Three federal agencies are probing South Dakota’s economic development office, in what its director says isn’t related to the ongoing EB-5 visa scandal but could be inspired by it.
Speaking to lawmakers Friday, economic development commissioner Pat Costello revealed his office has requests for information from the U.S. Treasury, Housing and Urban Development, and Energy departments.
Each department is asking the Governor’s Office of Economic Development for more information about their own programs with GOED. For example, Costello said Housing and Urban Development wants more information about how South Dakota has handled its Community Development Block Grants, which are funded by the department.
Costello guessed news about alleged wrongdoing at GOED under under then-leader Richard Benda is behind those agencies checking in.
"I think the publicity that all this has come with, there’s been a number of those agencies that have just inquired," Costello said.
A bid from parents and doctors to require more coverage of an expensive autism treatment was defeated Thursday after insurance companies and businesses opposed the mandate’s cost.
Over two hours of testimony and debate, a range of supporters told lawmakers that “applied behavioral analysis” therapy, or ABA, was the best way to treat many young children with autism.
"Research tells us that when comprehensive ABA therapy is provided at the prescribed intensity, up to 47 percent of individuals will be able to mainstream into a regular first grade classroom without an aide," said Dr. Daisha Seyfer, a developmental behavioral pediatrician at Sanford Health.
Parents testified about how ABA treatment had made a huge different in their children’s behavior. Michelle Powers of Brookings said her daughter’s autism made her act “out of control” with daily outbursts. After seven months of prescribed ABA treatment, the outbursts had become less severe and less frequent — once a week instead of daily.
But the same thing about ABA therapy that experts say brings results, its intensive nature, also makes it expensive. A full load of ABA therapy involves up to 40 hours of treatment per week, and can easily cost more than $100,000 per year.
That means few families can afford it, but also that insurance companies don’t want to fund it.
Avera is the only health plan in the state to currently cover ABA. Some parents received payment for ABA therapy from Wellmark, but the company says that was a mistake due to imprecise billing. In January, it notified families it would no longer be covering ABA — which brought those families to the Legislature.
Jana Johnson, a doctor and a mother of a child with autism, complained that if autism could be treated with surgery or a pill, insurance companies would cover it in a heartbeat. It’s only behavior therapy, Johnson said, that they balk at.
Rep. Scott Munsterman’s bill required some health care plans to cover ABA therapy and other autism treatments. Around 60,000 to 90,000 citizens would be affected — primarily those who get their coverage from larger employers, and those with smaller plans that have been grandfathered in under the federal Affordable Care Act. Small business insurance plans and non-grandfathered plans on the individual marketplace would would not be affected.
Munsterman originally proposed to require all plans to cover ABA therapy. But under the Affordable Care Act, states that impose new coverage mandates on insurance companies are required to pay for that cost. To dodge a budget battle and weaken opposition from Gov. Dennis Daugaard, Munsterman narrowed the bill to apply only to those plans the state wouldn’t have to pay for.
But insurance plans said they shouldn’t have to pay for expensive treatment, which they said would force them to pass costs on to customers in the form of higher premiums.
"Many South Dakotans are increasingly concerned about their ability to afford health insurance," said Darla Pollman Rogers, a lobbyist for Wellmark Blue Cross Blue Shield of South Dakota. "We share that concern and we encourage legislators to carefully scrutinize proposed legislation that might in any way increase costs."
Wellmark previously estimated it might cost as much as $7 per member per year more to cover ABA treatment for everyone, but said the actual figure was probably higher.
Pollman Rogers also argued that ABA therapy was experimental and unproven compared to other, less expensive therapies. Studies show ABA isn’t helpful “in all cases,” Pollman Rogers said, arguing for more research.
That contradicted Seyfer’s testimony, and a list she provided of 26 different scholarly articles she said backed up the effectiveness of ABA therapy.
State Sen. Dan Lederman criticized the bill’s supporters for not finding a compromise with insurance companies. He also said he was hesitant to support a measure when the two sides disagreed on the facts and figures.
The Senate Commerce and Energy Committee voted 5-2 to kill the bill, with Sens. Ryan Maher and Angie Buhl O’Donnell opposed.
But supporters aren’t giving up. Munsterman is looking at ways to bypass the Senate committee, which could include sticking the autism language into another bill. That showdown will likely come on Monday.
In the summer of 2012, I profiled Gov. Dennis Daugaard’s senior team of advisers: six aides who meet at least weekly to discuss issues and advise the governor. Their formal name is the Governor’s Executive Committee, which its member shorten to “GECo.”
That team consisted of Lt. Gov. Matt Michels, chief of staff Dusty Johnson, policy and communications director Tony Venhuizen, senior adviser Deb Bowman, economic development commissioner Pat Costello and budget director Jason Dilges.
