Live-Blog! Governor Rounds's Last (Thank Goodness) Budget Address

Governor M. Michael Rounds is in the State Capitol and on SDPB right now telling us how he'd screw education if he were around for another term. Here's my live-blog (hit Refresh/Ctrl+R/F5 for updates!):

Actually, Dennis Daugaard gets to lead off. He expresses his thanks to his great friend, Mike Rounds, for being "a leader and a mentor, a negotiator, a strategist," but above all a friend. (And he says this, even having seen the budget report? That's loyalty.)

13:09 CST: Dennis and Mike shake hands, Gov. puts hand on Gov-Elect's shoulder... aw, no hug.

Oops! Ovation almost petered out... then someone decided it wouldn't be cool for the applause for the sitting governor to run shorter than the applause for the governor-elect.

13:12: Governor Rounds says we face "an unpredictable economic recovery." We have $107M in reserves available. These are rainy day funds that we didn't use during the actual rainy day, which still didn't rain that hard in South Dakota.

Important: some of the reserves-dipping that Rounds is finally proposing are to balance this year's budget, not just next year's.

13:13: Wow: $21M less from the Bank Franchise Tax, down from projected $24.9M to only $3.9M. Guess the banks aren't making money hand over fist any more on high interest rates. Governor Rounds embraces usury and blames federal credit card regulations. Contactors excise tax down $14M, but sales tax up $10M.

Rounds proposes using $14M in reserves to finish FY2011 on budget, then $36.9M in reserves to balance FY2012.

13:17: Sales tax is the biggest revenue source for the state, projected about $700M in FY2012. Second biggest chunk of state revenue: video lottery, over $150M.

Projected Revenue increase only $8M, projected expenses for FY2012 still up $32M. More spent on Medicaid since stimulus is running out (and I don't hear Rounds thanking Uncle Sam for the help over the last couple years). Expenditures on education and public safety are projected to go down.

FY2011 structural deficit: $108.4M. Even with the proposed cuts and reserve spending, Rounds says we'll still have a $74.8M structural deficit in FY 2012. (Tea partiers, bring your shouting home!) Governor's graph shows a structural deficit every year of his administration but FY2007. The recession exploded that deficit... even though that recession never caused our state economy to shrink. What gives? Why isn't our increasing wealth pouring some increasing fair share into the state coffers?

13:27: Bad, nasty, evil, ineffective federal stimulus dollars will cover $36.9M of next year's structural deficit.

The stimulus dollars granted previously forbade cuts to Medicaid and K-12 education for FY2009, 2010, and 2011. The new "Stimulus 3" funds prohibit cuts to K-12 and higher education (even though, Rounds whines, those stimulus dollars don't provide any higher ed support) and prohibit growing the reserves.

13:29: Rounds says stimuluses. Oh! Why couldn't he have said stimuli?

And now, I think Rounds is actually trying to tell us that the federal stimulus dollars caused the structural deficit. No, Mike: it's your and the Legislature's fiscal cowardice that has caused the deficit.

13:31: State revenues spent on general fund expenditures will be almost $1.2B, plus another $36.9M in stimulus dollars. Ah, but Stimulus 3 will require a $10.6M increase in Board of Regents spending, so it replaces much less than $36.9M in general fund spending.

13:35: Rounds says we still need to come up with another $39.2M in state funds to cover our general funds needs and make up for the end of the stimulus package.

SDPB gives us a quick view of House Minority Leader Mitch Fargen. He looks unimpressed.

Rounds talks about FMAP money being based on personal per capita income relative to the national average. Since our economy has outperformed the national economy—i.e., because we are increasing our income faster than the rest of the country—we have to cover more of the costs. And Rounds seems to think this is unfair. It seems Uncle Sam has the right idea: if your state is doing better than others, you should be able to cover your own costs. But you can't do that if you aren't taxing that increased income, if your tax system is still a regressive, property- and consumption-based system!

13:39: Rounds shows us $39.2 in new ongoing funding required to replace ending stimulus, $15.0M to increase our FMAP state share, and $11.7M in increased Medicaid demand. That's a total of $65.9M. Make $36.1 in cuts, and we still need $29.8M more to cover our needs.

13:44: The Governor's chart shows cuts in every state department. Governor's office takes a $236K cut; Legislature takes a $239K cut. 2010 research centers and Cultural Heritage Centers get big cuts. $23.5 million cut from state aid per student K-12. That's the $240 per student, about 5%. Also reducing technology in schools budget, consolidation incentives.

Net $15M reduction in education spending. Rounds emphasizes Medicaid providers are taking a 5% hit, while some state offices are taking 6, 7, 8, maybe 10% cuts.

Rounds: "I want to share a little bit..."—there's an inapt phrase.

Rounds cites $123.1M in school district general fund cash accounts back in June 2003. $183.9M in June 2009 in cash accounts. June 2010: $194.3M. Rounds is saying that the good people running the schools have very responsibly saved money recognizing that cuts could come. Translation: screw 'em. Force the local districts to burn up their reserves.

13:50: Board of Regents gets an FTE increase of 227.5. A lot of that is linked to federal and private grants. Ax is falling on FTE's everywhere else.

Note that the net education cuts, counting K-12, tech schools, and Regents, is only $11.45M. 'Taking Care of People" goes up $40.97M. Protecting the Public (cops and such) gets $4.2M more. The rest of state government gets cuts [oops! missed the number!].

13:54: Special appropriations for FY2012: Rounds cites seven presidential (blame Obama) disaster declarations in South Dakota this year, plus seven disasters from previous years still being tackled. State needs to authorize 10% match to federal disaster dollars, local governments are supposed to do 15%. Some locals, especially northeastern South Dakota, don't have that cash, so the state has kicked in extra funding to help repair roads. Rounds says we'll need $13.4M to cover this in the FY2011 budget. He requests only two small specials for FY2012 on tuiton and tax reimbursements for old folks, total not much more than $14M for the 2011 Legislature to approve.

13:58: I check my inbox and find new SD Dems chair Ben Nesselhuf calling Rounds's address a "Broken promise" and says the proposed change to the K-12 funding formula: "broken law marks new attack in GOP War on Education." (ben, did you Tweet that from the floor? ;-) )

The state will spend $1.194B in general funds. Federal funds will contribute another $1.876B. Other funds make up $1.004B. In total, South Dakota will spend over $4 billion in FY2012. And pay attention Tea Party friends: almost half of that is from Uncle Sam. So tell us what you're going to do about that, Senator Thune and Rep.-Elect Noem.

Rounds breaks out the goofy dollar graphic, notes that his budget would spend 49 cents out of every dollar on K-12, higher ed, tech schools, and the Department of Education. He answers exactly the question I was thinking about and shows that back in 2004, education made up 55% of the state budget. "Taking Care of People" ate up 30% then, eats up 37% now. There's the big flip. Rounds also notes that the share of spending on state government has gone from 5% of the budget in 2004 to 4% in his proposed budget.

In this entire speech, I think I have heard Governor Rounds mention "increased taxes" once, and he barely finished that last consonant before hurrying to the next sentence. Now he is speaking of spending South Dakotans' tax dollars wisely, as if that money is a fixed sum, as if the idea of increasing that revenue is inconceivable.

Mike Rounds says South Dakotans have the highest average credit rating in the nation. He says we don't buy what we can't afford. He says the legislators have to answer to those taxpayers who aren't in the Legislature, who are back home working. he says they have to be willing to say no to all those great programs people want. Again, no mention of the idea that some good, honest South Dakotans might be willing to pay more to keep those great programs.

14:10: But hey! We're still working hard to make South Dakota an even better place to raise a family. Rounds says 27,000 more people have jobs now than in September 2002. He mentions saving Ellsworth AFB from closure (again, he offers no thanks to Uncle Sam for all those dollars). He brags again about not touching the reserves until now. He says K-12 is getting $109M more each year now than in 2003.

