School, medical funding still up in the air for 2015

Last-minute negotiations Thursday night between Republican lawmakers and Gov. Dennis Daugaard will determine how much money schools and medical providers get next year.

By the end of the day Friday, legislators will adopt a 2015 budget. It could increase school and medical provider funding by the 3 percent Daugaard recommended — or it could go beyond that.

How much extra is uncertain, though it’s not expected to be the 3.8 percent increase requested by schools.

"I think everything’s still on the table," said Jason Dilges, Daugaard’s budget chief. "There’s been pretty broad support for spending a little bit more. How much, we’ll see (Friday)."

The Legislature’s Joint Appropriations Committee met Thursday for just over an hour, passing a few uncontroversial amendments to the budget and killing many requests. Democrats saw an attempt to expand Medicaid shot down, while Republican calls to spend more money on tech schools and science research also lost. So did bipartisan projects like Teen Court and prenatal care for pregnant non-citizens.

Sen. Deb Peters, R-Hartford, said she and other GOP leaders are “still negotiating” with Daugaard over how much to fund schools and medical providers. In particular, lawmakers are considering those providers who are “highly reliant on Medicaid dollars,” Peters said, rather than hospitals and clinics that treat more people with private insurance.

Previously, Peters has said any increase for schools would be earmarked for increasing teacher pay.

How much money there is for schools and providers will be determined by how much the state expects its Medicaid program to cost. As the economy improves, fewer people than expected are signing up for Medicaid, which saves the state money.

If lawmakers anticipate large savings, that’s more money to spend.

"Will there be additional reductions to fund other priorities?" Dilges said. "There’s so much uncertainty out there, so we need to make sure we have enough dollars to cover the what-ifs we’re not terribly comfortable with."

Dilges said Daugaard is wary of extra ongoing funding for schools and providers, since that spending also affects future years’ budgets. But the governor is open, Dilges said, to extra funding if he’s confident the state can afford it.

The Joint Appropriations Committee will reconvene at 8:30 a.m. Friday to resume action on the budget.

Contra Daugaard, legislators set optimistic budget projections

This morning, the Joint Appropriations Committee voted unanimously to adopt new revenue projections that are somewhat more confident than those put forward either by Gov. Dennis Daugaard or the Legislature’s own fiscal staff.

Combining the current year’s and next year’s budget, lawmakers expect South Dakota to have an extra $3.3 million more than the Legislative Research Council predicted. And they expect a whopping $7 million more than Daugaard had predicted.

These numbers didn’t come out of thin air. After LRC and the state Bureau of Finance and Management each issued their revenue projections yesterday morning, lawmakers went through and in almost every case picked the higher number of the two for every revenue source.

For example, BFM predicted $848 million from the sales tax in 2015, while LRC predicted $851 million. Lawmakers went with $851 million. But for the property tax reduction fund, BFM predicted $107 million to LRC’s $105 million; lawmakers adopted $107 million as their total.

Daugaard’s budget chief, Jason Dilges, wasn’t too happy with this burst of optimism from the appropriators.

“It looks like to me there’s … a desire to try and have the revenue estimates be higher and spend money,” he said Monday evening.

Dilges also complained that “none of the legislators have been forthcoming with me” about some of their spending plans.

Under the first three years of Daugaard’s term, lawmakers largely went along with the governor’s stated goal of very conservative budget projections. That seems to be shifting a little this year.

Now, a $7 million difference in a $1.4 billion budget is not terribly much. And recent years have often seen budget surpluses in the tens of millions of dollars. Rep. Mark Mickelson, R-Sioux Falls, cited that history in his defense of why he considers this more optimistic projection to be “pretty conservative.”

"I will be shocked if we come back next year and we don’t have more revenue than we forecast," Mickelson said.

Still, lawmakers largely cited anecdotal data (large amounts of construction in their home towns, today’s prices on the ag commodity market) and gut feelings Tuesday morning when defending their optimistic revenue projections.

"Traditionally, I’ve been known as very, very conservative," said Sen. Bill Van Gerpen, R-Tyndall. "But I feel very good about the subcommittee’s recommendation numbers. Sales tax I think is going to see an increase this year."

This new assertiveness comes in a year when Sen. Deb Peters, R-Hartford, is running the appropriations process. Peters has a more forceful personality than last year’s Joint Appropriations chair Fred Romkema. Under Romkema, lawmakers largely stuck within the confines of Daugaard’s proposed budget, spending money he had left for them to allocate but not changing anything significant other than cutting an employee wellness incentive program.

