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Daugaard urges training for needed jobs

By Chet Brokaw PIERRE (AP) -- South Dakota must take additional steps to train and attract people to fill the jobs needed to fuel the state's continued economic growth, Gov. Dennis Daugaard said Tuesday in his State of the State address kicking o...

South Dakota Gov. Dennis Daugaard State of the State speech
South Dakota Gov. Dennis Daugaard delivers his State of the State speech to lawmakers Tuesday at the Capitol in Pierre to start the 2014 Legislative session. (Sean Ryan/The Daily Republic)

By Chet Brokaw

PIERRE (AP) - South Dakota must take additional steps to train and attract people to fill the jobs needed to fuel the state's continued economic growth, Gov. Dennis Daugaard said Tuesday in his State of the State address kicking off the legislative session.

The Republican governor said he plans to help school districts offer more technical courses, provide state scholarships for some students at South Dakota's four technical institutes and set up meetings around the state so business and community leaders can discuss ideas for workforce development.

Daugaard acknowledged that a program he started two years ago to pay a company to recruit workers for South Dakota businesses didn't work out well. He said the state will instead renew its focus on a program that seeks to persuade former South Dakotans to return to work in the state, which has the nation's second-lowest unemployment rate at 3.6 percent.

"Our low unemployment is a sign of our economic strength, but it also means it's difficult for employers to add more jobs, even if they have the business to justify it," the governor said.

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The governor also urged lawmakers to support proposed revisions in laws dealing with insurance regulation and bank taxes.

However, much of the speech dealt with the state's growing economy. South Dakota is one of only 15 states that have recovered all the jobs lost during the recession, Daugaard said, noting that the state now has 10,000 more jobs than before the recession, a growth of 2.5 percent.

"What is the state of our state today? The state of South Dakota is strong," Daugaard said.

Legislative leaders said they liked Daugaard's focus on the state's strengths and its need for more trained workers.

House Democratic Leader Bernie Hunhoff of Yankton said the minority party will work with Daugaard on workforce development, but he said key parts of the effort should involve funding school districts adequately and dealing with poverty. Schools cannot provide enough technical education because they haven't recovered from budget cuts made several years ago, he said.

"We've just devastated the school districts' budgets," Hunhoff said.

Senate Republican Leader Tim Rave of Baltic said South Dakota will always have trouble attracting workers because it's a rural state with cold winters, so he's pleased Daugaard is focusing on enticing former state residents to return. He said the governor's speech was generally upbeat.

"Things are actually really good in South Dakota, and he pointed that out," Rave said.

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Daugaard two years ago announced a wide-ranging plan to train and attract more workers for hard-to-fill jobs. One element of that plan involved paying a company to help South Dakota businesses recruit 1,000 workers, but it was recently scaled back because it only recruited about 100. The governor said he now wants to put more emphasis on the Dakota Roots program that has succeeded in getting more than 3,000 former South Dakotans to return home for jobs.

The governor also said he will provide at least $5 million in grants to help school districts offer more career and technical education, which includes welding, machining and health care technology.

Another $1.5 million will be provided in the next three years to support scholarships for students studying 20 high-need fields at the state's technical institutes. Scholarships of up to $5,000 for two-year programs will be provided to students who agree to stay and work in South Dakota for three years after graduation, Daugaard said.

The governor said the state's bank franchise tax must be revised to reflect the complexity of modern financial operations. Banks pay the state tax based on the share of their receipts attributable to the state, and large interstate banks located in South Dakota often have some lending and credit-card processing services done in other states, he said.

The proposed changes in the bank franchise tax will apply to nine large interstate banks, but not to community banks, Daugaard said.

"We need to modernize our statute, but we also should maintain our tax revenues. I'll say that again - maintain, not increase, our tax revenues," he said.

The governor also noted that some cases recently demonstrated that the state Insurance Division lacks the legal authority to properly protect people from being hurt by insurance companies. He said the division now cannot fine insurance companies unless those companies agree to the penalties, and it cannot inform consumers if their insurance company has agreed to a remedial action.

"I think you all know how much I believe in South Dakota's common sense regulatory environment. I don't like overregulation. There is, however, a vital role for government to play in protecting customers," Daugaard said.

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