Boy, for heartfelt words of thanks to state employees, the Governor is sure looking at his script a lot. Where's the teleprompter patrol that yells at President Obama for things like this?

Another inapt reference: Rounds mentions that today is Pearl Harbor Day.

14:14: Governor Rounds is now distracting us from the budget discussion by wrapping himself in patriotism, talking about what wonderful soldiers we have in the National Guard and the regular service... yet another great source of federal income for South Dakotans.

Rounds talks about being elected to make South Dakota a better place. And he ends his term with a budget plan that would make K-12 education worse. How tone deaf is this governor?

...and SDPB ends with a great picture of some guy's shoulder in the gallery.

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Now I suppose we could spend a lot of time picking this budget apart. But I am really, really hoping that this slideshow is going right to the trashbin, and that we can eagerly anticipate the first big number-crunch from the Daugaard administration that might have a little more vision behind it.

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

Links to Gov. Rounds FY2010 Budget Proposal:

• Video
• Audio
• Transcript
• SlideShow
• More Details

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."

Rounds Budget Ignores $29 Million Funding Gap for Homestake

This week, reporter Bob Mercer declared that Governor Mike Rounds's effort to realize Bill Janklow's vision of converting the Homestake mine into a world-class research facility would be recognized as the greatest achievement of the Rounds administration. In a November 12 blog post, blogger Pat Powers pointed to the Sanford Underground Laboratory in Lead as "Mike Rounds' one crowning achievement."

The biggest jewel in Rounds's legacy crown may have just fallen out. Last week the National Science Board decided to ax a $29-million grant that the National Science Foundation it oversees had authorized for the Sanford Lab last year. The National Science Board had lots of good things to say about the lab when they visited in September, But now board member Mark Abbott says the Department of Energy, other agencies, and perhaps international sources should fund the project instead of NSF.

The Governor has spent "countless hours on the phone" with Washington trying to fix this funding flop. Losing those funds would be bad for the lab, even in the short-term. Governor Rounds says at the very least, the scientists at the lab need steady funding for job security. Ron Wheeler, director of the South Dakota Science and Technology Authority that runs the lab, told legislators last month "We’re not looking for the (South Dakota) taxpayers to cover any more expenses for the authority."

Comparison: Governor Rounds has asked for a $39 million reduction in state aid to K-12 education.

The Governor already had to cajole the Legislature to approve $5.4 million in additional funding last winter to keep the lab afloat until the NSF funding was anticipated to arrive in May 2011. The disappearance of that NSF funding could create an ugly political situation in a legislature already being asked to cut K-12 education 5%.

Significant as this decision is, it is thus surprising that Governor Rounds made no mention of it during is budget address on Tuesday. His budget proposal includes a $10.6M reduction in the Science and Tech Authority in anticipation of the NSF grant:

The total recommended FY2012 budget for the South Dakota Science and Technology Authority is $8,960,000 in other fund expenditure authority and 5.0 FTE. A decrease of $10,639,023 in other fund expenditure authority and 65.0 FTE is being recommended because the National Science Foundation (NSF) is expected to take over the Deep Underground Science and Engineering Laboratory (DUSEL) operations in the spring of 2011 [State of South Dakota Governor's Budget: Fiscal Year 2012, p. 47].

The National Science Board met December 1–2. Governor Rounds presented his budget December 7. It seems odd that the Governor would not address a significant budget setback for a project so important to South Dakota's educational and economic development, not to mention the Governor's "legacy."

I share the Governor's desire to see this project go forward. I sincerely hope that this governor's greatest legacy may be a facility for the eggheads and intellectuals who too often get short-shrift in South Dakota culture.

But if the Legislature and South Dakota taxpayers aren't going to be asked to cover the gap again, who's left? We could hit T. Denny Sanford up again... but I have a feeling we're going to enjoy the splendid irony of Republicans John Thune, Kristi Noem, Mike Rounds, and Dennis Daugaard working hard to win more money from Washington, D.C.

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possibly related:

While stopping all the tax hikes would be a good first step, this alone won’t eliminate the job-killing uncertainty hanging over our employers and entrepreneurs.

That’s why we need to focus on cutting spending and reducing the size of government. The American people want us to stop spending dollars we don’t have.

To do that, we need to start taking a long, hard look at the size and scope of government and find new ways to resist Washington’s urge to grow and to grow. Let’s do a better job of following the money and evaluating the effectiveness of government agencies [Kristi Noem, GOP radio address, 2010.12.11].

Update 2010.12.13 10:06 CST—Definitely related: Dr. Newquist's discussion of the Homestake Lab. He notes that the NSF may not have been authorized to make the $29-million "commitment" we thought we had for the lab.

Update 2010.12.14 11:30 CST—Mr. Kurtz was an interested party in the mine once.

Rounds Chooses Technicalities, Not Life

When Governor Rounds stayed Elijah Page's execution last night, the news carried comments from relieved protestors, including one woman on KELO TV who said she knew that the Governor had it in him to spare Page's life. She averred that Rounds is a good man, as demonstrated by his support for the abortion ban (now Referred Law 6 on the November ballot). Others now may draw the conclusion that Rounds holds a consistent pro-life vision.

Nothing could be further from the truth. In his press conference yesterday laying out his reasons for the stay, Rounds said absolutely nothing about sparing Page's life or even sparing the convict cruel and unusual punishment. Rounds couched his decision entirely in terms of the particularities of South Dakota statute. South Dakota's death penalty law, written in 1984 (and evidently not reviewed by the governor until yesterday afternoon around 4 p.m.), specifies the use of a two-drug combination in the lethal injection chamber. Board of Corrections officials had made plans to use the 3-drug combination that apparently has become the standard in other states. The only reason Governor Rounds postponed the execution was his concern that state employees participating in the execution might have faced legal penalties afterward. He thus has stayed the execution until July 1, 2007, by which time he expects the legislature will have addressed the issue in its winter session and cleared the way for the execution to take place in a legal fashion.

As he did on the first abortion ban to come to his desk in 2005, Governor Rounds has avoided making a moral decision and instead played the bureaucrat. He has successfully delayed the execution, South Dakota's first since the 1940s, until well after the election, when he can calmly oversee the state's killing of a man without facing any awkward questions from his voters on their way to the polls about the depth and consistency of his pro-life stance. Governor Rounds has not answered anyone's prayers besides his political consultants, who know that the two-drug mix of abortion and the death penalty, while perhaps not guaranteed lethal, could cause Rounds some cruel and unusual punishment at the hands of his fellow Catholics and other riled voters in his effort to be re-elected governor.

The debate on an issue as serious as the death penalty, the state-sanctioned pre-meditated killing of individuals who have already been contained and deprived of their state-given rights, should not center on technicalities. True political leaders would engage us in a conversation about the fundamental values involved. True political leaders would face up to and either defend or resolve the apparently contradictory position of forbidding a rape victim from seeking an abortion because of our dedvotion to the sanctity of life but allowing a brutal criminal to dictate the terms of his punishment and assisting in a suicide. Governor Rounds is failing to show that leadership on this moral issue.

Rounds Says Ax K-12 Education 5%: I Say Invest in Students

Yesterday the Associated School Boards of South Dakota called on the Legislature to follow the law and increase K-12 education funding by 1.3%. That's a pretty modest request, given that ASBSD's position for the past few years has been to call for an overhaul of the funding formula that would direct much more money toward K-12 education.

Hours later, outgoing Governor M. Michael Rounds called on the Legislature to change the law and cut K-12 education funding by 5%. That follows the Legislature's move last session to rewrite statute and yank a promised 1.2% increase out from under our schools.

This K-12 cut saves $23 million total. The governor's proposed budget, which he'll lay out in Pierre this afternoon (covered live on SDPB), still leaves a $37 million deficit.

