P - Present
E - Excused
A - Absent
Roll Call
P Apa, Chair
P Bartling
P Dennert
P Earley, Vice-Chair
P Gant
P Glenski
P Greenfield
P Hanson (Gary)
P Haverly
P Hunhoff
P Klaudt, Vice-Chair
P Napoli
P Peters
P Rausch
P Smidt
P Sutton (Duane)
P Tidemann
P Putnam, Chair
OTHERS PRESENT: See Original Minutes
The meeting was called to order by Representative J.E. "Jim" Putnam
National Trends and statewide opportunities, presented by Rich Gross - Western Dakota Technical
University
The technical institutes in SD are two year degree, diploma, and certificate granting institutions with
a mission of preparing students for direct entry in to the work force. Today there are nationally 1,071
two year institutions. Two year institutions educate more than one half of the nation's
undergraduates. According to the U.S. Bureau of Labor, 10 of the fastest growing occupations
between now and 2012 require a one or two year degree rather than a four year degree. Document
1 distributed relating to quick placement into the workforce. 44% of all graduates nationwide are in
two year institutions. 63% of all two year students are part-time, it is the institution of choice for
working adults.
Nationally, funding for two year college shows these characteristics:
1 *
42% State funds;
2 *
23% Tuition and fees;
3 *
18% Local funds;
4 *
5% Federal funds; and
5 *
10% Other.
The following revenue sources for SD Technical Institutions:
6 *
50% State funds;
7 *
40% Tuition and fees;
8 *
0% Local funds; and
9 *
10% Federal and other.
More than half of two year students are 1st generation students. Nearly 1/3 of all students at technical
institutions have a bachelors' degree or higher nationwide, not true in SD. The average age of
students is 29 this trend is beginning to happen in SD. The majority of students learn hands on skills.
SD Technical Institutes:
10 *
Serve nearly 5000 credit students per year;
11 *
Collectively offer 57 diploma and degree programs;
12 *
Graduate nearly 4,000 students/year;
13 *
Place 92% of students in jobs with 82% of graduates staying in SD;
14 *
Provide dual enrollment options for high school students;
15 *
Work as full partners in regional and statewide economic development; and
16 *
Use educational strategies employing the latest innovative technology in practice.
State of SD investment over 10-year period in technical institutions is $200,000,000. There is a
return of $5 for every $1 invested.
FTE enrollment/funding increase:
17 *
FY97, 3,798;
18 *
FY04, 4,600 a 15% increase; and
19 *
In FY97 the state funding formula equated to around $3,300/student and in FY04 it was
$3,455/student, which equates to a 4% increase.
What the national trends tell us: There are increasingly more second and third career students,
because life-long learning is a reality. The average age will increase. Training and retraining cycles
become shorter because technology evolves so rapidly. Technical institutes are becoming
increasingly important with business and industry.
What SD technical institutes stakeholders tell are their concerns:
20 *
A perceived need to open educational pathways for students (I.E. articulation with other
institutes);
21 *
Governance stability;
22 *
Quick response for economic development needs;
23 *
Financial stability;
24 *
Staying current with technology; and
25 *
Maintaining trained, quality faculty.
Challenges for the future
Articulation agreements - BOR agreement is only the first step, there is need to work with all
educational providers, both in the secondary and post-secondary levels. Funding technology is
another challenge, there has been a 50% decrease in the past 3 years from the Governors Office of
Economic Development. Quick response to economic funding needs is another issue. The
distribution formula comes from the amount of students placed in jobs. The funding formula no
longer matches the current educational climate. With the current structure, 6-12 months is needed
to get a program approved. A 4 year cycle occurs by the time funding is available for the program.
Affording and maintaining quality faculty is another real challenge for the future. Maintaining
facilities - nearly a 20% increase in square footage over 10 years with no increase in O&M (adjusted
for inflation). Governance stability. Developing a shared vision for the future of SD Technical
Institutes - from stakeholders, policy makers, with other educational institutions, and with
accreditors. Maintaining affordability for our students, as SD is in the upper quarter of two year
institutions nationwide.
