2018 SD Legislative Sessions – Tom Pischke Week 1 Update

Pischke_2017On Tuesday, Governor Dennis Daugaard gave his final state of the state address as Governor of the great State of South Dakota. State government faces several challenges as we prepare to budget for the coming year, but there are many bright spots on the horizon.

– Sales tax revenues continue to lag behind projections and revenues are tight. We will need to continue to watch revenues over the next two months to ensure we adopt a structurally balanced budget in March. Part of that is due to weak sales tax collections from a strained farm economy, and part is due to on-line and out-of-state retailers.

– The state has taken several steps over the years to try to collect more online retailers to encourage them to remit taxes. The state has reached an agreement with Amazon to collect and remit state and local sales taxes in South Dakota. Amazon began to voluntarily to collect sales tax on February 1st and began remitting in late March.

– Over the past six years, the legislature has passed a repeal over 4,000 sections of obsolete or unnecessary laws and rules, accounting for nearly 470,000 words. We will be proposing more of these bills this year.

– Two years ago, we started to create new conflict of interest standards for state employees. After one year’s experience, there will be legislation this year to clarify and streamline that law so that boards, commissions and school boards can achieve our objective of bringing transparency to these situations.

– South Dakota has now obtained AAA ratings – the highest possible – from all three major credit agencies. The AAA rating saves money when our tech schools, universities, and hospitals issue bonds – we get a lower interest rate because of our bond rating. We have balanced our budget for 128 years and recently placed an explicit requirement for a balanced budget in the constitution.

– Regular maintenance of state-owned facilities prevents larger problems in the future. But we also need to constantly reevaluate our need for the facilities that he have. The Governor is proposing to sell and repurpose unneeded and obsolete State-owned buildings across the state. We owe it to taxpayers to keep the state’s footprint to a minimum, to avoid spending tax dollars on maintenance of unneeded facilities and to return these properties to the tax rolls when possible.

– The total prison population today is lower that it would have been without reforms, but it is higher than we predicted it would be when we passed the Public Safety Improvement Act. We believe it’s due to the increase in methamphetamine trafficking. The Governor is proposing a joint drug interdiction task force, comprised of four new Highway Patrol officers, joined by designated agents of the Division of Criminal Investigation. There is a very close correlation between the increase in drug trafficking and the increase in meth arrests and convictions in South Dakota. We need to stop meth from coming into South Dakota.

– The Governor stressed that we need to find a way to stop out-of-state organizations from experimenting with South Dakota’s constitution and laws. These groups have no ties to our state and often don’t even disclose the source of their funds. They are using our state’s low signature requirement and cheap media markets to attempt to pass 15 constitutional amendments and initiated measures that advance their national agenda but don’t address problems seen in South Dakota. This session, we need to work together to find a way to protect our state from interference by out-of-state groups, while preserving our citizens’ access to direct democracy, so issues that do concern our grassroots can be raised, but not by people who don’t even live here.

If you have concerns about upcoming legislation or ideas to make our state better, please contact me at Tom.Pischke@sdlegislature.gov.

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2018 SD Legislative Sessions – Dan Ahlers Week 1 Update

dan_ahlersDear Constituents,

Thank you for choosing me to represent you in Pierre. Each week during session, I will give updates on issues in Pierre. This week I will cover the impact of Federal Tax Reform, Medicaid, and the state budget.

The passage of the federal tax reform will impact several aspects of state government. Fortunately, the version that passed preserves the tax credit for bonding. Had this provision been removed, the cost for publicly bonded facilities, like schools, would have increased significantly. There is a 15% reduction in the Federal Low Income Housing Tax Program. This program provides tax credits for low income and affordable housing. These tax credits are tied to the corporate tax rate. The corporate tax rate was cut from 35% to 21%. This cut certainly benefits South Dakota corporations, but will compound the affordable housing shortage and the recruitment of much need workers in South Dakota.

The State will be proposing changes to the Medicaid program. The Governor is working with IHS (Indian Health Services) to get full federal reimbursement for tribal members even if the services are provided by a non-IHS facility. Currently, state Medicaid pays more than 96 million dollars for native health care services. The state has also filed an 1115 Medicaid waiver. A section 1115 waiver provides states an opportunity to test existing or pilot new ways to deliver and pay for health care. The State is proposing a two year pilot program in Minnehaha and Pennington counties that would impact approximately 1,300 Medicaid recipients. Participants would be automatically enrolled in an intensive employment and training services within the Department of Labor.

In Appropriations, we began state agency budget hearings. Thus far, we have reviewed the budget and funding requests for thirteen agencies. These budgets include the Governor’s Office, Legislature, Secretary of State and the Governor’s Office of Economic Development. The Governor has recommended no inflationary increase to education, most Medicaid providers and state employees. We continue to struggle recruiting teachers, health care professionals in Medicaid supported facilities (like nursing homes) and in state government. Many of our surrounding states pay more and offer better benefits. We have a workforce shortage in South Dakota. Comparable pay is a real workforce development challenge. I am concerned that if we do not find money to provide some increase to these areas, it will further compound our existing problems. One of the more interesting items from our budget hearings came from the Public Utilities Commission (PUC). Due to the corporate tax cuts at the federal level, the PUC is requiring the utility providers to return these savings to rate payers. This may take two years to fully realize results, but South Dakota taxpayers should see some kind of rate reduction or rebate from their utility providers.

It will be important to hear from you during session. I would appreciate your input on any issue or concerns. You may email me at dan.ahlers@sdlegislature.gov.

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