There's Mike Rounds's legacy: years of structural deficits that neither he nor the Republican Legislature had the guts to fix. Rounds's limp fiscal policy doesn't even qualify him as a caretaker governor. Today's budget address promises to be one more wimp-out.

So let's talk guts: is it really less painful to nickel-and-dime our teachers and kids than it is to cowboy up and raise our taxes? We have about 100,000 students [2010.12.09: whoops! update that: 123,629 students!]... which leaves about 700,000 of us South Dakotans to pay taxes. Governor Rounds says short each kid $240. I say charge each taxpayer an extra $33 to keep education funded at its already paltry level.

Thing is, you and I are going to end up making up the difference anyway. Odds are your school district and mine will not take a 5% cut. If Governor-Elect Daugaard and Majority Leader Russell Olson pass this plan, you will see opt-outs spring up almost everywhere, as local districts try to fill the gap. Taxes will go up for many South Dakota taxpayers anyway; Governor Rounds just doesn't have the guts to be the one to ask for it.

The odd thing is that we have the wealth to withstand a tax increase. South Dakota technically never joined the recession: our economy has grown each year. Our GDP went up 2.2% in 2009, and I don't see data suggesting less growth this year (though I'm open to counter-evidence). The new South Dakota Budget & Policy Project (oh my: this website looks really cool!) says sales tax revenues are looking up.

Our tax system is clearly not tapping the wealth our state is creating. In other words, we aren't paying the full price of civil society, the cost of maintaining the schools our kids need and that make our wealth-creation possible.

Maybe we shouldn't get all hot. Maybe this mad-axeman budget is just Governor Rounds's parting gift to his lieutenant, who come January can ride in and save the day with improved revenue projections and a noble compromise that changes the funding formula to only freeze K-12 funding again rather than cutting it 5%.

In the understatement of the week, Mr. Crissman at DWC calls 5% "noticeable." I call Rounds's farewell proposal irresponsible. It's a non-starter: no guts, no vision, no sense of basic social obligation. Governor Rounds leaves affirming the South Dakota Republican belief that education is an expense, not an investment.

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Bonus Timing: Governor Rounds's official portrait will be unveiled for public viewing following the budget address. Expect tepid applause... and maybe some Post-It note mustaches.

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Update 07:45 CST: At least we're not California. But Marc Albert's comment on the California situation has relevance here in South Dakota:

Hyperbole or not, much of the chaos could be avoided by finally convincing state taxpayers that you can’t get something for nothing forever. There may be waste and fraud in the public sector, but not $25 billion worth. Complain about lousy teachers, public pensions and long lines at the DMV all you want — it isn’t going to change the figures on the ledger [Marc Albert, "California's Public Schools in Downward Spiral," Understanding Government, 2010.12.07].

Rounds Joins Jindal Jive, Stiffs Stimulus

...not to mention workers.

South Dakota Governor M. Michael Rounds joins the ranks of Republican governors playing politics with the stimulus package, telling that Sioux Falls paper that he will reject five million dollars of unemployment insurance included in the stimulus package. Governor Rounds says he's concerned that accepting the money could (could—I have yet to hear a single governor say it will) require South Dakota to raise its unemployment insurance tax in a couple years after the stimulus money runs out.

The Republican commentariat celebrates, but Governor Rounds's gambit is pure political theater, not to mention bad economics:

1. The $5M Governor Rounds would so bravely reject is less than 1% of South Dakota's expected $662.5M stimulus take. That's like picking only the blue sprinkles off your birthday cake.
   
2. Unemployment benefits are one of the most effective economic stimulus tools available, with every dollar generating $1.64 in economic activity. That's second only to increasing food stamp benefits for direct economic impact and better than infrastructure spending, general aid to state governments, and tax cuts, none of which Governor Rounds is poo-pooing.
3. The "strings" on the unemployment aid Governor Rounds doesn't like are actually requirements that the New York Times says at least half of the states have already enacted:

   To qualify for the first one-third of federal aid, the states need to fix arcane eligibility requirements that exclude far too many low-income workers. To qualify for the rest of the aid, states have to choose from a menu of options that include extending benefits to part-time workers or those who leave their jobs for urgent family reasons, like domestic violence or gravely ill children [editorial, "What Part of 'Stimulus' Don't They Get?" New York Times, 2009.02.23].

4. The "strings" would actually modernize unemployment insurance rules to take advantage of computerized income reporting (ah, computers: that's why Gov. Rounds doesn't like it).
   
5. The rule changes would expand coverage by keeping better track of part-time and low-income workers... you know, folks who could probably use more help than the GOP's Wall Street pals.
6. The whole point of the stimulus package is to shorten the recession. Boost the economy and get people back to work sooner, and the state won't have to draw down its unemployment insurance funds as quickly. Let the recession roll, and we'll be raising unemployment taxes sooner to replenish the more quickly depleted fund.

Governor Rounds and his posturing pals are standing in the way of one of the most effective stimulus tools we have available, not to mention fair and effective upgrading of their states' unemployment insurance rules. Let's put politics aside, do what's right for South Dakota workers who can use the help, and take our best shot at boosting the economy.

Rounds Budget: Living in the Now

Let's take a spin at the latest Madville Times poll. The question: "Do you approve of Gov. Rounds's proposed state budget?" Your answers:

• Yes: 5 (8%)
• No, spend more: 30 (54%)
• No, spend less: 21 (38%)

Choose your interpretation:

1. The anti-Rounds line: More than 90% of South Dakotans think Governor Rounds has failed to submit a budget that meets the needs of South Dakota.
2. The pro-Rounds line: When nobody's satisfied, you've obviously found the perfect compromise.
3. The Tea Party line: Nearly a majority of South Dakotans agree that we shouldn't have bigger government! We're on the way to victory!

My line: If I were Dennis or Scott or Scott, I'd be torqued. Governor Rounds is living in the now and kicking the can down the road to whatever real statesman (or kamikaze pilot) takes the reins in Pierre in 2011.

Now maybe I should go easy on the Governor. I appreciate the point Governor Rounds made in his budget address that his proposed budget gets us through another year of recession with our budget reserves intact.

The problem is, that's about the only gift he's leaving the next governor and the 2011 Legislature. The proposed budget is an act of abdication, not leadership. Governor Rounds offers no new ideas or significant changes in how the state does business that might lay the groundwork for a lasting local solution to the big budget shortfall we face after we've spent all the federal stimulus dollars. (Boy, for all his erstwhile grandstanding, Governor Rounds sure seems glad to have Uncle Sam bailing out two budgets in a row.) His plan is all increasing one big tax (freeze the levy instead of the usual reduction that offsets increased valuation), hoping the recession will end and sales tax revenues rebound, and shifting the hard work of raising education dollars to more local boards who will have to opt out to keep pace with costs.

Even his pay freezes for state employees put the 2011 Governor and Legislature in a tighter bind. Sure, freezing pay makes some business sense, but another year of no raises makes it that much harder for the next administration to go to that trough for more budget savings.

The responsible thing to do would be to put a budget fix in place now that doesn't just get us through the recession but gives the following administration more options for meeting everyone's needs. Unfortunately, the Rounds administration appears content to dodge the bullet and let someone else make the hard choices.

Governor Rounds Wants Another Income Tax

Folks give my neighbor Gerry Lange heck for fighting for a state income tax. So where's the outcry against Governor Rounds, who seems heck-bent on replacing the property tax with variants of income tax one industry at a time?

First Governor Rounds advocates the quasi-income tax for farmers, dreaming up a wildly convoluted productivity formula to get his hands on $14 billion of taxable value currently denied to the state. Now Governor Rounds wants an income tax for wind turbine owners. He calls it a tax incentive, but the plan, embodied in HB 1320, is the same switcheroo as in HB 1005: instead of paying property tax based on the value of the land and improvements upon it, wind turbine operators would pay a tax based on the generative capacity of the wind turbines and on their gross receipts.