Representative Putnam requested further information on the articulation agreements. Mr. Williams
reported on Lake Area Technical Institute that the agreement put together is in the best interest of
the students of SD. In a nutshell, 14 programs are in place and are ready to be signed. VATS degree
is for applied technical science where they will take 64 credits, which is found not to be popular. For
instance the electronic students would like to go onto SDSU to get their engineering degree. The
range of credits is around 15-57 that would transfer on a program to program basis (not including
general education classes). Student teacher ration is from 13 to16.
Senator Apa asked how much they would be losing under the net agreement? Mr. William replied
that it is around $50,000.
Chris Paustian stated that the primary providers are Dakota State and Northern State. The students
here are technical and prefer to finish their degree here. Loss of revenue is $12,000, which has to do
with the number of general education classes. There are two general education classes currently that
are transferable.
Rich Gross stated that the data impacts 39 areas in 6 courses. The dollar amount is approximately
$45,000 in loss revenue. The primary partner is Black Hills State. The majority of our students do
not articulate to a state university, but the articulation agreements would give the students the
opportunity to do so. In this way, the students would not have to start over to get a bachelors degree.
Jeff Holcomb stated that there is interest at Southeast Technical Institute in establishing articulation
agreements with the Board of Regents but they have some concerns.
Representative Klaudt asked about the 0% local funding. Mr. Gross responded that basically there
are zero funds coming from local sources. Local school boards do not provide funding. Senator
Napoli asked why it is taking so long to sign? Mr. Paustian replied that there are several intuitions
involved which causes delays. Senator Smidt referred to one of the 13 questions the committee asked
about providing courses via different teaching methods. Mr Gross replied that that the mobile lab
is done and was showed at the stock show this year. Also, several students have been taking classes
via internet. The mobile unit is working very well. Dual enrollment options are expanding in the
southern hills.
Representative Hunhoff asked who pays for new building projects. Mr. Holcomb replied that bonds
are used through the students that pay off a fee.
Representative Putnam asked if the Governor 2010 imitative effects the technical institutes in any
way. Mr. Gross replied that there is definite impact. For example high tech development such as the
deep underground labs.
Representative Glenski asked about the LPN students to start towards an RN which will be offered
in the Southeast campus. Senator Apa asked Mr. Holcomb if they are expanding past what the
original goal was? A review was conducted and the decisions was made that there is a need for all
people to have good English skills and other general education classes. General education classes
are not remedial level. Senator Earley asked what the dollar amount was for tuition. The costs is $60
and has not changed since 1958.
Representative Tidemann asked what the breakdown is on the students? Mitchell Technical
University never has more than 50 from out of state. Western Dakota Tech has less than 10%.
Southeast has approximately 15-25%. The other one is recruiting from Minnesota. There is no
difference for in-state or out-of-state tuition. Senator Napoli said that there is concern that there is
no change in the mission. Mr. Gross said that the mission is and remains to prepare students to go
directly into the job market. Representative Haverly asked what the retainability within the state on
graduates. Overall it is around 82-87%. Western Dakota Tech is about at the 5% range when going
into a regental system.
Senator Apa asked what other fees there are? Southeast there are other fees that average $40 so it
averages to about $100/hr. A three credit course is about $180 less than through the state inst.
Attorney General Larry Long introduced the following staff: Kevin Thom - Director to the Division
of Criminal Investigation, Kay McLain - Finance, Roxanne Gede - Deputy.
Civil Litigation is asking for 2 FTEs in legal services. The quantity of civil cases filed against the
State, and the type of cases filed against the state, has changed over the last 15 years. In addition to
the increasing number of civil cases challenging statutory enactments or executive branch actions,
the number of complex civil cases has also increased. Because of the lack of a civil litigation section,
any civil litigation commenced or defended by this Office is handled by attorneys assigned to other
areas, predominantly from the Natural Resources Division, with assistance in certain cases from
attorneys in the Appellate and Criminal Litigation Divisions. Because the Natural Resources
Division has experienced civil litigators, the brunt of complex civil litigation of all types falls upon
the attorneys in that division, even when the issues have nothing to do with natural resources. This
has a ripple effect on the entire office. This is the smallest office in all 50 states. Also asking for 1
FTE for Project Safe Neighborhoods. the FTE would be located in the lab. The focus is to react
appropriately to criminals with firearms.
