Are Municipalities Illegally Using Your Tax Dollars to Campaign for Referred Law 14?

Democratic House Leader Bernie Hunhoff (D-Yankton) discovered something really unsettling today. In potential violation of state law, the South Dakota Municipal League, whose dues are supported by sales taxes and property taxes of member cities, supported Referred Law 14 with a full page ad on its front cover.

Now, everyone is entitled to his or her own opinion – and polling shows the vast majority of South Dakotans oppose taking money from the general fund for giveaways to large out of state corporations – but using your tax dollars in support of electioneering is exactly why Governor Daugaard and Pierre’s corporate lobbyists just can’t be trusted with more money.

See the full press release below. It’s worth reading in whole.

Corporate Lobbyists Use Your Tax Dollars to Get More Tax Breaks

Sioux Falls (Oct. 1, 2012) — Using taxpayers’ dollars to campaign for more taxpayers’ dollars is wrong says Rep. Bernie Hunhoff, the Democratic leader of the S.D. House of Representatives.

Big business lobbyists pushing for a new $20 million per year corporate welfare program have stooped to a new low by using a publicly-funded magazine to promote their partisan pitch for tax dollars, he said today.

Corporate lobbyists have been trying to line up public and private support for House Bill 1230, the governor’s economic development bill that was passed by Republicans in the 2011 legislature, but blocked and referred to a vote in the Nov. 6 election when more than 20,000 South Dakotans signed petitions to stop the law.

Big business lobbyists are campaigning to support the tax give-away program. “It’s the American way to solicit private money for your political cause,” Hunhoff says, “but it absolutely crosses the line, and possibly violates state law, when you get public organizations to use their resources.”

The Yankton lawmaker said corporate lobbyists have been successful in pushing some state chambers of commerce and other quasi-public groups into endorsing the new program.

This week, the South Dakota Municipal League supported Referred Law 14 with a full-page ad on the front cover of its monthly magazine, “South Dakota Municipalities.” The magazine is supported by dues from its membership of cities, who get their revenues from sales taxes and property taxes.

“Corporate lobbyists have benefitted by using our own tax dollars to promote an election issue that they hope will reap more tax dollars for their corporations,” Hunhoff said. “That’s about as unfair as anything I’ve seen in South Dakota politics and elections.”

Yvonne Taylor, the executive director of the South Dakota Municipal League, also endorses the corporate fund in her half-page editorial on page four of the October issue. On page 15, municipal publication printed the Secretary of State’s pros and cons and the attorney general’s explanation.

Ben Nesselhuf, chairman of the South Dakota Democratic Party, added that Chambers of Commerce and other organizations around the state have also been put in a difficult position by the corporate lobbyists. “Obviously, our Chambers and every organization in South Dakota have good people on both sides or this issue and it’s not constructive to be forcing them to take sides when there are clearly two sides, and millions of taxpayers’ dollars at stake.” Some local chambers of commerce also get a portion of their revenues from local tax dollars.

The use of taxpayer funds for election purposes appears to violate two statutes, 12-27-20 and 12-26-14. “I don’t want to get anyone in trouble, but I do want a fair election and a fair discussion of this important matter,” Hunhoff said.

Nesselhuf said the proponents of Ref. Law 14 want to skirt the real issue. “They sometimes imply that there’s no other economic development tax dollars. That’s not true. We have REDI funds, Futures Funds, TIFDs, discretionary property tax dollars and numerous other monies and methods to attract and retain large corporate projects. Plus we have no corporate income tax, and the best and cheapest workforce in the nation.”

But, said Nesselhuf, “if we need still another give-away program then we should find an appropriate funding source for it. It’s not right to start a new program out of the general fund. That’s not how we do things in South Dakota, especially when we just cut the schools $50 million and also cut tens of millions from health care services for the poor children and senior citizens.”

Hunhoff said previous governors have steadfastly protected the general fund from new programs, recognizing its importance to school funding. “Gov. Janklow and Gov. Mickelson both found funding sources for their new economic development programs, and they worked hard — along with legislative leaders from both parties — to stop lawmakers from trying to fund new programs out of the general fund.”

He said education is obviously the best economic development program in state government. “Nobody argues that,” he says, “yet we cut the schools $50 million at the very same time that the corporate lobbyists and the governor want to start a new program with general fund dollars.”


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