Governor Rounds says the current property tax discourages landowners from building wind turbines. A big wind tower that costs $2 million makes the property tax on a parcel of land go up $8500. Governor Rounds's proposal would tax the owner $3 per kilowatt of energy-producing capacity, which on a 1500-kW tower would bring in $4500. The governor would also impose a gross receipts tax of 2% and offer rebates of up to 90% for reinvestment in transmission lines and other facilities [see Chet Brokaw, AP, "Governor Proposes New Tax Incentives for Wind Energy Towers," that Sioux Falls paper and elsewhere, 2008.02.01].

That's not a property tax. That's not a tax incentive. That's an income tax, or something darn close to it. It's a tax based on the principle that your taxes shouldn't be based on what you own, but on how much money you make.

And I'm o.k. with that. I'll bet Gerry Lange is as thrilled as I am to see Governor Rounds recognizing that income is a better, fairer basis for taxation than property.

ASBSD: Rounds Admits One-Time Money Affects Reserves

My Sitemeter stats show some referrals from Open Forum, the official blog of the Associated School Boards of South Dakota. I backtrack and find a very interesting post about Governor Rounds's response to a January letter to the editor from Doland superintendent Jerry McPartland to the Doland Times Record. (Governor Rounds doesn't want to testify in court about education funding, but at least he's putting his disagreements in writing for the local press.) ASBSD says the Governor admits that one-time money results in temporarily increased reserve fund balances, as the agencies receiving that money take time to figure out how best to use it:

Superintendent McPartland referenced portions of our statement throughout his letter to the editor, including the following statement:

According to research provided by the Associated School Boards of South Dakota, since 1998, school district fund balances statewide have decreased by more than $25 million. Over the same period, state reserves have increased from $43 million to $133 million.

To that, Gov. Rounds responded:

What ASBSD failed to tell Mr. McPartland is the state received a one-time payment in 2004 in the amount of $66.3 million as part of the President's fiscal relief program. That money was placed into the property tax reduction fund. ASBSD also failed to tell Mr. McPartland my proposed budget calls for an ending balance of $99.7 million in the property tax reduction fund and the budget reserve combined.

Well... that's a positive step forward. We appreciate Gov. Rounds now says that one-time money has an impact on reserves, and that it might take up to five years to plan on how best to spend one-time funds [ASBSD, "Gov. Rounds: One-Time money Impacts Reserves," Open Forum, 2008.02.26]

The state gets to save its money and plan ahead, but Governor Rounds expects schools to burn through their pittances from Pierre immediately. Makes sense, from a Machiavellian point of view: the less cushion the schools have, the more beholden they'll be to the powers above.

A couple side notes: this Open Forum post goes on to argue that Governor Rounds is dedicated to defending the status quo, as evidenced by his arguments with Rutland Superintendent Carl Fahrenwald and Senator Sandy Jerstad (D-12/Sioux Falls). Note that Supt. Fahrenwald weighs in with a response in the comments section. The Governor asks for examples of disrespect from Pierre; Supt. Fahrenwald points to the TCAP money:

The strings attached to this money (rather more like towropes) are not at all appreciated as these TCAP rules and procedures serve as ready evidence of the utter lack of respect for the teaching profession (at least at the K-12 level)....

With TCAP dollars for teachers it is assumed from the onset that not all deserve nor should get these additional dollars. With state employees, all who qualify for the mid-point adjustment (however the system defines it) simply get this additional money by definition. [Dr. Carl Fahrenwald, comment on "Governor Questions Superintendent's Intelligence, Honesty, and Commitment to Students," 2008.02.26].

Dr. Fahrenwald writes more, and it's worth reading. Governor Rounds, your reply is welcome....

Open Forum also notes and congratulates yours truly on my decision to run for the Madison Central School Board. Thank you, Open Forum... although I wonder if I ought to be nervous about the establishment noticing my humble political aspirations. Stay tuned.... ;-)

Governor Rounds Disingenuous on Indian Health Care

Insurance salesman and South Dakota Governor Mike Rounds offers disingenuous arguments about Indian Health Services to make the case against health care reform:

The rate of diabetes, obesity and tobacco use is high on Indian reservations across America. And due to a lack of federal funding, patients can't always get the treatments they need.

"Indian Health is an example of a government run system in the United States today," Rounds said.

Congress has a treaty obligation to provide quality health care on reservations, but Governor Mike Rounds says historically, it doesn't happen.

"Apparently they disagree, because if you take a look at the funding for Indian health, it's about half of what it is for other government paid for programs, which is Medicaid and Medicare," Rounds said.

Rounds says reform is needed but is afraid if Congress passes a government run health care system, all South Dakotans would suffer.

"I don't think you take a system in South Dakota that provides good high quality care for 91 percent of our population and throw it out and say, 'Guess what? We've decided on a lark that we're going to start over with a brand new system that has no evidence of success,' at least if you're comparing it to Indian health," Rounds said [Don Jorgenson, "Indian Health Care: Rounds' Concerns," KELOLand.com, 2009.08.21].

What Rounds gets wrong:

1. H.R. 3200 and the big debate we're having this summer is about reforming health insurance, not having the government own and operate hospitals, hire doctors, buy medicine, etc., as it does with the Indian Health Service.
2. Rounds contradicts his own argument: he says the fact that Uncle Sam doesn't give IHS enough funding shows Uncle Sam can't do health care, but then he acknowledges that government manages to fund other health care programs at double the IHS levels. Which is it, Governor Rounds: can government find the funding for health care or not?
3. If IHS lacks funding, it's because its "customers," American Indians, comprise less than 2% of the population and have little political clout. The customers of Medicare comprise 13% of the population—that proportion could double as baby boomers retire—and they have disproportionate political clout (old folks vote!)
4. "No evidence of success"?! Right: dozens of other indutrialized countries using some form of public health insurance and achieving cost savings and longer life spans are just left-wing propaganda. The public option in the city of San Francisco that has insured more people without knocking private insurers out of the market is a figment of our imagination (although the NYTimes op-ed touting San Francisco's success was written by William Dow, a former member of President George W. Bush's Council of Economic Advisors).

Governor Rounds is right that Indian Health Services struggles to provide care. We have a moral obligation to increase funding for IHS and live up to our promises. But we also have a moral obligation to recognize the difference between government-run health care (that's IHS) and reforming health insurance. That's what President Obama wants to do... and that's what insurance agents like our governor want to avoid at all costs... even the cost of twisting the truth.

Governor Rounds on Big Stone II and Transmission for Wind: What, No Sales Pitch?

I sometimes criticize local and state politicians for putting a happy face on setbacks or ignoring real problems. Of course, mayors and governors have their agendae, their own need to keep the positive spin coming, to put the best face forward to keep investors interested and promote economic development.

So why, if he is really committed to promoting alternative energy, would Governor Mike Rounds (through spokesman Joe Kafka) so vocally bemoan the demise of Big Stone II?

"The governor feels it's a setback to development of the wind-energy sector in the state, because enhanced transmission capacity was tied to the project," Kafka wrote. "Without the ability to move larger amounts of wind energy to markets in large cities to the east, plans for future wind-energy projects may be sidetracked" [Ross Dolan, "End of Big Stone II Could Be Trouble for South Dakota Wind," Mitchell Daily Republic via Rapid City Journal, 2009.11.18].

Now I know the governor has obligations to his lieutenant and the Dakota Dunes donor base. I know it's oh so satisfying for the conservative commentariat to say President Obama and climate change legislation and we liberal bloggers killed Big Stone II and wind power all in one shot. We have to keep reminding the other side of the aisle that BSII backers themselves were saying all along that climate change legislation was actually making the plant a better deal.

