Economic Development Done Right

Underlying Governor Daugaard’s Economic Development Conference in Sioux Falls yesterday and today is one question: how does South Dakota create an environment for economic growth without sacrificing public interests?

Democratic leaders say the answers are a top quality education system that prepares youth for careers, encouragement of innovation and start-ups by local entrepreneurs, a fair tax system and intergovernmental partnerships involving counties, cities, schools, economic development organizations and other groups.

“Democrats are committed to adding economic development tools that strengthen our local businesses,” says Ben Nesselhuf, Chairman of the South Dakota Democratic Party. “But pitting economic development against the education our children need to compete for good jobs risks sacrificing both to accomplish neither.”

Nesselhuf referenced SD House Bill 1230, a measure allowing the governor to take 22% of the contractor’s excise tax, which currently funds education, health care, and other essential government programs, and instead uses it to pay for a subsidy program to attract new large corporate projects. A coalition of citizens across South Dakota has begun collecting signatures to refer HB 1230 to the 2012 general election.

Democrats and Republicans joined together in the 2011 Legislative Session to support numerous economic development tools including reform of the ethanol subsidy program, the sales of public lands to bolster the REDI Fund, incentives for the aviation industry and others.

Budget cuts that kill jobs and endanger our children’s education should not be part of South Dakota’s economic development plan, Nesselhuf explained, questioning Governor Daugaard’s philosophy of economic development.

“Are larger class sizes, higher local property taxes, fewer programs for students who need extra support, and fewer teachers to support our kids worth the cost of subsidizing large development projects like the TransCanada pipeline?” Nesselhuf asked.

Jonathon Toso, the Mayor of Canton, SD, which recently landed two new businesses to South Dakota and one large expansion of a current business, has touted policies focused on local growth first and expanding outwards after. “The first rule of economic development is to make sure you keep the people in your community here, you retain jobs, and then you try to attract new ones,” Toso explained.

Nesselhuf praised Canton for leveraging its high quality education system and economic development team.

“Canton shows us that economic development done right does not require egregious corporate welfare but the effective use of current tax incentives, responsive local governance, and a strong education system.”

The Canton school district has one of the highest high school graduation rates in South Dakota – proof of a strong education system that employers and families moving to Canton are sure to note.

If you would like more information on why Democrats support smart economic development, please contact Chairman Ben Nesselhuf at 605-271-5405 or ben@sddp.org.

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Background:

HB 1230

The South Dakota Legislature passed HB 1230 on party line votes in the House and Senate. The Governor signed the bill on March 11, 2011. [HJ 732, 3/11/11]

First Rule of Economic Development

Toso said such developments in town are important to continue offering employment options for the city.”The first rule of economic development is to make sure you keep the people in your community here, you retain jobs and then you try to attract new ones,” Toso said. “It’s so much easier to say than do.” [Argus Leader, 4/9/11]

Education and Economic Development Working Together

“Businesses need and demand high-quality education systems to educate and train their workers…” [Center on Budget and Policy Priorities, 9/4/10]

“Early Childhood Development: Economic Development with a High Public Return.” [Federal Reserve Bank of Minneapolis, 3/1/2003]

High School Graduation Rates: Canton, SD

According to statistics from 2008, the Canton School District (41-1) has the 2nd highest high school graduation rate in South Dakota. (See Table.) [Public School Review, 2008]

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