The prayer was offered by the Chaplain, Pastor Alex Haines, followed by the
Pledge of Allegiance led by Senate page Andrew Corbine.
Roll Call: All members present except Sen. Peters who was excused.
MR. PRESIDENT:
The Committee on Legislative Procedure respectfully reports that the Secretary of the
Senate has had under consideration the Senate Journal of the third day.
All errors, typographical or otherwise, are duly marked in the temporary journal for
correction.
And we hereby move the adoption of the report.
The Committee on Transportation respectfully reports that it has had under consideration
SB 21 and returns the same with the recommendation that said bill do pass.
Also MR. PRESIDENT:
The Committee on Transportation respectfully reports that it has had under consideration
SB 14, 15, 16, and 22 and returns the same with the recommendation that said bills do pass and
be placed on the consent calendar.
The Committee on State Affairs respectfully reports that it has had under consideration
SB 44 and returns the same with the recommendation that said bill do pass.
Also MR. PRESIDENT:
The Committee on State Affairs respectfully reports that it has had under consideration
SB 43 and returns the same with the recommendation that said bill do pass and be placed on the
consent calendar.
The Committee on Taxation respectfully reports that it has had under consideration SB 57
and returns the same with the recommendation that said bill do pass and be placed on the
consent calendar.
I have the honor to inform your honorable body that the House has adopted the report of
the Joint-Select Committee relative to setting the compensation schedule for the elective and
appointive officers and employees of the Senate and House for the Ninety-third Legislative
Session.
I have the honor to inform your honorable body that the House has adopted the report of
the Joint-Select Committee for the purpose of arranging legislative days for members, officers,
and employees of the House and Senate.
I have the honor to inform your honorable body that the House has adopted the report of
the Joint-Select Committee relative to making arrangements for the distribution of the official
directory, Senate and House Journals, bills, and other legislative printing.
I have the honor to inform your honorable body that the House has adopted the report of
the Joint-Select Committee for the purpose of securing chaplains for the Ninety-third
Legislative Session.
I have the honor to inform your honorable body that the House has adopted the report of
the Joint-Select Committee relative to making arrangements for a memorial recognition of
deceased former members of the Senate and House.
Sen. Curd moved that the report of the Joint-Select Committee relative to the joint rules
as found on page 53 of the Senate Journal be referred back to the Joint Select Committee for
reconsideration.
So the motion having received an affirmative vote of a majority of the members-elect, the
President declared the motion carried.
Sen. Curd moved that the report of the Select Committee relative to the senate rules for
the Ninety-third Legislative Session as found on page 57 of the Senate Journal be adopted.
The question being on Sen. Curd's motion that the report of the Select Committee relative
to the senate rules for the Ninety-third Legislative Session be adopted.
And the roll being called:
Yeas 34, Nays 0, Excused 1, Absent 0
Yeas:
Bolin; Cammack; Cronin; Curd; Ewing; Frerichs; Greenfield (Brock); Haverly; Heinert;
Jensen (Phil); Kennedy; Killer; Klumb; Kolbeck; Langer; Maher; Monroe; Nelson; Nesiba;
Netherton; Novstrup; Otten (Ernie); Partridge; Rusch; Russell; Soholt; Solano; Stalzer; Sutton;
Tapio; Tidemann; White; Wiik; Youngberg
Excused:
Peters
So the motion having received an affirmative vote of a majority of the members-elect, the
President declared the motion carried.
SB 67 Introduced by: Senators Kolbeck, Bolin, Cammack, Cronin, Curd, Ewing, Frerichs,
Haverly, Heinert, Jensen (Phil), Klumb, Maher, Monroe, Nelson, Nesiba, Netherton,
Otten (Ernie), Rusch, Russell, Solano, Stalzer, Sutton, Tidemann, White, and Youngberg and
Representatives Holmes, Barthel, Campbell, Dennert, DiSanto, Johns, Johnson, Kaiser, Mills,
Pischke, Ring, Schoenfish, Smith, Steinhauer, Willadsen, and Zikmund
FOR AN ACT ENTITLED, An Act to permit a victim of child sex trafficking or
exploitation to expunge any criminal or delinquency record obtained as a result of the
victimization.
Was read the first time and referred to the Committee on Judiciary.
FOR AN ACT ENTITLED, An Act to revise certain provisions regarding the assistance
provided to counties by state firefighting resources.
Was read the first time and referred to the Committee on Local Government.