But my question this evening is why would the governor insist on shedding his usual boosterism and being such a wet blanket about wind power? He dispatches his spokesman to tell alternative energy investors, essentially, gee, it's going to be awfully hard to justify building wind farms here in South Dakota. Golly, you investors, I don't know why you'd even think of spending your money here after a big setback like this. Does that sound like a sales pitch to you?

Governor Rounds sounds a lot more like the crabbing conservative bloggers who are big on blame but short on innovative thinking and solutions. They keep forgetting that Otter Tail bailed out of Big Stone II even while adding 180 megawatts of wind power over the last three years. The Western Area Power Administration is working on another 200 megawatts of wind power.

Instead of moping and fueling bogus anti-Obama, anti-environmentalist rhetoric, maybe the state's cheerleader-in-chief could show some leadership and salesmanship. He could make it his mission to sell utilities on the business case for building transmission lines to cash in on the Saudi Arabia of wind.

Or he could one-up his Republican counterpart in California, Governor Schwarzenegger, and sign an executive order requiring South Dakota utilities to get 33% of their energy from renewable sources by 2020. Maybe the governor could exhort the Legislature to pass real renewable quotas, not the fluff-ball paperwork charade that Senator Russell Olson likes to tout as progress. Utilities like Pacific Gas and Electric have responded to that mandate with all sorts of great energy initiatives (including poo-power!).

Of course, this argument assumes Governor Rounds really wants wind energy to thrive. It assumes Governor Rounds really wants to see alternatives rise to compete with the fossil fuel industry. If that's what I were selling, that's what I'd be saying.

But Governor Rounds isn't saying that, is he? Hmmm... I'm feeling contrapositive....

Live-Blogging Governor Rounds FY2010 Budget Address

Live notes (in case you don't have SDPB handy) on the governor's budget address! Hit Refresh for updates!

[Update 2009.12.13: Go straight to the horse's mouth: see the budget proposal in its full glory on the state website!)

Governor Mike Rounds calls it a "basic-needs budget" with an "emphasis on taking care of people."

FY2009 required stimulus to balance, allowing us to avoid touching one penny of our reserves so far. $105 million in stimulus used.

FY2010, right now, expenses total $1.2335 billion, 0.1% growth over FY 2009 expense levels. $1.1163B + $104M stimulus... still a shortfall of $15.8 million for the rest of FY2010: Rounds proposes using one-time cash instead of reserves, allowing us to finish FY2010 without touching reserves.

Revenues have declined by 3.2%, or $37.1 million, compared to 2009, while expenses have remained level.

FY2011: Rounds proposes expenses $1.2529B, a 1.6% increase over FY2010. Balanced with $70.5 million in stimulus, $31.8 million shortfall. Revenues expected to increase $3.1 million over FY 2010.

Looking ahead to FY2012, for the folks who get elected, the Rounds proposal leaves the state facing a FY2012 shortfall of $107 million. That assumes zero federal stimulus and zero increases in expenditures, zero inflationary increases. Rounds says "that has to drive what we do this year."

Rounds is assuming economic recovery taking hold and bringing increases in sales and use tax, excise tax, insurance tax, and trust fund returns. He does see lower video lottery returns meaning less money for the property tax reduction fund.

The big expense increase for FY2011 is in medical assistance. Rounds is actually proposing modest cuts in state government.

In FY2010, the state has reduced budgeted expenditures by $1.9 million to offset a little of this year's shortfall, but the $17.6M reduction in revenues means we need one-time cash transfers from the Large Project Refund Account, the Tax Relief fund, the Aeronautics fund, the budgetary accounting fund, and a Custer State Park obligation to pay back some interest (that is about $60K more). The Property Tax Reduction Funds and Budget Reserve Balance funds—the "rainy day" funds—remain untouched. Rounds emphasizes that we are riding out the recession and leaving our reserves intact.

FY2010: the top five revenue sources have all dropped more than forecast back in March, including $11.7 million less from sales taxes. We have seen $5.8 million more than forecast from interest earnings, plus $2.1 million more from the Department of Corrections for a cancelled check on a land purchase in Rapid City that we didn't make.

Rounds projects general fund revenues will increase in FY2011, including $20.7 million more in sales tax. The trust fund transfers are projected to add another $17.7 million. Interest earnings and video lottery receipts are still projected to go down. Rounds proposes that we can recoup another $3.5 million by changing the Large Project Refund program. He also proposes repealing a refund on cigarette stamps. Both actions require legislative approval.

Unemployment has essentially doubled since the national recession began in December 2007, from 11,000 to 22,000. 5% unemployment is the highest SD rate since 1985. Over the same time period, the number of folks eligible for Medicaid, folks who have applied and been accepted, has grown from 102K to 110K (including 500-some folks added just last month). This growth over the last ten months outpaces the growth of the previous four years. 68% of the folks on Medicaid are kids, 11% are disabled adults, folks who "have no place else to go for their health care needs."

Rounds notes these two figures put us in a double bind: fewer people working, less money available to spend, less revenue to support state programs just when we see increased state expenses. This is not an easy problem to solve.

[13:28 CST] Rounds emphasizes that the deficit is not caused "by our spending being out of control." He emphasizes that expenditures from FY2009 to FY2011 are going up less than 1% a year. It's the recession, the decreases in revenues, and the increases in folks needing assistance that are responsible for the structural deficit. Since 2008, revenue has gone up just $2.2M, while expenses for taking care of people have gone up $64M. Add education, and costs have increased $103.1 million. (I didn't catch whether he made eye contact with Dave Knudson or Scott Heidepriem on those lines.)

[13:31] Rounds now turns to spending increases throughout his administration: "taking care of people" has increased by 193M; education by $131 for education; $43M for "protecting people"; the other increases (bureaucracy, gov's office, etc.) up just $10 million over the eight-year period.

Rounds notes that $56.3 million of the increases in the FY2011 budget are mandatory: more people receiving government medical services alone is $24.5 million of the increases. There's another $20.2 million of expiring stimulus funding for the last couple quarters of the fiscal year that we need to pick up. Increases in South Dakota income that have outpaced national rates mean South Dakota has to pay another $7.5 million for its "FMAP state share," funding that supports Medicare (if I heard that right). We also must appropriate $2 million more to support Opportunity Scholarship funds for 3294 eligible students (and Rounds says paying that money is a good thing).

Governor Rounds is asking for a $1 million budget increase to establish South Dakota's first Ph.D in physics, a shared program among SDSU, USD, and Mines. With the Homestake lab getting going, Rounds says we can't be sending our physics grad students elsewhere when we have a great opportunity like this coming our way. Rounds sees this Ph.D. program as "a long term investment in our future" that will have a lasting effect on our economy.

Among big cuts, Rounds proposed freezing State Aid levies to save $4.1 million, instead of offering property tax payers another cut in their rates. Overall, we're cutting under $5 million.

No increase for state aid to education, no raises for state employees (second year in a row—time for me to go into building wind turbines!), no increases for health care providers receiving state payments.

[13:45] Summary of major spending changes:

• Education: down $3.4 million
• "TCoP": up $58.4 million
• Protecting people: up $542K (and Rounds praises the chief justice for volunteering to go back and cut his budget request further)
  
• Rest of gov't: down $573K

More details on education funding:

• tech schools are getting $2.7M more, due to increased enrollment
• consolidation and sparsity are causing a $2.6 increase
• health insurance goes up 6.3%, $729K
• state aid to K-12 goes down $3.8 M
• state aid to special ed goes down $4.1M (now compare this to the $1 million increase to create the physics Ph.D. I like the Ph.D. Rounds is right that it's an investment... but can we justifiably reduce our investment in earlier ed at the same time? Rounds will emphasize that "reduce" is relative: the negative sign on the budget line comes from not increasing the state aid)

We are saving $520K thanks to declining natural gas rates and thus lower utility bills for heating our state facilities. Utility reductions across the board are reeducing FY2010 expenditures by $1.6M.

