In a message to a joint session of the legislature yesterday, Governor Dennis Daugaard presented bold plans from his administration to address challenges that the administration has faced during his tenure. However, reaction to his plans have varied from support to skepticism. And that’s within the confines of the Republican caucus.
As noted by the Associated press:
Lawmakers should pass a half-cent sales tax increase to improve South Dakota’s lowest-in-the-nation teacher pay so it’s competitive with neighboring states, Gov. Dennis Daugaard said Tuesday in his State of the State address.
The sales tax increase would raise more than $100 million in the upcoming budget year, most of which would be put toward helping raise the state’s target average teacher salary to $48,500 per year. If approved, it would be the first permanent increase to South Dakota’s sales tax rate of 4 cents per dollar in nearly half a century.
and…
“To do two tax increases in a row, back-to-back is tough,” House Majority Leader Brian Gosch said, referring to fuel tax increases that lawmakers approved last session for road and bridge funding.
and…
On other issues, the governor again exhorted legislators to consider an expansion of the Medicaid health coverage program for disabled and low-income people. Daugaard’s position a departure from other Republican governors nationally who have declined to expand because they oppose President Barack Obama’s federal health overhaul.
But Daugaard has said the state’s costs for expansion would have to be covered by savings in part by expanding access to services that are fully funded by the federal government. That would free funds for boosting potential enrollment by about 50,000 residents.
In reviewing the Governor’s proposals, I asked some legislators to give me some feedback on what they thought about the Governor’s State of the State address, and the Governor’s proposals. And the wariness over the proposed tax increase as noted by House Majority Leader Brian Gosch seems to be evident with other members of the GOP.
State Representative Lance Russell of Hot Springs offered an unvarnished assessment of the Gover
nor’s proposals. When asked, he noted that to him, the State of the State address offered “More taxing, more spending, more welfare, more mandates, and no great announcements of new private industries that will contribute to the taxable value of the state’s future. And no vision.”
Representative Jim Bolin found more to like in the address, especially in some of the points that weren’t primary focuses by the media, such as the new state park proposed by the Governor. Bolin noted, “My reaction is that we have no agreement yet with the feds on Medicaid expansion, so out of respect for the governor and his request 
that we withhold judgment, I will not comment at this time. I am supportive of the effort to make some adjustments for future employees in the state pension system. I am very pleased by the work we are doing on rail line expansion and the refurbishing of old lines. Good for everybody. I like the effort to push dual credit classes juniors and seniors in high school. I like the efforts we are making to develop Good Earth State Park near where I live and the work being done in Custer Park is great. The efforts to develop a new park in Spearfish Canyon is noteworthy as well.”
On the education portion of the package, with the Governor’s 1/2 cent of sales tax to fund high salaries for teachers, Bolin, a majority whip for the GOP Caucus, echoed what Gosch had to say on the tax proposal; that “the Blue Ribbon Task force proposal will face major hurdles as the two thirds constitutional amendment passed by the voters in 1978 makes any tax hike very difficult. The fight over this question will be a dominant question this session.”
State Senator Deb Peters, Chairwoman of Senate Appropriations had been listening to the main proposals on Education and Medicaid develop over the last year, and was not surprised to see that they 
took the form that they did. Deb noted that “an important component of working on the legislation will be how they work on accountability for the distribution of the new funds, versus how it is balanced with local control,” expressing the legislature’s desire for the funds to go where they intend – to teacher’s salaries – without stepping in and usurping local control from school districts in making decisions.
Senator Peters is also watching the Medicaid Expansion proposal carefully, as negotiations have been going on for quite a while, but an agreement for the federal government to step in and take over their treaty responsibilities has still not happened yet. She noted that South Dakota’s Native American population wants the access to care, and she believes it is the right thing, but “we have to balance that against the Medicaid expansion itself.”
The next 30 days will be very telling as to what is going to happen with the Medicaid expansion in South Dakota, which is already drawing opposition from groups such as the South Dakota chapter of Americans for Prosperity, a conservative, free market group which has already begun campaigning against the measure.
With at least two major measures proving to be controversial before their bills have been written yet, the 2016 legislative session could be interesting to watch in light of the election year politics that are sure to be involved in many of these decisions for legislators.