Bowman is retiring at the end of the legislative session after more than two decades in state government. She’ll be replaced as a senior adviser with Kim Malsam-Rysdon, the former Secretary of Social Services. (It’s not the first time Malsam-Rysdon replaced Bowman, who was DSS secretary before her.)
But right now there’s an overlap. Malsam-Rysdon has begun work as a senior adviser, but Bowman has yet to resign. So until March 21, Daugaard’s six-member adviser team has a seventh member.
South Dakota lawmakers defended an economic development program they created last year from perceived encroachment by Gov. Dennis Daugaard on Wednesday.
The Building South Dakota program, created by a bipartisan group of legislative leaders in 2013 with only reluctant support form Gov. Dennis Daugaard, spends millions of dollars each year on economic development incentives, career education, affordable housing and other areas.
But as part of complicated budget maneuvers, this year Gov. Dennis Daugaard proposed replacing the ongoing funding stream for Building South Dakota with a one-time infusion of $30 million. In addition to giving Daugaard more funds for his priorities, this also removed his primary objection: Building South Dakota’s continual appropriation of large amounts of money from the state’s unclaimed property fund.
In a hearing Wednesday morning, the House State Affairs Committee approved Daugaard’s funding swap. They also agreed to a three-year cap on Building South Dakota’s spending at $10 million per year, part of an accounting mechanism so Daugaard’s $30 million infusion wouldn’t get automatically spent at once. But they drew the line at the governor’s proposal for a permanent $10 million yearly cap.
"To limit in perpetuity distributions from the Building South Dakota fund at $10 million is not appropriate," said House Republican leader David Lust, R-Rapid City.
Under the program’s structure, 30 percent of its funding is automatically spent every year on career education and other programs in local school districts. That’s true whether lawmakers give it $10 million or $100 million.
Daugaard’s budget director Jason Dilges said a cap would preserve money in the fund for the non-educational aspects of the fund: local development corporations, infrastructure, housing and other areas, which he called “the true economic development aspects” of Building South Dakota.
That drew criticism from Democrats, who said the educational aspects of the fund are among the most effective forms of long-term economic development.
"This is a sly way to take money away from education," said House Democratic leader Bernie Hunhoff, D-Yankton.
Under pressure from lawmakers, Dilges said proposed removing the $10 million cap.
"It would be very short-sighted of us to decide that we’re going to derail this proposal because of what’s going to happen three years down the road," he said.
The House State Affairs Committee then adopted a Lust amendment to remove the cap, before passing the bill.
Democrats on the committee voted no, saying the long-term provisions to fund Building South Dakota with budget surpluses are sufficiently complicated they could be manipulated with “sleight of hand budgeting.” But Hunhoff said Democrats support the concept.
Had lawmakers not approved Daugaard’s plan to replace Building South Dakota’s ongoing funding with one-time money, Dilges said schools and medical providers would have to fall from 3 percent funding bumps to 1.6 percent increases.
Earlier today, the Senate State Affairs Committee voted 5-4 to pass House Speaker Brian Gosch’s version of a statewide ban on texting while driving. Some longtime supporters of texting bans oppose Gosch’s measure because it’s a “secondary offense” — which means drivers can’t be pulled over for it, only given an add-on ticket for another offense — and because it overrides the stronger texting bans a number of South Dakota cities pass.
But ultimately it’s no surprise that Gosch’s bill is advancing while Vehle’s heads into hostile territory tomorrow in the House Transportation Committee. In this political battle, Gosch holds all the cards.
Ultimately it comes down to this: Gosch doesn’t care very much about banning texting while driving. He’s opposed bans for years, arguing they don’t do much good and aren’t enforceable. He only came on board this year when he melded a texting ban to language overriding local texting bans. That override is where Gosch is passionate — he believes cities are already exceeding their legal authority by passing texting bans and wants to make that explicit.
In contrast, traditional texting ban supporters like Mike Vehle and Craig Tieszen want very much to ban texting while driving, which they believe is a scourge leading to accidents and deaths across South Dakota. So if the result of this legislative dispute is another year of no statewide ban, that’s a defeat for them.
Because the status quo is more acceptable to Gosch than it is to Vehle and Tieszen, he’s more willing to see both bills die — the likely outcome if the two chambers can’t make an agreement. So Gosch has no incentive to make any concessions from his position. He either gets what he wants, or things stay the same — neither one a loss.
Underpinning this power is Gosch’s support in the House, which has traditionally resisted texting bans. By being able to deliver a House majority for his statewide ban this year, and comfortable in the existence of a majority to defeat any versions he dislikes, Gosch can negotiate from a position of strength.