[13:55] Rounds notes that the bureaucracy consumes only 4 cents of every tax dollar, down from 5 cents on the dollar last year. Rounds is recommending a reduction of 102 full-time equivalents, the second consecutive year of recommended FTE reductions. Rounds notes that most of the cuts over the past year have been done through attrition. So the boss isn't coming with the ax, but he's also not taking apps for new workers.

[13:58] Birth to 3 is safe for now: Rounds says we're keeping it alive with stimulus funds. There's something else he's leaving for his successor to figure out in 2012.

[14:01] Gov. Rounds turns to the Sanford Lab. He mentions the $35 million the Legislature allocated for the Sanford Lab back in 2004 and 2005. The National Science Foundation has pumped $21M into the Sanford lab over the last three years; another $250M is anticipated. More workers and more experiments are coming. Rounds says we are going to be out of money for the lab next December; NSF funding won't kick in until May 2011; Rounds is asking the Legislature to set aside $5 million in one-time funds to bridge that gap and sustain the work of pumping out the water and keeping the lab open. He notes that the Legislature had the foresight to invest in the most lucrative "hole in the ground" in the state a few years ago and urges them to keep the project going with this one-time investment.

[14:07] The big numbers:

• General Fund: $1.182B
• Federal Funds: $1.9B
• [whoops! missed a line!]
  
• Total Budget: $4B

(Hey! There's Russ Olson, sitting in the back!)

Rounds says that 49% of the budget goes to education, 36% for TCoP, 11% for protecting the public, and 4% for all the rest, including the bureaucracy. If you want more cuts, those are the parameters within which you must operate.

Rounds wraps up: no increased tax rates, he says. Then Rounds starts handing out the candy, ending with appeal to patriotism, noting the men and women of the armed services who are fighting for our freedom, calling on vets to stand and take some applause, then Dilges and his budget office (hm... that applause didn't sound nearly as rousing)... and then off we go to keep making South Dakota even better.

Governor Rounds on Dakota Midday

SDPB got 50 minutes of Governor M. Michael Rounds's time this noon. Let's see how many times he says "even better"...

More than 2.5% for K-12 education: reserves an excuse not to act? Rounds says state added $43M in four years in ongoing funding, while schools put $46M in reserves. Schools have the money they need; why put more money in reserves when we need to pay for nursing homes and CHIP, Medicaid for pregnant women, etc.? 40 schools have reserves of more than 40% operational budget.

Better to remove strings from increased school aid? Judgment call: dollars are limited, we can use them to actually help kids or just inflate reserves. We can put 1400 pregnant women on Medicaid for $4M instead (ah, so Rounds is fighting for women now?). What about the taxpayer? Those darn" tax spenders" aren't being responsible.

What about the school funding lawsuit? Using tax dollars to sue for tax dollars is the wrong approach; it should be handled by the legislature, not the judiciary (and I can sympathize with the governor there).

E-mail question from Sioux Falls: support eliminating sales tax on food? Why not shift taxes to more progressive property tax or non-essential luxury items? Some of the best taxes you have are the ones with lowest rates and which hit the broadest base. Impacting buying decisions is bad. The food tax is very stable, and it's the main source of revenue we have right now, supporting 35% property tax relief.

Phone question from Vermillion caller on Hyperion: how can SD enforce environmental measures when the EPA is in charge? Hyperion can satisfy lower EPA requirements by building in a "clean-air" area like SD than it would have to if it built in the "dirty-air" area of Houston. Will Rounds commit to making sure Hyperion has to commit to the best air-quality tech in the world and not the minimum EPA regs? Governor Rounds says all his conversations with Hyperion have been about the best tech. Rounds says he's not familiar with all the different EPA regs for different states (?!?!); he's just focusing on telling Hyperion that SD is the best place for the refinery. Rounds says we want Hyperion to meet or exceed the best standards.

So you're committed to holding them to the promise to use the best tech available? Our expectation is that the refinery will "be as clean as it possibly can be," and if it isn't, then they'll have to explain that to us, and we'll have to make a decision. (In other words, Rounds is not committing to holding Hyperion to its word.)

Kent from Britton: TransCanada, foreign company, eminent domain (here's the question we were waiting for!). Easements not adequate, TransCanada not assuming the proper liability. "You have pretty much been a cheerleader for this industry." Why aren't you a cheerleader for the landowners of your own state? Federal law takes precedent on eminent domain for pipelines and on safety regs. (Rounds is dodging completely.) Rounds says he can't challenge what the feds say is sufficient fulfillment of regs.

Kent breaks in and says the governor is here to protect us from special interests and to ensure that we get proper compensation. "The issue of how much should be paid for an easement is one that is determined within court if we can't agree up front." (Again, dodging.) I do support the concept of bringing Canadian oil into the US instead of Saudi Arabian or Venezuelan oil. Pieplines are regulated by the federal government, not the states. Eminent domain -- the courts decide. A governor can't step in and say the court is wrong.

Kent: so why not have your folks help draw up good easements? We're not saying we don't want the pipeline; we're saying we want sufficient protection. I was not aware that you needed that help drawing up the easements. There's always going to be an emotional issue. (To summarize: Rounds says he can't do anything, and he wasn't aware of the need to do anything.)

Barbara from Vermillion: You promised to cut the red tape for Hyperion; what about clean land and air? "We roll out the red carpet, not the red tape, but we don't cut corners. I'm very serious about not cutting corners.... We want this to be done as professional and as correct as any refinery could be done in the world." Now remember, says Rounds, cars pollute, tractors pollute, everything pollutes. Building new refineries may push higher standards for the whole industry.

Barbara breaks in: so will out gas be cheaper? Not so much cheaper; Hyperion will try to get as much for their product as possible, but it will be less expensive for them to pump it into our area, giving us a supply we don't have now (so what exactly does Rounds mean? Seems the short answer is that there's no guarantee of cheaper gas).

Joe from Mitchell: Hyperion like the Loomis ethanol plant: semis busted up highway, increased county costs; what do we get from the refinery? Hyperion won't burn coal, will use IGCC power plant, which can capture CO2. By the way, (says Rounds) I'll take all the ethanol production I can get and all the concomitant difficulties of supproting infrastructure for it. Growing pains come with any industry. If we can't put up with these growing pains, we're not going to last long.

stay tuned for part 2!

Rounds Vetoes Deaf Education Bill on Grammar...

...and on points of federal law.

KELO reports "outrage" at Governor Rounds's veto of HB 1242, a bill that would have amended South Dakota's existing "bill of rights" for deaf children and purportedly expand services for such students. The wording of the amendment doesn't seem to do much: where SDCL 13-33B-1 currently lays responsiblity for such programs at the feet of the Department of Education, HB 1242 makes the Board of Regents responsible as well. In its only other explicit policy change, HB 1242 appears to authorize individual education program teams to require certain actions for deaf students.

HB 1242 was intended to remedy problems like those testified to by 17-year-old Taner Kiewel, who in February told the House education committee that South Dakota's education system had failed him by not providing interpreters who know American Sign Language [Bill Harlan, "Douglas Middle School to House Education," Mount Blogmore, 2008.02.05].

So how did HB 1242 make Governor Rounds's "Big Seven" veto list released Friday? Rounds says HB 1242 would violate federal law (which gets involved because of strings attached to the federal money we accept for K-12 education). According to the governor, the bill doesn't provide funding, it involves the Board of Regents in an issue that is the strict purview of the Department of Education, and it improperly delegates authority to IEP teams.

