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Legislature to hear from gov on economic, workforce development

PIERRE — When Gov. Dennis Daugaard delivered his first State of the State speech to open the 2011 legislative session, he spent a third of his time on economic development. He declared he was embarking not on a one-year plan but one that would cover four years.

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The Republican governor returns to address the Legislature again Tuesday on opening day of the 2014 session. Now he is on year four of that plan and of his governorship, but he hasn’t formally declared his intention to seek reelection this year.

In his 2011 speech Daugaard acknowledged South Dakota’s economy was coming out of the recession. Labor statistics indicate the jobs lost in the recession have been replaced and businesses kept hiring. Employment was at a record high as of November.

In fact, unemployment is at an extreme low in many of South Dakota’s regional hubs. Shortage of skilled workers in some occupations has been described as a barrier to growth in some communities.

Daugaard talked about the need for workforce development in both of his 2012 and 2013 speeches to legislators. State government has seen limited success in efforts to bring back former South Dakotans and to recruit people to move to South Dakota from other states.

Workforce development will be a theme again Tuesday for the governor, along with many other topics as State of the State speeches typically have been, according to spokesman Tony Venhuizen.

Voters in November 2012 rejected one of Daugaard’s proposals to allow a state board to give tax rebates to large business projects. Last year legislators crafted their own South Dakota Jobs package of incentives.

Hanging over the 2014 session are the revelations and ongoing investigations, reviews and audits of state government’s involvement in the EB5 immigrant-investor program that was secretly implemented under the previous governor, Mike Rounds, for whom Daugaard was lieutenant governor.

Daugaard in his 2011 State of the State speech held up two of the Rounds-era projects — Northern Beef Packers of Aberdeen and Dakota Provisions of Huron — as examples of success in value-added agriculture development.

In recent months South Dakotans learned both companies were major recipients of loans from Korean and Chinese investors under the EB5 program. Northern Beef closed last year after two rounds of foreign financings. Dakota Provisions received two rounds as well.

Federal authorities however stopped a third round of EB5 loans for Dakota Provisions, and the Daugaard administration refused to allow an attempt at another round for Northern Beef shortly before the closure.

Nonetheless, Daugaard has other achievements to show in expansions of existing businesses and recruitment of a major dairy processor, Bel Brands, which plans to open a cheese-making plant at Brookings.

During his time as governor the past three years, South Dakota has seen forward momentum in much of the economy.

This wasn’t the case as he began his campaign for governor in 2009. South Dakota’s economy had contracted, and as the national recession deepened, South Dakota’s labor force fell from 446,920 in January to a low of 439,965 by November.

Unemployment worsened to 5.0 percent that February and began a streak where the jobless rate continued at 5 percent or worse for 23 of the next 26 months.

In November 2010, as Daugaard won election, a rebound from the recession was getting started in South Dakota. The labor force had grown back to 444,040 — but still below the pre-recession level — and employment came back up to 421,585.

In November 2013, the labor force reached 450,250, which was several thousands of people larger than before the recession. Employment reached a record 433,890. The unemployment rate was down to 3.6 percent.

November of last year was the sixth consecutive month that the jobless rate was back below 4 percent. The number of unemployed was 16,405, the fewest since the recession.

Unemployment in South Dakota

Here are the unemployment rates for November 2013:

  • Aberdeen 2.9 percent
  • Rapid City 3.6 percent
  • Sioux Falls 2.9 percent
  • Mitchell 2.6 percent
  • Pierre 2.6 percent
  • Spearfish 3.6 percent
  • Watertown 2.8 percent
  • Yankton 3.3 percent
  • Brookings 2.7 percent
  • Huron 3.1 percent
  • Statewide 3.6 percent
  • Nationwide 6.7 percent

The December labor numbers for South Dakota will become available starting Jan. 24 for statewide data and Feb. 5 for local data.