SB 69 Introduced by: Senators Ewing, Bolin, Curd, Haverly, Jensen (Phil), Kennedy,
Klumb, Maher, Novstrup, Peters, Rusch, and Youngberg and Representatives Johns, Barthel,
Beal, Holmes, Howard, Johnson, Peterson (Sue), Rhoden, Rounds, Schoenfish, Steinhauer,
Tulson, Turbiville, and York
FOR AN ACT ENTITLED, An Act to allow certain registration and permit documents to
be stored and presented electronically.
Was read the first time and referred to the Committee on Transportation.
SB 70 Introduced by: Senators Ewing, Curd, Haverly, Jensen (Phil), Kennedy, Klumb,
Maher, Nelson, Novstrup, Otten (Ernie), Peters, Rusch, and Youngberg and Representatives
Beal, Clark, DiSanto, Gosch, Howard, Kaiser, Lust, May, Peterson (Sue), Rhoden, Rounds,
Steinhauer, and Zikmund
FOR AN ACT ENTITLED, An Act to define the term, serve, for the purposes of regulating
the sale and use of alcoholic beverages.
Was read the first time and referred to the Committee on State Affairs.
SB 71 Introduced by: Senators Curd, Cronin, Greenfield (Brock), Haverly, Novstrup,
Otten (Ernie), Partridge, Russell, Soholt, Solano, Stalzer, Tidemann, White, and Wiik and
Representatives Hunhoff, Anderson, Brunner, Clark, Dennert, Duvall, Haugaard, Hawley,
Holmes, Johns, Lake, Lesmeister, Mickelson, Otten (Herman), Peterson (Kent), Pischke, Qualm,
Reed, Rhoden, Schoenfish, Smith, Steinhauer, Stevens, Turbiville, and Wismer
FOR AN ACT ENTITLED, An Act to revise certain provisions related to a license renewal
for the practice of medicine, osteopathy, surgery, or obstetrics.
Was read the first time and referred to the Committee on Health and Human Services.
Sen. Youngberg moved that the Senate do now adjourn, which motion prevailed and at
12:20 p.m. the Senate adjourned.
To begin, I would like to recognize two new legislators. First, Doug Barthel. I appointed Doug
this summer to replace Don Haggar as a District 10 representative. As you know, Doug spent
his career in law enforcement, including twelve years as Sioux Falls chief of police. He was
here last month, and sworn in prior to the Budget Address, but let's welcome him again.
Second, is Mike Diedrich. I appointed Mike last month, following the loss of our friend
Craig Tieszen. Mike is an attorney and an experienced legislator, having served 3 terms in the
1980's and 90's. I really appreciate his willingness to serve, especially on such short notice.
Please join me in welcoming Mike Diedrich.
Today, I would like to look back at some of the things we have accomplished together over the
past seven years, and also update you on some progress. And I will also offer some new
proposals to consider this year.
In March, the National Governors Association sponsored my visit, along with several other
governors, to Switzerland and Germany, to learn about their long-standing work-based
education programs.
In June, I met at the White House with President Trump, Ivanka Trump, the U.S. secretaries of
labor, commerce, and education, and several of my fellow governors. There, the President
signed an executive order to encourage development of apprenticeship programs. Last fall,
I was pleased to be named to the President's task force on apprenticeships.
Also in June, I began a one-year term as chair of the Western Governors Association, and I have
selected workforce development as the policy focus for my one-year term. The WGA held
workforce summits in Sioux Falls, Denver, Oklahoma City and Seattle, and next summer
South Dakota will host our annual meeting in Rapid City.
Through all of this, I have seen two inter-related problems in South Dakota. From the perspective of businesses and employers, our state does not have enough workers in many
skilled fields, and this is a barrier to economic growth. We have companies that do not expand,
or that turn away business, because they cannot hire enough skilled workers to do the work.
Almost any business owner will identify workforce as a significant concern.
But we must also see this from the perspective of our young people. We want them to receive
an education that allows them to find well-paying, fulfilling jobs, here in South Dakota.
We have an excellent education system in our state, but we must help all of our young people
achieve this goal. So, how are we doing?
First, some national perspective.
It's clear that post-secondary education is important in today's job market. When I graduated
from college in the early 1970's, post-secondary education was not especially common. A few
years ago a Harvard University study, entitled Pathways to Prosperity, looked back to 1973.
At that time, nearly three-fourths of jobs were held by workers with a high school diploma or
less.