Interestingly, the Governor also includes a grammar critique in his veto statement. The bill makes a point of revising every instance of the phrase "deaf and hard-of-hearing children" to "children who are deaf and hard-of-hearing."* That change appears to come out of nowhere. If it's some new p.c. wording (like saying "people living with AIDS" rather than "AIDS sufferers"), it's pretty subtle, and not even the National Association of the Deaf has picked up on it.

But the change is harmless, right? Wrong! Governor Rounds whips out his English teacher hat and makes the following observation:

The bill also repeatedly uses the phrase “children who are deaf and hard-of-hearing” which is inconsistent with the avowed intent of the proponents. This language limits the benefits of the Act to children who are both deaf and hard of hearing, even though these phrases designate separate categories of disability. A more accurate expression of the proponents’ intent would require the substitution of the phrase “children who are deaf or hard-of-hearing” throughout the bill [Governor M. Michael Rounds, veto message to Thomas J. Deadrick, Speaker of the House, South Dakota State Legislature, 2008.03.13].

I have to admit, the Governor has a point. If you're going to amend a bill, you've got to do it right. A single word, an and instead of an or, can render an entire bill useless... or at least veto-worthy, in the eyes of the Governor.

But tomorrow is Veto Day, the last day of the 2008 Legislative Session. Our legislators will have the chance to decide whether the Governor's concerns on HB 1242 really warrant the veto. HB 1242 passed 28-7 in the Senate, but its 43-25 vote in the House won't be enough to overturn the Governor's veto. There may be parental outrage, but if the Governor is right, well, grammar is grammar, and federal law is federal law.

*The Governor might also have pointed out that moving the noun from the end of the phrase to the beginning changes "hard-of-hearing" from a noun-pre-positional adjective to a predicate adjective, requiring the hyphens to disappear: "children who are hard of hearing."

Impeach Rounds?

Even the local Republican party cheering section -- also known as the Madison Daily Leader -- recognizes Governor Mike Rounds has gone too far in assuming the power of the Legislature to fund an expansion of his classroom laptops program. Writes publisher Jon Hunter in Tuesday's MDL:

Gov. Mike Rounds extended his laptop program for another year, after the legislature rejected the idea in February, using state money the legislature didn't know existed.

Rounds should not have funded the program this way....

During the most recent legislative session, Rounds asked for another year's worth of funding but lawmakers declined. Disappointed, Rounds said he would like to find "private" sources to fund the program for another year. Most observers believed that meant a corporate sponsor.

Instead, the Rounds administration announced last week that it would use $770,000 left over from a settlement with Citibank. The settlement fund began in 1999 with $4.2 million, and had worked down to $1.2 million by January, when administration officials testified before the Joint Appropriations Committee. But Department of Education officials said all the money was already committed to continue previous obligations.

So two questions arise:

1) Did the money always exist and information was withheld from the legislature?

2) Did the administration bypass the will of the legislature by funding a program lawmakers defeated? [Jon Hunter, "Rounds Shouldn't Have Extended His Laptop Program This Way," Madison Daily Leader, 2008.05.27, p. 3]

Mr. Hunter has advertisements to sell to local Republican donors, so his editorial dissolves into a gentle call for the Governor and the Legislature to "get together and work things out." Hunter suggests this flap, along with the tussle over Governor Rounds's attempt to increase the ethanol tax by executive fiat, is just a failure of communication.

Failure of communication? Try breach of the state constitution. Try grounds for impeachment. We don't need the Dems to take over the House this fall to make this happen; Governor Rounds has angered enough Republicans with his imperial reign that a majority vote for impeachment might not be hard to obtain. If Rounds insists on further expropriation of legislative power, it might not be hard to find two-thirds of our Senators willing to make a stand for constitutional government.

Heck, even Lt. Gov. Daugaard might see some benefit for his 2010 gubernatorial aspirations. Daugaard may want to distance himself from Rounds's falling star as much as possible. Upon impeachment by the House, a governor is immediately suspended from his office until and unless the Senate acquits him. Impeachment would give Daugaard a couple weeks or more of practical on-the-job experience!

Laptops -- Absolutely! Teacher Pay -- Well, I Suppose...

Now that Christmas vacation gives me a break from running debate tournaments and early-morning one-act play rehearsals, I have time to comment on Governor Rounds's new education plan. Our fair governor seems to think that the way to improve South Dakota education is to provide laptops to every high school student in the state. Governor Rounds says, "The reality is that if you want to provide a good education, a laptop is going to be part of it."
Of course, while the governor views laptops as essential to education, he's willing to direct the state to fund just $13 million of the projected $39 million required for the statewide laptop outfit.

Of course, the governor's commitment to technology in the classroom (and now in backpacks, backseats, and wherever else the kids will forget those computers) still appears to outweigh his commitment to funding another arguably essential component of education -- teachers. The Argus points out that Governor Rounds has also proposed $3.5 million for a school efficiencies program to boost teacher pay. It works like this: the state would match funds that schools can save by cutting other programs if those funds are then directed toward teacher pay. So if schools find other ways to tighten their budgets -- cutting arts programs, for instance, or eliminating extracurricular opportunities or textbook purchases -- the state will send some money to increase teacher salaries. Total local outlays would remain the same; statewide, education funding would increase by at most the $3.5 dollars, less than a tenth of what the entire laptop program would cost the state and the local districts.

Our governor appears to have made his classroom priorities clear. He believes laptops are ten times more valuable than making it easier for teachers to afford to remain in their chosen profession.

To understand the governor's mistaken priorities, let's run some back-of-the-envelope projections for Montrose High School, my place of employment. We need 77 student laptops. To keep up, the teachers will likely need laptops as well. Let's suppose we strike a reasonably good deal and get decent laptops for $500 a pop (the Aberdeen American News reports that the governor expects costs of "less than $1,000 apiece for computers with three-year leases, software and warranties"). 77 student laptops plus 15 staff laptops = 92 computers @$500 = $46,000. Let's be optimistic and assume that rounding up to an even $50,000 covers the costs of setting up the software, networking, and security for the new machines. $50,000 -- that's equal to the salary of two new teachers... or a raise of $2500 for every teacher. Now, consider that the governor's money is one-time money, so once Montrose gets its laptops, Montrose is on its own for maintenance and replacement costs. A laptop network that size will require at least one dedicated computer support person, who likely will demand a salary greater than that of any teacher in the building. Let's suppose the computer tech person gives us a break and works for $40,000 a year. Suppose we need to replace just 1 out of 20 machines each year -- that's 5 new laptops, another $2500. The school's costs each year for mere maintenance and replacement will be greater than their initial buy-in with the assistance of the state's matching funds. We've already invested hundreds of thousands of dollars in computers, and we wonder why school budgets are getting tighter every year.

On the merits of laptops in the classroom, see Steve Hemmingsen's December 12 comments. I am also pleased to direct you to comments from some South Dakota lawmakers who think laptops might not warrant such a prominent place in our list of education priorities. Senator Jerry Apa of Lead, a Republican like Governor Rounds, questions the governor's focus on technology:

"Since when did laptops become an entitlement?" Sen. Jerry Apa, R-Lead, chairman of the Senate Appropriations Committee, asked. "If the schools are in trouble now financially, how are they going to come up with their match? How are the smaller school districts going to afford a support person? What about children whose parents can afford the Internet and those who can't? What are we going to do - subsidize the Internet? It's an interesting offer, but the practicality of it is just not there," Apa said.

I don't know if we can count on the Legislature to increase teacher pay, but let's hope comments like Apa's indicate that the Legislature will at least keep us from sinking our money into another technological boondoggle that will benefit Gateway more than the students of this state.

Governor Rounds Wants New Taxes

Once again, Governor Rounds demonstrates his shameless duplicity. He'll stand before the voters and the cameras, waggle his finger at the Legislature, and say "We must live within our means!" He'll rule out any new idea that involves a new tax, like the drink tax the counties hoped would
ease some of their alcohol-related law enforcement costs.