Stay tuned.
A tax increase of a half-penny might be a bitter pill for R’s to swallow, but it’s the right thing to do. Sometimes the right thing, is the hard thing.
For a bunch of folks who like to tout the greatness of South Dakota, they might want to pay attention to the multiple clues about the damage being inflicted all across the state as the quality and quantity of educators deteriorates faster than snowflakes on a hot grill.
It’s long past time to do something to pay these professionals what they deserve. It’s a damn travesty frankly. And in case you’re curious, yes, I’m a registered R and have been for a long, long time.
Unfortunately, the big majority of the wage earners in South Dakota make less than the average teacher makes during their nine months of work. The governor, and others, are wanting these lower paid persons to pay more in taxes to benefit a segment of our society. Hmm, taking from some and giving it to others . . .reverse redistribution of wealth . . . a Republican value?!!
The average wage in SD is just over $43,000. The average teacher wage is $40,000. Teachers are under even the state average wage.
Where did you get that figure of $43,000? That is way out of line. US Dept of Labor, Bureau of Labor Statistics says the average wage for all occupations is $37,300. That includes the highest paid like doctors, lawyers, college professors, engineers, and even school superintendents (who average among the highest) and these all work 12 months per year, not nine months. Most, about 3/4 of the wage earners, make less than what the teachers make.
So, where did your figure come from?
Comparing teacher wages to average wages in the state is a false equivalency and completely meaningless. Teacher wages compared to 3/4 of the average wage of college graduates would be a more appropriate comparison.
Nine months? Maybe some teachers but not all. Not most. When the average lazy South Dakotan is sitting in a chair at 7PM, eating chips and scratching those hidden itchy spots, most teachers are grading papers. My wife is a teacher and I see her less than most couples. She also works in the summer (like many, many teachers) and she makes less than 33k. The reason at all that any teacher would make more than an average worker here is because we never want to encourage development, won’t go somewhere where there is work and a lot of us have horrible work-ethics. I had to move out of state at a point in my life to realize we don’t have much ambition here, and so sadly we relegate ourselves to the bare minimum standard of work. Sadly too most of us here don’t appreciate education, thinking somehow our children will be saved from book-larnin’ by the return of the 1800s. We need to be smart about money true, but buying into mythology is never a start.
A solid no on Medicaid expansion—you expand a program like this and you will never have it decrease—dollars come with strings….
NO on Medicaid expansion!
That’s the right answer against Medicaid expansion; unlike the wishy-washy response Pro-Choice Peters gave. Guess what Deb? Appropriators dole out the cash and have to fall on one side of an issue or another. You’re a liberal so why not just say you’ll support the expansion.
I’ve been saying that for years. Deb just needs to come out of the closet and call herself a liberal tax and spend democrat.
Do something is better than do nothing.
What a silly notion. Doing something bad is not better than doing nothing at all.
I want the teachers to be paid a competitive regional wage for their profession. Our state has been dead last in pay for too long, and falling even further behind. I want the best possible teachers to educate our future South Dakotans. The current system is starting to cause a shortage of teachers.
Solve teach pay by reducing the number of school administrators. Use those funds to pay for increased teacher wages. Not all 166 school districts needs a school administrator. Two or more districts could easily coop on a school administrator and save $60K + benefits. So lets say $80K with benefits x 70 school administrator reductions = $5.6 million dollars. Taxing something to death doesn’t always solve the problem. We have been throwing new money at education for decades and we still have a problem.
I just heard of a nearby district where the school administrator was given a $15,000 a year raise! If the school district had that much extra money, why not dole that out for teacher raises instead?
What a good question. This also poses another. Will the teachers get the money if allotted?
Right. Will the funds go to the teachers? Or will administrators see the additional funds as opurtunity to spend on other items? If this passes I’d want know that all money makes it to the teachers and not funneled into other areas.
‘I just heard of a nearby district where the school administrator was given a $15,000 a year raise! If the school district had that much extra money, why not dole that out for teacher raises instead?’
Which school district? Can you provide a link to a newspaper article that proves what you heard is true? That makes it more believable … because you seem to hear a lot of things that simply are not believable.