Vehle’s position of weakness has been clear for weeks. Instead of sticking to his guns and getting the Senate to pass his ideal texting ban — where police can pull people over for texting and the penalty is stronger — Vehle preemptively watered down his bill with elements of Gosch’s proposal. Today he pronounced himself undecided whether Gosch’s bill would be better or worse than the status quo.
Presuming the House sticks to its guns and defeats any alternative to Gosch’s bill, there are two potential outcomes here: either the Senate can acquiesce to Gosch’s version and pass it, or it can amend it and set up a conference committee fight. But as Speaker of the House Gosch would appoint all the House members of the conference committee. Since bills before a six-member conference committee need support from at least two of the three members from each House, Gosch would be able to effectively block any proposal he doesn’t like. With, as stated above, no incentive for Gosch to compromise, that would give Vehle two choices: surrender, or kill the bill.
The real strategic mistake on the part of texting ban supporters was not launching an initiated measure years ago. They cite polling showing overwhelming popular support for texting bans, but kept coming back year after year to bash their heads against the immovable opposition in the House. Now they’re likely to get what they wanted — a statewide texting ban — but in a form they abhor.
A legislative committee voted on Wednesday to ban texting while driving in South Dakota — but also to override stronger local bans in cities like Sioux Falls.
The proposal, sponsored by House Speaker Brian Gosch, was one of two competing texting bans moving through the South Dakota Legislature. Compared to a version sponsored by Sen. Mike Vehle, Gosch’s version has a smaller $25 fine and specifically overrides any local texting bans.
Gosch said the state should have the same driving laws everywhere, not different laws in different cities.
"It makes sense with a state like ours that has as its number two industry tourism, as people travel into this state… they need to know that the rules of the road are going to be the same wherever they go," Gosch said.
On Wednesday, Gosch’s bill divided traditional supporters of texting bans. Some, such as the South Dakota Trucking Association and the state medical association, said they support any texting ban, even if they might prefer a strong version.
"We don’t care how you do it, just get it done this year," said Bob Miller, a lobbyist for the Dakota Transit Association, told lawmakers.
But the state’s cities and police chiefs were “vehemently” opposed.
Steve Allender, Rapid City’s police chief, said a strong texting ban would include a larger fine than $25 and crucially would allow police to pull someone over for texting. Under Gosch’s proposal, police can’t pull drivers over for texting, though they can issue an add-on ticket if they pull someone over for another violation. Vehle’s bill, in a concession, also doesn’t allow police to stop vehicles for texting, but it leaves in place local bans that do.
"This bill is nothing but a resolution asking the people to stop texting," Allender said.
But Sen. Larry Rhoden, R-Union Center, reminded supporters of a stronger texting ban of the arguments they had used to persuade him in years past: that South Dakotans are law-abiding and most will stop texting and driving just because it’s illegal, not because of the penalty.
For a number of years, South Dakota’s Senate has supported a texting ban, only to see it die in the House — with opposition led by Gosch. This year Gosch switched from opposition to supporting a weaker texting ban that overrides local ordinances.
Gosch’s bill passed the Senate State Affairs Committee 5-4 Wednesday morning, with Sen. Jason Frerichs, D-Wilmot, casting the deciding vote. It now heads to the full Senate.
Vehle’s alternative texting ban bill previously passed the Senate and is scheduled for a hearing before the House Transportation Committee Thursday.
A longtime crusader for a texting ban, Vehle said he doesn’t know whether South Dakota would be better off with Gosch’s bill or nothing.
"You’re going to have (a ban in) the whole state then," Vehle said. "But you would be taking away the stronger ban in the communities. That’s a tough call as to say whether that’s a win or a loss."
Sioux Falls, Brookings, Huron, Mitchell, Vermillion and Watertown have all passed local texting bans.
South Dakota students should get ready to say the Pledge of Allegiance every morning at school if they don’t already do.
The state Senate voted 35-0 to require daily Pledge recitations in schools, sending it to Gov. Dennis Daugaard’s desk for a signature. Not a single lawmaker in either the House or Senate voted against the Pledge requirement.
The measure allows students who don’t want to say the pledge to opt out as long as they maintain a “respectful silence” during the Pledge.
Federal law prohibits the dangerously mentally ill from purchasing firearms. But South Dakotans who are involuntarily committed for being a danger to themselves or others dodge that law right now, because South Dakota doesn’t submit lists of the dangerous mentally ill to the federal background check system.
That’s on the verge of changing. On Tuesday morning, a Senate committee voted 5-2 for a bill to begin filing that mental illness information with the National Instant Criminal Background Check System, or NICS.
The measure, House Bill 1229, would require mental health officials to notify the federal government if someone were involuntarily committed for being a danger to one’s self or others. Prosecutors would be required to tell NICS if someone were acquitted of a crime by reason of insanity, or declared unfit to stand trial.