It remains to be seen how things will shape up over the coming days, but don’t be surprised if lawmakers are more willing than the past to defy Daugaard and tinker with his budget.

A switch in time saves mines?

Senate Bill 162 repeals and lowers some taxes applying to gold mining. It was requested by Lead’s Wharf Mining, which is undergoing tough times. Gov. Dennis Daugaard’s administration opposes it because it would cost the state’s budget money.

Today, after debate on the Senate floor, the Senate began voting. Sen. Blake Curd voted no, then thought better of it a few seconds later. In the middle of the roll call, Curd asked the secretary to mark him down as a yes, instead.

The final bill passed 18-16, the bare minimum number of votes needed. Without Curd’s switch, it fails.

Of course, it may still fail. Sen. Deb Peters, an opponent, gave notice of her intent to reconsider the vote tomorrow.

Wayne Carney, executive director of the South Dakota High School Activities Association, testifies before the Joint Appropriations Committee of the South Dakota Legislature on Jan. 21, 2014.
Legislators probe activities association
The South Dakota High School Activities Association is a nonprofit corporation, created by state law, participating in the state retirement system but not, it argues, subject to South Dakota’s open records laws.
And a number of South Dakota lawmakers are not happy about this ambiguity.
"This corporation seems to have it both ways," said Rep. Fred Romkema, R-Spearfish, on Tuesday. "They’ve got (access to) the state retirement (system), which is a highly desirable… benefit, and yet haven’t been totally open to the public. To me, they should go together."
In a meeting spurred by both outside discontent with SDSHAA and by Sen. Corey Brown’s difficulties getting access to the association’s annual audit, SDHSAA executive director Wayne Carney took pointed questions from lawmakers on the Appropriations Committee for nearly two hours Tuesday.
Carney told lawmakers his group would voluntarily become more transparent, and is already putting more information online as part of that process.
"I think we’re going to definitely respond to what we heard today," Carney said.
But lawmakers may not give SDHSAA the chance to become more public voluntarily. Sen. Deb Peters, R-Hartford, said after the meeting that a number of bills addressing the association will be proposed this session.
One, the most drastic choice, would dissolve SDHSAA and fold its activities into the state Department of Education.
Peters, calling that the “nuclear option,” said she hoped a “common-sense approach” would be found to clearly define SDHSAA as public or private.
"They are a creature of the Legislature," Peters said. "We need to further define them and figure out exactly what they are."
Lindsey Riter Rapp, the association’s attorney, told lawmakers that the quasi-public SDHSAA doesn’t appear to fall under the state’s open meetings laws.
"We don’t fit any of those definitions that are provided in statute," Riter Rapp said.
But that didn’t satisfy many legislators.
"Do you think it’s proper that these taxpayers, who in essence are the source of the revenues that are distributed in the retirement fund… that they’re not in a position where they ought to be able to hear or see or know what’s going on with your meetings?" asked Sen. Bill Van Gerpen, R-Tyndall.
SDHSAA receives around 70 percent of its $2.2 million in revenue from state tournaments, including gate receipts and television revenue. Around 5 percent of the revenue comes from dues paid by schools around the state — much of it originally taxpayer money.
Rep. Jim Bolin, R-Canton, told Carney he should wean the association off this public money, especially if it wants to claim to not be subject to open records laws.
"I really think it would be an extremely good move by the activities association… to remove the fees or at best suspend them so the organization could say they are totally dependent on gate receipts," Bolin said.
Carney declined to say what position the association would take to bills trying to redefine its role.
"We’ll just leave that to the legislators, and our attorney," Carney said.
But he said the activities association wasn’t trying to hide anything. If its audits, budgets and other documents weren’t publicly available, Carney said, it was because “nobody ever asked for it.”
"We certainly would have provided it if anybody would have asked," he said.
Now people are asking — and demanding.

"We have let this go on too long," said Peters. "We need to make it a little bit more clear as far as what they are and what their duties are."

Wayne Carney, executive director of the South Dakota High School Activities Association, testifies before the Joint Appropriations Committee of the South Dakota Legislature on Jan. 21, 2014.

