Monthly Archives: October 2013

Regarding the minimum-wage proposal

The numbers in the Nielson Brothers Polling survey are several weeks old regarding the minimum-wage proposal, but they form an interesting baseline about South Dakotans’ attitudes on this issue. The South Dakota Democratic Party and their organized labor brethren are gathering the final signatures from registered voters on petitions for putting an initiated measure on the 2014 statewide ballot. It would increase the minimum wage to $8.50 hourly from the present $7.25 and would automatically index future increases to inflation. The NBP survey responses indicate the concept is generally favored, while the automatic indexing might be the debating point.

NBP asked four questions. The responses tell us that South Dakotans want low-wage workers to be paid better. On the basic question of whether an increase to $8.50 is supported, the responses were 63 percent yes, 24.6 percent no and 10.6 percent undecided. A second question was asked regarding tipped employees: Should their minimum be increased to $4.25 from the present $2.13? Those responses were 67.6 percent yes, 17.1 percent no and 15.3 percent undecided.

The final two questions show hesitancy about how the increases should be accomplished. On whether the minimum wage should automatically rise with the cost of living, the responses were 58.9 percent yes, 27.3 percent no and 13.8 percent undecided. On whether the person would vote for the ballot measure, the responses were 53.5 percent yes, 22.8 percent no and 23.8 percent undecided. Automatic indexing means a loss of political control. It would mean automatic raises and could lead to compression of wage schedules because only the bottom would be required to increase. That loss of control, in a state where small businesses comprise so much of the economy, could be the fatal flaw.

The resignation of Russ Olson

A month has passed since the resignation became official for state Sen. Russ Olson of Wentworth. He submitted his letter to the governor on about Aug. 13, with the departure date of Sept. 30. Olson was the Senate Republican leader. He left the legislative seat to accept the promotion to chief executive officer of Heartland Consumers Power District in Madison. He had served one term in the House of Representatives (2007-’08) and was in his third consecutive Senate term. This year District 8 had two new legislators in the House of Representatives: Democrat Scott Parsley of Madison, who works at East River electric cooperative, and Republican Leslie Heinemann of Flandreau, a dentist. While the Senate Republican leadership vacancy was filled via caucus election by Tim Rave of Baltic, there hasn’t been a move yet by Gov. Dennis Daugaard to fill the actual Senate seat. District 8 covers Lake, Miner, Moody and Sanborn counties. Tony Venhuizen, a spokesman for the Republican governor, said today: “The governor sought nominations of candidates and our office has reached out to them to gauge their interest. The goal is to have an appointee in place prior to session.” The 2014 legislative session opens at noon on Tuesday, Jan. 14.

The property tax ideas of Al Novstrup and Paul Dennert

Somehow fate placed both Sen. Al Novstrup and former legislator Paul Dennert on the state’s agricultural land assessment task force. Novstrup, R-Aberdeen, defeated Dennert, D-Aberdeen (formerly Columbia), in the 2012 state Senate election for the Aberdeen district. Both men take property taxation very seriously. They come from very different perspectives. Novstrup is a businessman who asks, Where is the relief for commercial property? Dennert is a lifelong farmer who saw agricultural land get substantial relief through the school-aid formula but has seen other levies such as capital outlay and pensions drive up the school-tax bill for farmers and ranchers nonetheless. And so it is worth considering what Paul Dennert and Al Novstrup brought to the table Tuesday during the final meeting of the task force for 2013.

Dennert proposed a law that would require a county director of equalization to keep two sets of values on the books for each parcel of agricultural land. One value would be based on the current system of agricultural production value. The second value would be based on “fair market” if the land was converted to a non-agricultural use, to be known as the deferred value. If the land’s classification changed, the director of equalization would then provide the past three years of deferred value to the county auditor, and the auditor would calculate three years of back taxes based on the levies for each of the three years of deferred value. The owner of the land would get credit for the agricultural taxes paid but would need to pay the remaining balance of the deferred-value taxes that would be owed. The property couldn’t be transferred until the deferred-value taxes were paid in full. The task force didn’t take any action on the Dennert deferred-value tax, letting it expire for lack of support.

Novstrup brought four proposals. None gained enough support for the task force to vote. He wanted to change the capitalization rate used in the formula for setting ag-land values under the current system, from the present 6.6 percent to 6 percent, which would have increased values. He also wanted to change the eight-year average to five years for determining ag-land production; the high year and the low year currently are thrown out, so it’s a rolling six-year average, and his proposal would have in reality turned that into a rolling three-year average. His third proposal would have set a schedule of specific requirements for ag land to be assessed at certain minimum percentages of its production value, because land in many counties is valued far less than it should be as a result of land values and crop production increasing rapidly in recent years. State law already sets a 2019 deadline for that to happen in full.