An increase of $24,000 is requested for BIT costs. $20,000 is requested for overtime, and $15,000
is requested for maintenance agreements and supplies, and $13,000 for travel. An increase of
$195,731 is requested for Internet Crimes Against Children (ICAC).
Master Settlement Agreement overview in three parts:
32 *
Payments: Participating manufacturers agreed, in consideration of the release, to make
payments to the state over time. At execution of the MSA, these payments to the states had
a present value of $206 billion.
33 *
Public health restrictions: Participating manufacturers agreed to limitations on their
advertising and marketing of cigarettes, with a particular emphasis on reduction smoking by
youth.
34 *
Release: States released participating manufacturers from specified claims that the states (not
individuals) had and might have in the future for state-paid health care costs arising out of
tobacco related illnesses.
Master settlement agreement summary for Attorneys General
Payments under the MSA
35 *
Initial payment is already made.
36 *
Payments to American Legacy Foundation (part of public health provisions).
37 *
Annual Payments to States.
Annual payments to states
38 *
Commenced in 2000 and continue in perpetuity. The Attorney General gets about .35% of
total payments made which is $20,000,000/year. This money will go to the bond company
and in exchange, we get a special cash payment of $278,000,000. This can be adjusted for
inflation (up to 16% since 2000), a volume adjustment, and a none participating manufacture
adjustment.
39 *
Payments are made by OPMs and SPMs.
40 *
Payment is allocated to the states by an allocation percentage that was determined in the
MSA.
41 *
South Dakota's annual payment:$20 million.
Senator Apa asked if there are any tobacco companies exempt from the MSA, especially concerning
the reservations. Attorney General Long replied that those on the reservations claim that they are
exempt but the Attorney General claims that the reservations are not. There are tax agreements with
several of the reservations that have been in place for up to thirty years and there are no problems
with these reservations. However, some tribes are aligned with the Attorney General and some are
aligned against the Attorney General. It is the states responsibility to keep the non-participating
manufactures in alliance.
The service we provide is the program Internet Crimes against Children. We need people with
expertise in computers to extract the information that is useful, much of which comes from computer
hard drives.
Representative Hunhoff asked what is it going to take to get SD independent for national recognition
in order to get federal funding. Mr. Thom answered that it will take staff, and public education.
One of the requirements for non-participating manufacturers is that they make payments to
ESCROW funds - a rough equivalent to the amount the participating manufacturers have to pay to
the state. The competitive advantage is about $.50/pack. This law is pretty uniform from state to
state. After one of these accounts has been established, they need to be audited to make sure they are
in compliance to what is sold. If the Department of Revenue (DOR) runs into problems, they come
to the Attorney General. The Attorney General gets them into legal compliance where as the DOR
keeps them in factual compliance. The DOR and the Attorney General works in conjunction with
one another.
Representative Klaudt assumed chair.
The purpose of the ESCROW accounts is to level the playing field. If we want to bring litigation
against one of these non-participating accounts, the ESCROW account will have a fund to pay the
claim. In this way, there will be a source of revenue, which would make it worth our while to sue.
Representative Hunhoff asked if the ESCROW account is at the state level or national level. There
should be at least one ESCROW account for every non-participating manufacturer who wants to be
in compliance with state law so there will be a serious of them. They are established per
manufacturer. Ms. Gede answered that SD has a separate ESCROW account for every one of the
manufacturers that are non-participating.
Representative Hunhoff asked if they are only used for litigation or if they are used for something
else. Attorney General Long answered that the ESCROW accounts cannot be used by the Attorney
General at all.
Senator Earley asked how many states have done the bonding of settlements. The answer was around
half a dozen. The Attorney General is comfortable that it is doing a good job.
MOTION:
ADJOURN
Moved by: Greenfield
Second by: Peters
Action: Prevailed by voice vote.
Wendy Weinert