Legislators probe activities association

The South Dakota High School Activities Association is a nonprofit corporation, created by state law, participating in the state retirement system but not, it argues, subject to South Dakota’s open records laws.

And a number of South Dakota lawmakers are not happy about this ambiguity.

"This corporation seems to have it both ways," said Rep. Fred Romkema, R-Spearfish, on Tuesday. "They’ve got (access to) the state retirement (system), which is a highly desirable… benefit, and yet haven’t been totally open to the public. To me, they should go together."

In a meeting spurred by both outside discontent with SDSHAA and by Sen. Corey Brown’s difficulties getting access to the association’s annual audit, SDHSAA executive director Wayne Carney took pointed questions from lawmakers on the Appropriations Committee for nearly two hours Tuesday.

Carney told lawmakers his group would voluntarily become more transparent, and is already putting more information online as part of that process.

"I think we’re going to definitely respond to what we heard today," Carney said.

But lawmakers may not give SDHSAA the chance to become more public voluntarily. Sen. Deb Peters, R-Hartford, said after the meeting that a number of bills addressing the association will be proposed this session.

One, the most drastic choice, would dissolve SDHSAA and fold its activities into the state Department of Education.

Peters, calling that the “nuclear option,” said she hoped a “common-sense approach” would be found to clearly define SDHSAA as public or private.

"They are a creature of the Legislature," Peters said. "We need to further define them and figure out exactly what they are."

Lindsey Riter Rapp, the association’s attorney, told lawmakers that the quasi-public SDHSAA doesn’t appear to fall under the state’s open meetings laws.

"We don’t fit any of those definitions that are provided in statute," Riter Rapp said.

But that didn’t satisfy many legislators.

"Do you think it’s proper that these taxpayers, who in essence are the source of the revenues that are distributed in the retirement fund… that they’re not in a position where they ought to be able to hear or see or know what’s going on with your meetings?" asked Sen. Bill Van Gerpen, R-Tyndall.

SDHSAA receives around 70 percent of its $2.2 million in revenue from state tournaments, including gate receipts and television revenue. Around 5 percent of the revenue comes from dues paid by schools around the state — much of it originally taxpayer money.

Rep. Jim Bolin, R-Canton, told Carney he should wean the association off this public money, especially if it wants to claim to not be subject to open records laws.

"I really think it would be an extremely good move by the activities association… to remove the fees or at best suspend them so the organization could say they are totally dependent on gate receipts," Bolin said.

Carney declined to say what position the association would take to bills trying to redefine its role.

"We’ll just leave that to the legislators, and our attorney," Carney said.

But he said the activities association wasn’t trying to hide anything. If its audits, budgets and other documents weren’t publicly available, Carney said, it was because “nobody ever asked for it.”

"We certainly would have provided it if anybody would have asked," he said.

Now people are asking — and demanding.

"We have let this go on too long," said Peters. "We need to make it a little bit more clear as far as what they are and what their duties are."

What’s going on behind the scenes

I don’t have solid information here because no one is talking on the record, but my impression from off-hand comments by legislators and lobbyists is that we are seeing disagreements between the House and Senate Republicans over spending.

The basic dynamic is the Senate Republicans (backed by Democrats) believe there’s extra money available to give to schools and/or medical providers. House Republicans (possibly with support from Gov. Dennis Daugaard) don’t believe there is extra money that can or should be given to those groups.

Sen. Deb Peters predicted just this in my Sunday story:

“I think it’s going to be a fight between the House and the Senate,” said Sen. Deb Peters, R-Hartford and chairwoman of the Senate Appropriations Committee.

“Right now, without a lot of details, the Senate (Republicans’) proposals so far have matched up pretty well with the Democrats’ in terms of being pretty reasonable.”

Rep. Fred Romkema, Peters’ House counterpart, you will recall, was skeptical on the availability of extra ongoing money for schools and medical providers:

“We are in a very fluid state at the moment,” said Romkema. “That money has perhaps already been accounted for before there’s formal action.”

We’ll see how this sorts itself out. So far we’re seeing delay upon delay as caucuses and leaders meet behind closed doors to try to hash out this dispute.

Marijuana, fight commission top issues at legislative forum

Medical marijuana and regulating mixed martial arts bouts were among the issues dividing Sioux Falls-area lawmakers at Saturday’s legislative forum.