Novstrup’s fourth proposal sought to broaden the task force’s responsibilities. He wants to change the name to the Property Assessment Task Force and set its scope as the “equal and uniform assessment of all real property and shall review the implementations of the provisions of law concerning the assessment and taxation of real property.” In other words, do for commercial property and owner-occupied homes what the task force has been charged by law to do for agricultural property.

On each of his four proposals, Novstrup made a do-pass motion. None of the times did another task force member second his motion, leaving each proposal to die for lack of support.

It is unlikely that the task force will be the final forum where any of the Paul Dennert and Al Novstrup proposals are heard. The task force’s decision to endorse a conversion of agricultural property values to be based on actual use, rather than on the hypothetical values from soil type and crop productivity, will prompt a major debate in the 2014 session. Likewise, farmers are already pointing out that the high crop-price values from recent years, especially for corn, aren’t holding up but will affect agriculture taxes for some years to come. And there is a widespread opinion that agriculture producers should be paying more in school taxes; the cap that was placed in law was intended as a minimum to protect schools in case agricultural land values decreased, but they’ve increased instead. In the cities, meanwhile, there is a push that gained a foothold in the 2013 session for a different approach to taxation of rental property.

A gut feeling is that Al Novstrup’s interest in broadening the task force’s scope to cover all real property could well find majorities in the Senate and the House during the 2014 session. That would be in some ways a testament to the accomplishments of the task force, which has been led by then-Sen. Dave Knudson, R-Sioux Falls, and most recently by Sen. Larry Rhoden, R-Union Center. As the task force wrapped up its work Tuesday a complimentary statement was made by Rep. Jim Peterson, D-Revillo, about Rhoden’s fairness as chairman. Peterson, who knows agricultural property tax issues as well as any other current or past member of the Legislature, doesn’t say what he doesn’t mean.

Is fight over between Sprint and NAT?

Three years and five months later, Sprint Communications is dropping its complaint against Native American Telecom, now known as Crow Creek Telecom.

Sprint alleged to state regulators that NAT was improperly marketing toll-free calling services in order to charge Sprint access fees for Sprint customers who used the services, a practice known as traffic pumping.

The case became increasingly difficult as NAT, which began as an extension of a California operation, sought to shield itself behind the jurisdiction of the Crow Creek Sioux Tribe and eventually was reportedly purchased by the tribe.

The state Public Utilities Commission had scheduled a hearing in the case for Nov. 6 but today all of that might be moot. Attorneys for Sprint and Crow Creek Telecom today filed a stipulation for dismissal of Sprint’s complaint without prejudice and without awarding any costs.

This was the case in which state Sen. Dan Lederman, R-Dakota Dunes, attempted at one point to influence the three elected commissioners with a letter he wrote praising Native American Telecom; the letter was presented to the commissioners by NAT’s lawyer, Scott Swier.

In a semi-related matter, Swier recently pleaded guilty to a state campaign-finance violation for failing to properly register a political action committee that he formed to distribute money to candidates. the money came from the California businessman behind NAT’s  activities in South Dakota.

The Yankton supremacy

While many of us wonder what should be done (if anything, really) for the quasquicentennial of statehood in 2014, Yankton isn’t letting the opportunity slip away. The territorial capital has moved first into line for celebrating the 125th anniversary of South Dakota statehood by celebrating its status as the government center of Dakota for 32-plus years. Yankton was the capital from 1861 until territorial legislators moved the designation to Bismarck by an 1883 act; Bismarck became  home to the territorial offices in November 1884.

A few days ago — Oct. 24, to be precise — Gov. Dennis Daugaard issued an official proclamation that the quasquicentennial celebration shall be one year long and shall commence this Nov. 2 in Yankton, “a place where our history and culture is deeply rooted and where a strong foundation for our government was laid these many years ago in South Dakota.” It certainly doesn’t hurt Yankton’s cause that it is the home city of Lt. Gov. Matt Michels, a true student of history.

There are big plans by Yankton community members for Nov. 2. A walking tour of historic sites begins at 3:30 p.m. with re-enactors along the route. A social hour is set for 6 p.m. followed by a statehood anniversary special program at 7 p.m. that is to be attended by Gov. Daugaard, Lt. Gov. Michels and their spouses, Linda Daugaard and Karen Michels. A statehood anniversary ball is set to start at 7:30 p.m. with prizes for best costumes. All of the events are free and are appropriate for all ages of visitors, according to organizers.