But if he can doctor up a new tax and make it sound like he's just recovering money the state deserves anyway, then he's all for it. He tells us to buy more stuff so the state can collect more sales tax. He keeps dreaming of the fabled Internet sales tax to collect money he thinks the state is being cheated out of.

And now he says that HB 1005, Rep. Rhoden's quasi-income tax for farmers, isn't a new tax at all: it's just a way to collect the taxes the state deserves. Says Governor Rounds:

We think there's got to be a better way than the current flawed system. There's 14 billion dollars of ag land which is improperly assessed [Ben Dunsmoor, "$14 Billion in Farmland Not Assessed Properly," KELOLand.com, 2008.01.31].

So Governor Rounds wants farmers to pay taxes on an additional $14 billion dollars dreamed up by a new formula. He supports taxing ag land on an entirely different basis, productive value instead of sale value. But he won't admit that it's a new tax that contradicts the demands he places on legislators that they not create new taxes.

Don't get me wrong: I think Rhoden's income tax for farmers is a step in the right direction. (On the other hand, repealing the 150% rule is a step off a cliff that should be amended right out of HB 1005.) If Governor Rounds supports it, great. It's just a shame the Governor can't msuter the courage to call a spade a spade and say, "I want new taxes."

Different Standards for Governor and Teachers on Tech

I'm going to stretch for this post, but I can't resist the juxtaposition:

Expanding on an AP report that Governor Rounds hardly uses e-mail, DWC reports that Governor M. Michael Rounds, who has made significant and expensive efforts to continue the Janklow policy of increasing technology in education, is himself not much of a technophile:

Actually, I can believe what the article says. For those of you looking for some inside baseball… From my time on the 2002 campaign, and in the Gov’s office, I can tell you first hand that Mike isn’t necessarily “Mr. Techie.” when it comes to that sort of thing. A couple of his kids are really good, and the First Lady is quite proficient when it comes to the computer from her time working as a state employee.

But the Gov…. Well, let’s just say ‘not so much’ [Pat Powers, "No E-Mail for the Gov. Or at Least Not Much," Dakota War College, 2008.03.16].

Powers says the Governor's aversion to technology is no big shock, and nothing to be "construed as anything other than it is." He doesn't like computers, doesn't use them much... so what?

Perhaps budding education blogger Fred Deutsch has your what on techno-illiteracy. He reprints an award-winning post from Karl Fisch, the Director of Technology at Arapahoe HS in Centennial Colorado that declares teachers who don't like computers unfit for duty. Composing a draft list of tech standards for teachers, Fisch says the following:

1. All educators must achieve a basic level of technological capability.

2. People who do not meet the criterion of #1 should be embarrassed, not proud, to say so in public....

4. Headteachers and Principals who have staff who are technologically-illiterate should be held to account....

5. School inspectors who are technologically illiterate should be encouraged to find alternative employment... [Karl Fisch, "Is It Okay to Be a Technologically Illiterate Teacher?" The Fischbowl, 2007.09.11].

School inspectors... I wonder if Fisch and Deutsch would apply that standard to the top school "inspector," the Governor who proposes the budget, draws the hoops for teachers to jump through, tells the Secretary of Education what to say and do, and questions the veracity and professionalism of school superintendents who labor under his requirements.

I know, Pat, I'm construing all over the place. Teachers and governors aren't the same thing. But when the Governor fights to keep (and make political hay out of) laptops in the schools, when he advocates for $3 million more for ed tech as a higher priority than not cutting $2 million from law enforcement, he's staking out a position as a leader in education.

"Leader in education" -- that sounds a lot like the original Greek meaning of the fancy word for teacher, pedagogue, a "leader of children." And we all know how important it is to lead by example....

Governor Rounds, you wouldn't want to give kids the impression that they can do anything, even grow up to be Governor, without knowing how to use technology, would you? Check your e-mail. Use it. Heck, maybe even start blogging, like your pals Governor Richardson, Governor Granholm, Governor Schwarzenegger, Governor Minner....

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Update 12:58 CDT: Denise Ross reports the SD House's 61-8 vote to overturn Gov. Rounds's veto of HB 1233, the searchable online state checkbook bill. She notes the apparent inability of the Governor and his remaining defenders to understand the difference between PDF files and a searchable database. Hmm... all the more reason the Governor needs to get hip to the new tech he thinks all the schools should use.

Big Oil, Peak Oil: Rounds Not Looking Forward

"Rounds Looking Forward to the Hyperion Project," reads the headline in this mornings Yankton Press & Dakotan. The headline is oddly deceptive. Governor Rounds and all those eager to tear up Union County farmland and install a sprawling refinery suffer from a stunning inability to look forward... really forward.

How far forward is our governor looking to embrace an industry whose sunset is in sight? Oil production will peak -- it may already have peaked. Oil is finite. So is the lifetime of the oil industry. If built, the Hyperion refinery and the TransCanada pipeline will go idle in our lifetimes. Are we so determined to fill our present lives with all the oil we can burn that we will mortgage our children's lives to pay for technology and industry destined to become obsolete by the time our children need it? Are we so short-sighted that we will remain dependent on the products of Big Oil until the pipes run dry and then leave our kids to figure out their own solutions?

The rhetoric from Governor Rounds, Hyperion, TransCanada, and the rest Big Oil's boosters is utterly devoid of any acknolwedgement of the finite nature of the oil industry. Many of us will be around to see the refineries and pipelines stop adding value to our economy. We will see the mess we are left with: land permanently removed from agriculture through construction and contamination, prohibitively expensive to dismantle and clean up.

Want to look forward, Governor Rounds? Look forward to a day when, wishingly by foresightful choice but more likely by overconsumptive crisis, South Dakota has no oil to burn. What can we do now to prepare for that inevitability? What can we do to lay the foundations, not for Big Oil donations for our Congressional campaigns, but for our great-granchildren's energy security? What can we do to make our great-grandchildren say "Thank you" rather than "What the hell were you thinking?"

Build an oil refinery? Build an oil pipeline? Those aren't the right answers, not for our great-grandchildren.

Why would a truly forward-looking people put so much emphasis on Big Oil, a 200-year anomaly in the economic history of mankind? Why would we not prioritize uses of our land -- sustainable agriculture, wind power, solar power -- that have the potential to serve our great-grandchildren at least as well as they serve us?

Look forward, Governor Rounds. Look forward, South Dakota. Look forward not to increased tax revenues and "hopefully stabilized" oil prices in 2011; look forward to a healthy prairie where our great-grandchildren can still afford to live and work and eat in 2101.

Rounds Loses Abdallah's Vote... and Who Else's?

Senator Gene Abdallah is on SDPB Dakota Midday, and he is making a pretty stern last-ditch argument for restoring the $2 million Governor Rounds has cut from the Highway Patrol budget. Party loyalty be darned, he's letting Governor Rounds have it with every argument he can pull out. Among Abdallah's points:

1. Abdallah says Governor Rounds came to the legislature five years ago and asked for three years of subsidy for the State Fair. Says Abdallah, the governor said that if the State Fair didn't turn things around in three years, they could pull the plug. We're in year 5 of the subsidy, which Abdallah says he didn't vote for.
2. Abdallah questions why the Governor can tell the Legislature to watch the bottom line, but then let's a huge deficit in the gas tax collections sneak up on him.
3. Abdallah criticizes the state's purchases of expensive airplanes.

Governor Rounds has apparently lost a lot of support from the law enforcement community. He's exerting a lot of energy criticizing school superintendents in their hometown papers -- just icing on the bitter cake for educators who already have enough reason to oppose the Governor. Just curious -- what happened to that really nice smiley guy who beat mean old Barnett and Kirby? And is this the kind of political momentum a potential GOP challenger to Tim Johnson wants to have?