Nine senators and representatives representing districts 9, 13 and 14 took questions for 90 minutes Saturday morning, in the second of four legislative coffees sponsored by the Sioux Falls Area Chamber of Commerce and other groups.

One of the most controversial bills the South Dakota Legislature is considering this year, allowing schools to arm volunteer defenders, didn’t spark a debate on Saturday.

Instead, it was a bill to allow people charged with possession of small amounts of marijuana to cite medical necessity that provided one of the few spots of disagreement in the low-key forum.

Several lawmakers said they’re skeptical of the medical marijuana proposal, House Bill 1227.

“A case was made that you ought to be able to break a law, if there’s a higher good,” said Rep. Steve Hickey, R-Sioux Falls. “I would tend to agree with that until the higher personal good for you compromises what’s best for those around you.”

He said he worries marijuana is one of those cases.

Similarly, Rep. Mark Mickelson, R-Sioux Falls, said he was probably against the medical marijuana bill but expressed sympathy for people who use marijuana to treat chronic pain and other diseases. He suggested that prosecutors and judges use discretion to impose minor sentences in those cases.

Less nuanced in opposition to the bill was Rep. Anne Hajek, R-Sioux Falls, who warned that “marijuana is a gateway drug” and said she was opposed to any steps toward legalizing the substance, though she too said the state shouldn’t “throw people in jail for the use of marijuana.”

Meanwhile Rep. Marc Feinstein, D-Sioux Falls, suggested that leniency to small-time marijuana users was humane and would also relieve a burden on county jails.

Another bill, Senate Bill 84, has pitted lawmakers against Gov. Dennis Daugaard over whether the state should create commission to regulate boxing, mixed martial arts and other fighting sports.

A large majority of the South Dakota Senate approved SB 84, believing that the sports might be distasteful but that regulation can help protect people.

“What we’re talking about is a commission to regulate it so people don’t get hurt,” said Sen. Deb Soholt, R-Sioux Falls. “It’s happening in South Dakota. It’s unregulated. Because of that, athletes are getting injured.”

Hickey agreed with Daugaard that the bill would end up promoting these violent sports and cause more harm than good.

“Just because something is happening in the state doesn’t mean we need to legitimize it,” Hickey said.

Sen. Deb Peters, R-Hartford said she voted against SB 84 not because of distaste for fighting sports, but because of concern about the state’s fiscal liability if it created the commission.

South Dakota is caught in the middle, said Sen. Phyllis Heineman — “if we’re not going to have a commission that regulates it… then we should outlaw it,” she said.

Heineman came down in favor of regulating the fights and voted for SB 84.

Other issues discussed at the legislative forum included guns in schools, funding for Medicaid, illegal immigration and security deposits for rental apartments.

Visit argusleader.com to view a video of the legislative forum.

The third Chamber-sponsored forum will be next Saturday at 10 a.m., featuring lawmakers from districts 11, 12 and 15.

The PACs of District 9 (updated)

District 9 is notable for two things: internment camps for shellfish-like aliens, and one of the more interesting primary races for South Dakota Legislature this year.

Incumbent Sen. Deb Peters, R-Hartford, is facing off a spirited challenge from Rep. Lora Hubbel, R-Sioux Falls, who decided to challenge Peters after being redistricted out of her old district.

The two candidates have thrown harsh words at each other, but most of the dirtiest work has been done by third-party groups, who can fill voters’ mailboxes with negative pamphlets without putting the name of the candidate they support on them (thus insulating those favored candidates from any backlash from voters upset at negative attacks).

(Note: this article has been updated to reflect new information, near the bottom.)

Let’s take a look at some of these attacks, and who’s making them.

Hubbel has slammed Peters for being “pro-abortion” and “anti-gun,” and anti-Peters postcards have taken a similar tack. Here’s five cards (some front-and-back of the same postcard) from the same group:

These are stamped, “Paid for by Conservatives United.”

Who is Conservatives United? They’ve got a page on Secretary of State Jason Gant’s new campaign finance system, though there’s not too much there.

Conservatives United is run by a Brian Wellhouse of Watertown. The political action committee hasn’t filed a pre-primary report (or it hasn’t been uploaded yet), so we can’t yet see who’s donated to Conservatives United or what they’ve spent their money on. Its mission statement is to “support conservatives in GOP primary elections.”

