. Rounds won after the two frontrunners, then-Attorney General Mark Barnett and former Lt. Gov. Steve Kirby, stalled in the polls. Rounds smiled all the way to victory as he picked up many of the undecided voters who didn’t the like negativity of Barnett and Kirby toward each other.

Rounds and Weiland have run TV ads lately on the EB-5 matter. Neither of their ads is totally accurate. Rounds’ ad is the bigger dodge. EB-5 was indeed his program. His Cabinet pursued expansions of it hard from the federal agency that oversees it. His Cabinet secretary Richard Benda signed the contract in 2009 privatizing EB-5 administration, with state government to receiving percentages of the fees paid by foreign investors to the private company run by Joop Bollen of Aberdeen.

As I’ve noted in previous posts about the recent independent poll, there weren’t enough undecided voters left for Weiland or Pressler to catch Rounds. Any change in the ranking will have to result from voters leaving one candidate in favor of another. The theory of late among some Democrats is that Pressler was brought into the race by the Rounds camp as a buffer against Weiland. That would make for quite an interesting story if true. It also would make for brilliant strategy if it works.

It also might be sour grapes among Democratic insiders who can’t fathom that Pressler might actually be the right fit for the times, with independent voter registration so strong in recent years. Rounds and Weiland have to fight on two fronts — against each other and against Pressler — while Pressler can run against the status quo of the two-party system.

This could finish as the most fascinating election for major office in South Dakota’s history.

Why Basin is troubled by EPA on clean air revision

Came across this nugget in the latest issue of Basin Today, the magazine for Basin Electric Power Cooperative, which is the source of much of the electricity that flows to rural South Dakota and rural customers throughout a nine-state region. Basin’s CEO and general manager Paul Sukut used his column in the September-October issue to discuss Basin’s position regarding proposed clean-air regulations from the U.S. Environmental Protection Agency. Basin burns a lot of coal to make electricity and EPA’s proposal would severely affect Basin as a result. This is the paragraph from the Sukut column that caught my eye and deserves to be shared so that people on all sides of this issue might better understand the box that many electricity producers are in:

“As cooperatives, we’re in a unique situation in that the bulk of our baseload generation was built in the early 1980s when we were under the Fuel Usage Act of 1978, which prohibited the building of generation facilities fueled by natural gas. Because of this law, coal was our only viable choice. We designed and built our power plants to operate at maximum efficiency. However, as technology advances, there may be opportunities to improve generating efficiency, but current New Source Review (NSR) rules don’t allow projects that result in higher levels of efficiency. We’d like to see EPA ensure that energy efficiency improvements approved by a state plan do not trigger NSR.”

Basin followed the federal rules and built coal rather than gas. Nearly 40 years later, proposed new federal rules aim to shut down coal while pushing utilities to now look at gas and renewables. That is the dilemma.