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Wednesday, December 3, 2008

Governor Rounds's Budget: Leadership or Cop-Out?

Links to Gov. Rounds FY2010 Budget Proposal:
Anyone listening to South Dakota Governor M. Michael Rounds's state budget address yesterday would have been struck by the number of times the governor said, "We do not have the money to do that." (Chet Brokaw found it as noteworthy as I did.) Evidently while President-Elect Barack Hussein Obama won the White House by saying "Yes, we can!" Governor Rounds intends to leave Pierre saying mostly "No, we can't."

I'm a little conflicted here. I understand that political leadership, like good parenting, means saying no at least as often as saying yes. It means facing reality, recognizing our limitations, and doing the best we can with what we have.

But sometimes political leadership also means doing something politically difficult to do something right. Yes, making cuts is hard. In South Dakota, it's even harder to ask folks to pay more to avoid those cuts. Are we really so strapped—or so cheap—that all of these cuts are necessary?
  • Eliminating the increasing/decreasing enrollment supplements for K-12 education
  • Shifting more education costs to local districts (remember, Pierre is already 50th in the nation for state share of education funding; Rounds proposes dropping the state's share from 57% to 55.3%)
  • Removing the sparsity factor from the K-12 formula (never mind the state's constitutional obligation to educate all children, even the ones in Bison and Faith)
  • Banning nearly all out-of-state travel by state employees
  • Cutting medical aid to pregnant women
  • Cutting flu vaccines for kids
Governor Rounds says all of these cuts are "no different than what families do during tight economic times." That's true. It's what we do at our house. But sometimes when we need that flu shot or that health insurance, we seek additional income. We take a second or third job. We cash in the trust fund (and South Dakota is a lot better of in that category than any Heidelbergers I know). We take a loan.

Governor Rounds did show some fiscal courage yesterday in requesting some fee increases... though he still had to euphemize them at the start of his address as "updates." He recognizes that obtaining more revenue is part of the solution.

However, as he has done throughout his administration, Governor Rounds largely abdicated his leadership on the revenue side. As usual, he made the idea of raising taxes sound like a threat, daring legislators who want to increase spending or just preserve important programs to explain how they'll find the money... as if proposing straightforward ways to pay for our priorities is a moral failing.

As I said, it takes political leadership to face reality and live within our limitations. However, Governor Rounds appears to set our limits from an ideological starting point—no new taxes, no deficit spending—and then forces the budget to fit those conceptions.

If things are bad, maybe it is time to set ideology aside and just get things done. Maybe we need to break with tradition and engage in some deficit spending (Paul Krugman won the Nobel Prize in Economics, and he thinks deficit spending is o.k.). Maybe we need to propose some tax increases to cover our shortfalls (Governor Janklow did that in his first term).

Political leadership does mean saying no, and we're going to hear a lot of no from Governor Rounds and our own District 8 Senator Russell Olson. But District 8 is also sending Representative Gerry Lange to Pierre; expect him to demonstrate the other side of political leadership, the side that responds to, "No we can't" with "Yes we can, and here's how."


  1. If given the choice of spending less or having our governor beg Washington for more money, I think Rounds is doing an excellent job.

    South Dakota values are work hard and don't take handouts. If you can't afford something, do without.

    When governments tax more, they waste more. So why not tax less and waste less.

    As Rounds pointed out, the schools will have more in reserves than the state, yet we should give the schools more money?

    Sioux Falls has money to burn, million dollar murals in Washington High School, $68k/year for Spanish teacher to immerse the kids in Spanish and countless other wasteful programs.

    While I do agree the rural schools are hurting, they should look towards Sioux Falls School district to kick some money back, not the state.

    SD is not a welfare state, we work hard and we take responsibility for our actions and we don't expect the government to take care of us.

    I would rather (and do) give to charity rather than give to the government. At least when I give to charity I know it is for a good cause!

  2. The Dems answer to everything is to increase taxes and expand gov't programs. Reps answer for the most part is to decrease taxes which encourages more economic development and for people to rely more on themselves than the gov't.