Another, slightly more transparent group has also sent out anti-Peters postcards:

Those postcards have a little more sophisticated design, but generally hit the same theme: Peters is an enemy on key conservative issues. This group, the Conservative Values PAC, focuses on health care rather than the abortion- and gun-focused cards Conservatives United sent out.

So who is Conservative Values PAC? It’s on the Secretary of State’s website, and it has a more notable name running it: former lawmaker and gubernatorial candidate Gordon Howie.

The stated mission of the PAC is “to support limited, responsible government and the principles of conservative fiscal & family values.”

The PAC lists a single $100 donation, below the threshold at which donors have to be disclosed, and a $100 donation to the Hubbel campaign. Presumably, the expenses for this postcard (and the money to raise it) happened after the reporting deadline for pre-primary campaign finance reports.

But Peters has an “ally” against this onslaught of postcards:

These postcards are paid for by a political action committee called “PAC’n Heat,” which evidences a sense of humor with its punny name.

So who is PAC’n Heat? To the Gant-machine!

The chair of the PAC is a certain Deborah Peters of Hartford, and lists its mission as “to elected responsible candidates.”

If you click through to PAC’n Heat’s pre-primary report, you can see it reported one donation — $1,000 from the Salt Lake City company Insure-Rite.

It also lists three other notable contributions: $421.41 from “Deb Peters for Senate repayment of cost of postcard,” $424.40 from “Steve Hickey for House repayment of cost of postcard,” and a $424.40 loan from “Bob Deelstra for House.”

Peters, obviously, is the incumbent senator in District 9 and the prime beneficiary of these attacks. Hickey and Deelstra are the incumbent House members from District 9.

Neither man is facing a primary challenge, so neither man has to file a pre-primary report with Gant’s office.

EDIT: Hickey writes to tell me that he and Deelstra didn’t have anything to do with the attack on Hubbel. The contributions from him and Deelstra reflect an earlier postcard the three incumbents sent out introducing them to voters, he said. He sent over an image of the mailer he said he and Deelstra helped pay for:

So while Hickey and Deelstra are definitely allied with and supporting Peters, this would suggest they weren’t involved in the attacks her PAC made on Hubbel.

I don’t know what the connection is between any of those people and Insure-Rite. Peters is a CPA, Hickey a pastor and Deelstra a “sales professional” for Northview Campers.

So that’s the postcard situation in District 9: Peters, under attack by third-party groups allied with her opponent Hubbel, forms her own group to punch back — with the support from other, current members of the Legislature.

What do you think about the postcard wars in District 9? Is one side being nastier or less truthful than the other?

Beyond Daugaard’s endorsements

Gov. Dennis Daugaard gave more than just public support to the five candidates he’s supported in Republican legislative primaries.

According to Daugaard’s senior advisor Tony Venhuizen, in addition to statements of support, the governor:

  • Wrote a letter to the editor in support of Rep. Val Rausch, R-Big Stone City, in his battle with Sen. Tim Begalka, R-Clear Lake
  • Attended a “meet and greet” event with Sen. Tom Nelson, R-Lead
  • Gave Rausch and Sen. Deb Peters, R-Hartford, $500 each from his campaign fund

That’s on top of providing those candidates with polling data.

The other candidates Daugaard endorsed are Sen. Bruce Rampelberg and former Rep. Mike Buckingham, both senate candidates from Rapid City.

Daugaard endorses fifth candidate

Gov. Dennis Daugaard has now endorsed five different legislative candidates in Republican primaries.

The first three, reported a few days ago by the Rapid City Journal’s Kevin Woster, were all incumbent legislators facing challengers: Senators Bruce Rampelberg, Tom Nelson and Deb Peters.

The two latest are different ducks. One, Mike Buckingham, is running for an open Senate seat — against current Rep. Phil Jensen. The other, Val Rausch, is a current House member, termed out, who’s challenging an incumbent senator in Tim Begalka.

Read my Argus Leader story here.

Daugaard’s spokesman Tony Venhuizen said he didn’t see anything wrong with endorsing in an open seat, or with picking Rausch over Begalka. Even though Rausch is challenging Begalka, they’re both current lawmakers. They “can both be viewed as being incumbents,” Venhuizen said.

Should the governor be endorsing at all in party primaries? What about endorsing when it’s not a case of supporting an incumbent — or even going so far as to challenge an incumbent?

Perhaps more interesting is what Daugaard did before endorsing. Look for that in another post.

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