The name of Yankton, we also learn from the governor’s proclamation, comes from Ihanktonwan — end village — a reference to the permanent site that tribal peoples maintained at the confluence of what today we know as the James and Missouri rivers. The capital of South Dakota eventually wound up in Pierre. Territorial legislators tried to move the designation from Bismarck to Pierre in 1885 but the territorial governor vetoed the act. After President Benjamin Harrison signed the two Dakotas into twin statehood on Nov. 2, 1889, the voters of South Dakota selected Pierre over Huron as the new capital 41,969 to 34,610. Yankton became the forgotten mother of the Dakotas.

Is the Legislature’s planning committee needed?

Rep. Susan Wismer, D-Britton, posed the question Monday afternoon. If the Legislature’s planning committee doesn’t have a direction, should it keep meeting? Six of the 11 members attended Monday. The Aug. 28 meeting was cancelled. Seven members attended July 11, with two by phone (including Wismer). Ten participated June 3, one by phone. So far. House Speaker Brian Gosch, R-Rapid City, hasn’t attended any of the three meetings since legislative session, and Sen. Corey Brown, R-Gettysburg, has missed two of three, according to the meeting minutes. A review of the 2012 meeting minutes showed attendance generally was better but several term-limited lawmakers routinely didn’t attend. The Legislature created the planning committee by law in the 2012 session. House Republican leader David Lust of Rapid City was the prime sponsor. The House of Representatives approved it 52-18, with the opposition a mix of arch-conservatives and Democrats. The Senate passed it 19-14, with all of the opposition coming from Republicans. The committee is chaired by Rep. Scott Munsterman, R-Brookings, who couldn’t attend Monday’s meeting because of a funeral. The vice chairman, Sen. Mike Vehle, R-Mitchell, presided. Vehle wants the committee to establish “dashboard indicators” that statistically can tell legislators whether state agencies are achieving their missions. The trouble Monday was that no one on the panel seemed overly sure what those might be and for what agencies. Vehle remarked that the silence was deafening. Wismer touched on the underlying question of whether the committee is necessary. “Our attendance has been sparse,” she commented. “And we are kind of wandering.” Wismer suggested the Legislature’s leadership consider finding new members with higher degrees of commitment or re-evaluate whether the committee needs to continue.

Workforce council gets new member

The governor has appointed Jim Borszich of Huron to the South Dakota Workforce Development Council. He replaces Shelly Stingley of Sioux Falls. The governor also re-appointed two current members, Cal Geis of Belle Fourche and Warren Lotsberg of Huron. All three terms continue until June 30, 2016. The council has 10 citizen members and five from posts in state government.

Time running short for Pork Month

We almost missed this. October was proclaimed as Pork Month in South Dakota by the governor. These statistics are cited: 7,900 jobs; $520 million annually to the state’s economy; and $17.4 million in business taxes annually. And there are the 315,000 tons of soybean meal and 52 million bushels of corn consumed in feed. There are more than 900 pork producers in South Dakota, with 159,000 sows who produce some 3,707,000 hogs. South Dakota ranks eleventh nationally in pork production and — get this — ranks No. 1 in pigs per sow. There’s a fact to smoke in your pipe.

Mystery enveloping Benda’s death

Reporter Luke Hagen of The Mitchell Daily Republic newspaper has a provoking piece tonight (www.mitchellrepublic.com) regarding the death of Rich Benda. Hagen interviewed two brothers-in-law of Benda, including the one who found Benda dead. According to the story, Benda appeared to have been hunting on the farm near Lake Andes. Law enforcement authorities so far aren’t commenting on what they’ve found. The other brother-in-law said he’s waiting to see what they determine. Benda, who was from Kimball originally. worked for decades in economic development in South Dakota and for a period in New York State. He served in the Rounds cabinet as secretary of tourism and development during the second term. His biggest achievement might have been his work getting the Northern Beef plant open in Aberdeen — only to see the plant shuttered and workers left without paychecks. The plant now is on the sale block. This is a story that likely will grow in the months ahead, as former Gov. Mike Rounds campaigns for the Republican nomination to the U.S. Senate seat from which Democrat Tim Johnson is retiring in 2014. The beef plant financing took years to round up, in stops and starts; the idea of being able to market South Dakota Certified Beef from the plant was a Rounds administration effort. He already was out of office before the plant could finally open. The financing relied significantly on the EB-5 visa program that focuses on foreign investors; these were channeled through the South Dakota Investment Funds Limited Partnerships, centered at Aberdeen through the South Dakota International Business Institute. The past several years, Benda worked for that investment program. This fall he began a new job with Heartland Consumers Power District at Madison as development director. With its ties to a national immigration program for wealthy investors, and with investors jilted, workers dumped, a formidable candidate for Senate involved, and a prominent man now dead, this story could become a focus of national, international and financial reporters.