Owen covers topics for ’11 session, including cost-of-government bill

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South Dakota Chamber of Commerce and Industry President David Owen, pictured here, blended humor with a dire forecast of the upcoming legislative session during a speech to the Rotary Club of Mitchell on Thursday at the Ramada Inn and Suites. (Tom Lawrence/Republic Photo)

Talk about it

What percentage of South Dakota’s gross domestic product is devoted to state government? The South Dakota Chamber of Commerce and Industry wants to find out.

David Owen, president of the Sioux Falls-based pro-business organization, said a bill will be introduced during the 2011 legislative session in an attempt to determine the answer to that question. The session will begin Jan. 11.

“What’s the price of government?” Owen said during a speech to the Rotary Club of Mitchell on Thursday at the Ramada Inn and Suites.

“How much of our economy do we use for the purchase of goods and services?” he asked rhetorically.

Owen, who is on a pre-legislative tour of the state, said the bill will ask state government to compile all the revenue data and reveal it to the public.

He said it should include all state tax revenue, property tax collections, video lottery revenue and other fees collected by townships, water and sewer districts, mosquito districts and other agencies.

“What we’re hoping is to add an element to a conversation that’s already ongoing,” Owen said.

He said state government has consistently used about 12 percent of the state’s gross domestic product, which totals about $36 billion annually.

The study would also compile the amount of money used by local governments, and that figure may come as a surprise to some people, Owen predicted. He said the study wouldn’t break the figures down per city, town or county but would show a total for all local governments.

The proposed law is based on a Minnesota law that has been repealed, Owen said. But that law asked for targets and projections, he said, which created political strife.

“We’re not going to do that,” Owen said. “We learned from their mistake.”

He said in Minnesota, the percentage of state government’s impact on state gross domestic product shifted over the years.

Owen showed a chart to point out the changes. In 2002, it made up 15.5 percent and dropped to 15 percent in 2003.

But by 2006, it grew to 16.2 percent before starting to slide back. By 2009, it was back to 15 percent.

Road revenue

Owen praised state Sen. Mike Vehle, R-Mitchell, for his efforts to increase the state fuel tax to pay for road maintenance.

He said there’s no doubt the state’s roads need to be maintained and improved to prevent the problem from growing far worse.

“Sen. Vehle deserves a ton of credit for continuing to put this before us,” Owen said.

He said the state gas tax is actually 24 cents, not 22 cents, since there is a 2-cent tank fee. The chamber’s feeling on that, Owen said, is “waddle, quack: duck” — it’s a tax.

Vehle has proposed raising the state fuel tax by six cents by the year 2013.

Vehle said when he first proposed the higher tax, people said “no and h—- no,” but now they are disagreeing less vehemently.

“I think we need to keep telling the story,” Vehle said. “I am going to keep at it.”

Owen said not increasing the fuel tax since 1999 and not raising the cost of license plates is “absolutely silly.”

He noted that bridges across the state were designed to last 50 years and many are now reaching that age. Minnesota didn’t act on its decaying roads and bridges until a massive bridge collapse that caused several deaths, he said, adding “We probably don’t want to wait for that.”

“This is a tremendous challenge,” Owen said. “I honestly don’t know how you solve this.”

State budget

He said the budget shortfall has Pierre buzzing, but no one is sure what steps incoming Gov. Dennis Daugaard will take.

“You couldn’t even get any rumors started,” Owen said.

Gov. Mike Rounds announced he favors a 5 percent cut in funding for K-12 education. Daugaard may actually seek a larger cut, Owen said.

He predicts the new governor will offer a full review of the budget in a speech and said this year reminds him of the 2010 session, when Rounds made two budget addresses.

“People ask me, ‘Will there be a second budget address?’” Owen said. “There was last year and we had the same dude.”

Immigration

He said illegal immigration will be a “hot topic” in Pierre this winter as bills are introduced to deal with a perceived problem in the state.

“I don’t think it will be an obsession,” Owen said. “I hope it doesn’t (become one).”

He said Sen. Craig Tieszen, R-Rapid City, will introduce a “moderate” bill on the issue in an effort to head off a more extremist proposal. Tieszen is a former Rapid City police chief.

Partisan split

Owen reviewed the makeup of the two houses of the Legislature.

The Senate will have 30 Republicans and five Democrats, he noted, meaning that the old joke that Democrats in Pierre only need a small room to hold meetings is once again true.

Owen said 17 senators were re-elected, 10 were House members last year, three are former legislators or “returning veterans,” and there are five “rookies.”

The House will have 50 Republicans, 19 Democrats and one independent. Fortythree were re-elected, two were crossovers from the Senate, six are returning veterans and 19 are rookies.

Term limits

Owen said while he feels the eight-year term limits are too short, the turnover in the Legislature has prevented long-serving committee chairmen from amassing too much power.

Although, he said, some legislators seem to serve forever.

“I honestly think Sen. (Frank) Kloucek, now Rep. Kloucek, was in the building when it was built and can’t find his way out,” Owen said of the veteran Democratic legislator from Scotland.

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