HB1229 also sets up a process by which people who believe they are no longer mentally ill can ask South Dakota judges to restore their gun rights. Supporters say that bypasses a much more cumbersome process of appealing to the federal Bureau of Alcohol, Tobacco and Firearms.
South Dakota already reports other information to NICS, including when someone is convicted of a felony.
A similar measure was shot down last year. But with support this time from the National Rifle Association, it’s having better luck this year. If the South Dakota Senate approves the bill, it will head to Gov. Dennis Daugaard for a signature.
"To me it’s one of the reasonable, responsible responses we can make to all the issues of gun violence in our society today," said Sen. Craig Tieszen, R-Rapid City.
But while the NRA and the National Shootings Sports Association backs the measure, a different gun group is fiercely opposing it as an attack on the Second Amendment. The National Association of Gun Rights and its South Dakota affiliate, South Dakota Gun Owners, have urged their members to contact lawmakers and lobby for a no vote.
Neither group testified on Tuesday before the Senate committee.
"I’ve been deluged with emails and I’m kind of surprised there’s no one here to oppose it," said Sen. Mike Vehle, R-Mitchell.
Several lawmakers found the law concerning.
Sen. Tim Begalka, R-Clear Lake, worried that it’s too hard to get off the NICS registry, even with the new system set forth in HB1229. He opposed granting more power to the federal government and worried that veterans could find themselves unable to buy guns because they seek treatment for PTSD.
"I don’t believe we have a problem in South Dakota," Begalka said. "We’ve gone years without this. I believe we’re ostracizing the mentally ill."
Sen. Jeff Monroe, R-Pierre, said the rapid growth of mental illness diagnoses in recent decades makes him leery of barring gun purchases because of someone’s mental health.
Tieszen, though, said the law is narrow and wouldn’t apply to most people with mental health issues.
"If we have a veteran who comes home and is dangerously mentally ill and is a danger to themselves or their community, don’t we want them to not have easy access to firearms?" Tieszen said.
South Dakota officials have begun informal negotiations with the federal government over a potential Medicaid expansion in the Mount Rushmore State.
Just over a month after Gov. Dennis Daugaard asked for flexibility to cover just some of the people the Affordable Care Act wants states to add to the Medicaid program, officials with the U.S. Department of Health and Human Services have reached out to learn more about what Daugaard wants to do.
"The fact that they’re asking questions at all means that they’re considering it," said Daugaard aide Tony Venhuizen, who cautioned that the discussions were "preliminary" and involved lower-level staff.
Discussions have also involved Democratic leaders in the Legislature. House Minority Leader Bernie Hunhoff, D-Yankton, said South Dakota Democrats have reached out to their contacts in President Barack Obama’s administration to encourage them to take Daugaard’s outreach seriously.
"We’re getting word from Washington that they respect our moving deadline, and they want to work with us, and work to get the best possible proposal on the table," said Hunhoff. "Hopefully that will happen within days here."
So far Republican legislative leaders haven’t yet been contacted by federal officials, but Senate Majority Leader Tim Rave said he expects conversations to happen later this week.
South Dakota has less than two weeks left in its regular legislative session. Daugaard had asked for speedy consideration of South Dakota’s request given its short legislative session.
The federal Affordable Care Act calls on states to expand the Medicaid program to cover everyone earning up to 133 percent of the federal poverty line, which is $15,521 for an individual or $31,721 for a family of four. Under the law, the federal government would pay the entire cost of the expansion until 2016, and 90 percent or more after that.
But people earning more than 100 percent of the poverty line are eligible for subsidized private insurance on the Affordable Care Act’s online exchanges. So Daugaard asked if South Dakota could expand Medicaid to cover just people up to 100 percent of poverty — $11,670 for an individual or $23,850 for a family of four.
Negotiations with federal officials haven’t yet advanced to whether those specifics might be acceptable.
"We don’t know yet if the feds will accept what the governor is proposing, or if they’ll have some kind of counter-offer," said Venhuizen.
Last week, Daugaard said he could expand Medicaid without prior authorization from lawmakers. That could be necessary even with an expedited approval process from the federal government.
It’s possible South Dakota could reach an informal Medicaid deal before its session ends on March 14. But a formal waiver request would take weeks more.
"He’ll want to have a discussion with legislative leaders about what would need to happen and how that would work," Venhuizen said of Daugaard.
Rave said Republican legislators would be open to Medicaid expansion on the right terms. But Rave was skeptical of getting anything done before the Legislature leaves town on March 14.
"It’s just awfully late," Rave said. "We need to stop and be a little thoughtful here. If it takes calling a special session in a month or two months or whatever… there’s certainly nothing wrong with calling a special session to get that right."