BREAKING: Democrats Submit Over 22,500 Signatures to Refer HB 1230

A coalition of concerned citizens in conjunction with the South Dakota Democratic Party submit 22,791 signatures today to refer HB 1230, a Daugaard Administration initiative that would divert money from the state’s general fund to a Large Projects Development Fund.

South Dakota state law requires 15,855 signatures from registered SD voters to refer a bill. That this petition garnered 22,791 signatures from Republicans, Democrats and Independents alike demonstrates the desire for a greater discussion of our state’s funding priorities, Chairman of the South Dakota Democratic Party, Ben Nesselhuf, explains.

“After a year in which the Legislature forced South Dakotans to shoulder the burden of such deep budget cuts, South Dakotans are eager to discuss whether our tax dollars should stay in education, health care and other essential services that depend on the general fund, or be diverted to a new large project development fund,” says Nesselhuf.

Governor Daugaard’s bill (HB 1230) passed the SD Legislature with Republican support on party-line votes. The bill skims 22% of the contractors excise tax each year from the general fund – approximately $16 million a year – and diverts it into the governor’s new fund for taxpayer funded giveaways to out of state corporations.

Democratic leaders fought the bill in the last legislative session, arguing that it may take up to $200 million over the next decade away from already strained budgets for education and healthcare that depend on the general fund.

Democratic House leader Bernie Hunhoff (D-Yankton) took issue with both the source of funds for the new program as well as its potential effectiveness. “It’s debatable whether corporate giveaways even work in today’s world,” says Hunhoff. “It’s an out-dated, backwards development strategy that does not invest in people at home. But we’ve told the administration that if they believe it does work, they should find an appropriate funding source. Don’t take the money from the general fund. Education is the best economic development program we have.”

State Senator Jason Frerichs (D-Wilmot) cited research from the Minneapolis Federal Reserve affirming the importance of education funding for long term economic development. “Businesses that come to South Dakota require a system of education that equips their workers with the skills necessary to succeed in the 21st century economy,” Frerichs reiterated. “Cutting funding for education in order to bankroll taxpayer funded giveaways to large out of state corporations will neither train our workers nor develop homegrown businesses in South Dakota.”

The bottom line is simple, Nesselhuf maintains:

“HB 1230 pits funding for our children’s education against funding for economic development. The reality is, South Dakota needs both, and we can’t afford to sacrifice one at risk of accomplishing neither,” says Nesselhuf. “Whether or not the program works is a matter of unsettled debate. It’s a matter of where the money is coming from.”

Contact Chairman Ben Nesselhuf at 605-271-5405 or ben@sddp.org.

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Background:

Education and Economic Development

“Early childhood development programs are rarely portrayed as economic development initiatives, and we think that is a mistake. Such programs, if they appear at all, are at the bottom of the economic development lists for state and local governments. They should be at the top. Most of the numerous projects and initiatives that state and local governments fund in the name of creating new private businesses and new jobs result in few public benefits. In contrast, studies find that well-focused investments in early childhood development yield high public as well as private returns.” Researchers later called the case for subsidizing private businesses “flawed and misguided.” [Federal Reserve Bank of Minneapolis, March 2003]

Business and Education:

“Businesses need and demand high-quality education systems to educate and train their workers…” [Center for Budget and Policy Priorites, 9.14.10]

Large Project Development Fund Unpopular

Public Policy Polling found that 62% of South Dakotans oppose the corporate give-away, while only 19% liked the idea. 18% were undecided. The poll questioned 1,667 voters between Feb. 25-27, 2011, and has a margin of error of +/- 2.4%.

Q: Governor Daugaard has proposed that the state take 22% of the contractor’s excise tax, which normally goes to fund health care and education, and use it to pay for a subsidy program to attract new large corporate projects. Do you support or oppose this proposal.

Support: ……………..19%

Oppose: ……………..62%

Not Sure:……………..18%

Margin of error: 2.4%

 

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