    Same thing here. The economic problems caused our state problems as well. (I have my own opinion as to the root causes and timing of this economic meltdown, but won't bother people with them here.) Now we all have to tighten our belt and live within our means. And yes, that also means education, welfare, etc. Think more individual responsibility, less reliance on gov't.

    My parents had little money in the 1950's. I remember seeing a notebook of my mom's where she listed every penny she spent, down to a few cents for a spool of thread. We had little, made do with what we had, had all we really needed, and we kids appreciated everything. Let's get back to that. If you can't afford something, don't buy it. If the state can't afford it, they can't do it. If you make stupid decisions, maybe you should pay for them instead of the gov't - might make people think more before making a stupid decision actually.

    We need a safety net for those truly incapable of caring for themselves. We don't need a safety net for those who can but choose not to take care of themselves and the results of their decisions.

    Regarding education,a free public education was never meant to include counseling, school nurses, long bus trip for athletics, athletics at all actually, or other extracurriculars. It was meant to EDUCATE, not socialize. Get back to academics, cut the rest, and if our economy recovers and we can afford other optional things, then consider reinstituting them. We "can do" as the saintly Obama says, but maybe it means taking a different approach.


  3. At least Rounds is trying to be fiscally responsible with the taxpayer dollars he has. Not quite like our Congress in Washington which is saying, "Send my your poor, your huddled mass, yearning to be free (of debt)" and I will bail you out!

  4. Cory, we agree on a lot of things, especially regarding the federal government. But now I have to disagree with you.

    Some years ago, I lived in California, where deficit spending is the rule. Look at their "state of the state" now! I've also lived in Wisconsin, where the taxes are much higher than they are here, and the budget crises seem to be severe and never-ending.

    We South Dakotans still have a surplus, to this bloody day!

    I wish I could remember where I heard the following little factoid. It was probably South Dakota Public Broadcasting, because that's the only radio I listen to any more. North Dakota, South Dakota, and Texas are weathering the current economic troubles better than the other 47 states, so they said.

    California and Massachusetts, two icons of tax-and-spend philosophy, were the first states to ask for part of the government bailout money.

    Governor Rounds has done some things that I find puzzling or counterintuitive. But not too often. We're weathering the economic troubles here better than most for a reason: We are a frugal lot. Mike Rounds is frugal -- maybe even stingy -- and the people of this state know it. That's why he creamed Jack Billion in the election.

    Let's never, ever become another Massachusetts or California, taxing our citizens half to death, living beyond our means, and then, when that formula fails, asking somebody else to bail us out. I came to this state in large measure to get away from that horseradish.

  5. Luv em or hate em, Rounds and the SD legislature are bound by the SD Constitution to have a balanced budget.

    I am proud that our state gov't has refused to spend wildly when times are tough.

  6. Hang on, Terry: "SD is not a welfare state"? Um, South Dakota regularly makes the top ten of states getting more back from Washington than they pay in. South Dakota, like Alaska, Arizona, and other popular rural Republican handouts, couldn't maintain their standard of living if it weren't for government handouts. We do seem to expect the government to take care of us.

    Unless, of course, you'd like to start a charity to do our road maintenance.

    Stan, I'll admit, I love having a balanced budget. I hate debt. but the debate we're going to have through the 2009 Legislative session is whether cuts will be enough to keep that budget balanced... and whether those cuts are actually worse for us than either borrowing money or raising taxes. If cuts alone do it, great, but we can cut too far (there is some minimum amount you need to pay your people and run your schools). If cuts won't do it, I'd rather pay taxes than run a deficit... but we need to consider those options, and those options were tellingly (ideologically) absent from yesterday's address.

  7. Dang, that's right, Mike! Oh well -- scratch deficit spending off the options list!

    (Hey, which line in our state constitution contains that language?)

  8. What's wrong with being financially responsible? At least the governor is not spending our money like the drunken sailors we send to Washington.Did I hear that there are 16 states that are so destitute that they have to ask the federal government for a bailout. We won't be among them. Hats off to Governor Rounds. Maybe the rest of the country could learn a lesson from the people of South Dakota.Corey maybe you would be happier living in California where taxes are through the roof and they are in debt up to their a$$e$.


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