Even by your math, this proposal only gets 1/13th of the way to competitive wages. Where should the other 92% needed come from?
I’m not sure I see Peter’s response to the Governor’s proposal as wishy-washy. Reading her words, it appears she is supportive of the objective to get better and more cost effective care to those who live on reservations and are depending on Indian Health Services. At the same time, she appears she does not support Medicaid expansion. And, it appears she is questioning their linkage and if linkage is “necessary,” it appears she is questioning whether the trade-off is worth it.
If she were for Medicaid expansion on its own merits, she would have endorsed the package as a whole which she clearly did not.
Gosch and Russell are right. I respect Bolin immensely.
So what incentive are the feds going to have to increase spending on IHS? If we expand Medicaid in SD, the feds will be paying for that too (until they decide not to and we are stuck with the bill). So why would IHS go along with this plan anyway? I don’t trust any promises made by the federal govt at this point, and if SD does, we will most likely get stuck holding the bill. I hope the legislators realize this.
The Argus and KELO are highlighting the part of the speech (and subsequent appearance on SDPB Radio) about contract management and GEAR UP. Wonder what legislators are thinking about Matt Michels being assigned the task of developing a “solution” to the problem?
This is a great opportunity for the Republican Party of South Dakota to make our state a destination for young families. Hopefully your party seizes the moment.
South Dakota IS a destination for young families.
All this is irrelevant if either Sanders or Clinton become our next President but we should at least try to do the best to be consistent. If we all agree that a majority of increased costs associated with expanded Medicaid would be paid for by non-South Dakotan’s than why would we implement a year long sales tax increase with only 30% paid by non-residents when 50% of a six month summer sales tax increase would be paid for by non-residents?
Charlie,
When someone says a government expenditure is a proper role of government, a policy for the good of the citizens, and should be done but also say “and it will be paid by someone else,” I am immediately against it.
I don’t care if the “payer” is the federal government, a taxpayer besides myself, or out of state visitors. If I am unwilling to pay for a program that passes the tests in the first paragraph, it is immoral in my mind to effectively point a gun* at another and say they should pay for it.
* Because of the power of the government, taxation is forced and figuratively points a gun at one who doesn’t pay.
P.S. If it is decided to raise the sales tax to pay for an increase in teachers salaries, I want it applied evenly over a year. Targeting our guests who visit our state to pay for what we believe is good for our children seems to me like me making/expecting my neighbor to feed my kids.
Troy sorry buddy but your argument is poor at best. Moral high ground just doesn’t cut it on timing of a sales tax when Nebraska is at 7.75 % and Minnesota 7.85%.
In fact if the Legislature were working on being truly fair to our surrounding States; lowering the Winter sales tax season by a penny and raising the Summer sales tax by two pennies makes more sense than doing anything else. But when have taxes ever made sense?
And lastly Troy until South Dakota’s sales tax exceeds all those of surrounding States I don’t really give a crap what their residents pay whenever they buy something here.
I think our legislators need to consider that the Governor’s proposals have pretty strong support by the majority of South Dakotans. If they don’t pass them, the Dems will get it done on the ballot. Why would we want to let them claim victory again?
Because its wrong.
You think???? Let them try the ballot. How many of them have passed recently, other than the minimum wage hike, and I still say that would not have passed if people would have understood the automatic raises..
Charlie,
I guess I can’t understand your point. Do other states raise taxes when out of staters come and decrease when they don’t? Are you suggesting we raise our taxes to equal theirs?
My main point is if a program is worthwhile, the first argument that someone else should pay for me is a tell it really isn’t worthwhile. I don’t care if that other person is the federal government, the rich or out of staters.
Troy your right. I’m not following Charlie at all. Doing the right thing many times goes against pier pressure. Why can’t individual districts raise the revenue they need? Why must they take it across the state? Keep it local
Troy we must then agree to disagree civilly. I’m sitting out here in McPherson County on the edge of things so my perception of Statewide pulses could easily be skewed. I continue only with the selling point of raising license fees two years ago being justified mainly because surrounding States were all much higher than our current fees. When I travel out-of-state and see the fees taxed onto every hotel bill I know how good I have it by staying in South Dakota.