MERCER: Voters stick with GOP despite 10 percent cutsWith their financial decisions in Tuesday’s general elections, South Dakota voters handed Gov. Dennis Daugaard and the Legislature clear and specific directions about how they want, and don’t want, state government and public schools run.
By: Bob Mercer, Republic Capitol Bureau
With their financial decisions in Tuesday’s general elections, South Dakota voters handed Gov. Dennis Daugaard and the Legislature clear and specific directions about how they want, and don’t want, state government and public schools run.
In a few weeks, the Republican governor will show us who he really is, in his responses to those instructions when he delivers his budget recommendations to the Legislature in a speech Dec. 4.
Nearly two years ago, the newly elected governor stood alone at the front of the same House of Representatives chamber on a January day and called upon legislators to make 10 percent cuts in much of state government’s budget.
It was a time of deep uncertainty about South Dakota’s economy and the nation’s economy. So much, in fact, that Daugaard wanted spending reductions twice as deep as the 5 percent cuts that Gov. Mike Rounds recommended one month earlier, as the term-limited Republican was finishing his time in the Capitol.
On Tuesday, majorities of South Dakota voters in each legislative district delivered their verdicts on those 10 percent cuts. They returned super-majorities of Republicans to the Senate and the House.
Many of those elected Tuesday were the same Republicans who approved the Daugaard cuts.
There wasn’t a backlash by voters against the legislators who supported the cuts, nor against their political party’s other candidates, even though a variety of voices had arisen since then arguing the cuts were too deep.
What no one could foresee in those cold months of January through March in 2011 was that South Dakota’s economy would experience some of the best growth in the nation in 2011, and then remain on a solid track again in 2012.
The latest economy report from the state Bureau of Finance and Management tells how good the turnaround was.
The report, issued Oct. 30, shows personal income in South Dakota grew 11.8 percent in 2011 over 2010. That was the strongest in the nation.
Farm income drove that growth in 2011, soaring by 103 percent from 2010. Meanwhile non-farm personal income increased 5.7 percent in 2011.
Latest available numbers show that South Dakota personal income rose 2 percent in second-quarter 2012 compared to first quarter 2012. That was second-highest in the nation.
Housing permits were up 665 for the most-recent 12-month period. Corn and soybean harvests were expected to be down from 2011, but prices this year are up for corn, wheat, soybeans and hay.
Non-farm jobs increased in 2011 and they are further improved this year. In September there were 3,500 more jobs than 12 months earlier.
Whether voters were feeling more prosperous Tuesday isn’t known with any certainty. But they didn’t vote for change in the Legislature or the Public Utilities Commission or the U.S. House of Representatives, as Republicans were returned to control in all three sets of elections.
The majorities of voters however decided the governor and the Legislature needed direction on some specific matters.
They approved putting a balanced budget requirement in the South Dakota Constitution, and they approved another constitutional change regarding payouts from the state cement-plant trust fund. Both had the support of the governor and the Legislature.
But voters emphatically told the governor and the Legislature’s Republicans “no” on two other matters.
Fifty-seven percent of voters rejected the governor’s plan to allow the state Board of Economic Development to give away millions of dollars annually in grants to business projects costing more than $5 million.
It was the governor’s replacement for the construction-tax refunds that were expanded during the Rounds era and ultimately repealed, after this newspaper and four others exposed where the previously-secret refunds were flowing.
Only Republicans voted for the Daugaard plan. It was forced to the ballot by a petition drive led by a former state senator Ben Nesselhuf, of Vermillion, in his role as chairman for the South Dakota Democratic Party.
Sixty-seven percent of voters rejected another of the governor’s plans, the education reform package that only Republicans supported — and then only enough Republicans voted for it to barely pass, without any of the millions of dollars it would need in 2014.
The South Dakota Education Association led the petition drive to force the referendum.
Fifty-seven percent of voters rejected an additional 1 percent of state sales tax, which SDEA and the South Dakota Association of Healthcare Organizations wanted as a permanent, dedicated source of increased funding for public schools and Medicaid.
The governor and many Republican legislators opposed that. SDEA and SDAHO went to a public vote because there seemed no way to get a $180 million tax increase through the Legislature and across Daugaard’s desk.
Voters on Tuesday definitely told the governor and the Legislature what they want — a balanced budget and responsible management — and what they don’t want — a tax increase, more mandates to public schools, or corporate giveaways.
We’ll learn Dec. 4 with the governor’s budget speech to the Legislature if the message was heard and whether it will be heeded.
The bigger mission for both branches might be fulfilling the governor’s 2011 call for “a re-set” of state government’s spending priorities.
There are a series of social and economic thunderstorms gathering, such as the availability of new workers, the financial sustainability of the South Dakota Retirement System, and the affordability of post-high school educations.
Right now, there isn’t sufficient money in state government’s budget to address those thunderstorms, unless there are tax increases, or unless the governor and the Legislature substantially reconfigure how existing funds are spent.
Two years ago, with his cuts, Gov. Dennis Daugaard looked like the man who could lead South Dakota through a tough time and into a new era of government responsibility.
On Dec. 4 we will see what he has in mind for the second half of this first term as governor.