In 2016, Georgetown University's Center on Education & the Workforce issued a report,
America's Divided Recovery, which found that only 34% of jobs are now filled with employees
with a high school diploma or less.
This trend toward workers with more than a high school diploma began in the early 2000's and
has recently accelerated. And jobs for those with no post-secondary training are trending down
even faster. Georgetown's report showed that in the six years after the recession ended the
economy added 11.6 million jobs. 11.5 million of them, or 99%, have gone to workers with at
least some post-secondary education. Those with a HS diploma or less gained only 80,000 jobs,
less than 1% of those jobs.
Looking at it another way, this graph from Georgetown University shows first the loss of jobs
during the recession and then the recovery of jobs. The shaded area on the left shows the
recession from December 2007 to January 2010. The blue line shows jobs held by those with
a bachelor's degree or more. The numbers show slight gains and losses during the recession and
then when it ended, 8.4 million new jobs were added for those with a bachelor's degree or
higher. The orange line shows jobs held by those with an associate's degree or some college
short of a bachelor's degree. You can see about 2 million of these jobs were lost during the
recession, but regained afterward plus 1.1 million more. The green line shows jobs held by
those with a high school diploma or less. About 6 million jobs were lost during the recession
and those with a high school diploma or less have regained only 80,000 of them.
So given this, we want our kids to graduate from high school, and then pursue some
post-secondary education. These are things we are already encouraging. So again, we have to
ask ourselves, how are we doing there, in South Dakota?
To help us understand what has been happening, last spring I asked our Department of Education to look at the ninth graders who enrolled in high school in 2006, ten years ago, to see how they fared over the next ten years. Why ten years? Because it takes most students 4 years to graduate high school, and some students graduate college or tech schools in 2 years, some in
4 years, some in 5 years, and some might take 6 years to graduate. Most of the rest have quit
by that time.
So let's look at 10 years. Our best data is for students in public schools. We had 10,513 ninth
graders enter high school, in South Dakota, in the fall of 2006. Now to make the numbers easier
to follow, we'll talk about 100 of them as representing the cohort. Of those 100 ninth graders,
23 did not graduate, leaving 77 high school graduates. Of those 77 graduates, about two-third,
52, entered some kind of post-secondary education. Some began a two-year program; some
started a 4-year program. Less than half of them completed their program in South Dakota by
2016. So six years after they began, less than half had completed.
Thus, of those 100 ninth graders, less than one-fourth of them persisted to complete a
post-secondary education effort within ten years. Some of the others have found or will find
success - through directly entering the workforce and succeeding there, or joining the military,
or through transferring and graduating from an out-of-state institution, or some other means.
But many of these will not find the success we want them to find.
This situation is not unique to South Dakota. It is a problem seen across the nation. Colorado
has a chart like this. It is almost exactly the same as ours, although ours is a little better.
California has a similar chart. One piece of good news is that South Dakota is getting better.
Our high school graduation rate is improving. At the post-secondary level, the state
universities are very focused on improving retention rates through graduation. Our best
technical schools have a graduation rate over 70%. So we are improving. Still, we have a long
way to go. Too many students still do not complete their post-secondary efforts.
Among young people who do pursue additional education after high school, many are unaware
of which educational pathways lead to skills or credentials which are in demand and qualify a
person for a good job.
Two summers ago, I hired a high school student to do some work at our farm. He was a good
student - hard-working and respectful - with good grades. I asked about his plans after
graduation. He said he was going to enroll in a private university to major in psychology.
Tuition, room, and board at this school amounts to about $90,000 for four years, and that's if you
graduate in four years. And mind you, these days, only about one-fourth of the students who
enter a four-year degree program, graduate in four years. Later, I asked this young man to lunch
and provided him with New York Federal Reserve data, showing poor job prospects for
psychology majors, with those few jobs paying $25,000 or less. I also showed him that the
number of psychology majors is huge, with much competition for the few jobs available. He was
surprised - he had no idea. He said, "This is disconcerting!" That's a quote! "This is
disconcerting!" You know that's a smart kid, right?
He was right - it should be disconcerting. I'm not saying a psychology major can't be successful.
Some employers require a bachelor's degree, in any field, as a prerequisite to applying. And
many young people with social science degrees go on to graduate school. That's what I did. But
young people need to know this information when they are making these decisions, before they
make these decisions.
We have taken several steps to improve this situation, through an effort we are calling
"Career Launch." We are encouraging high schools to expand the availability of work-based
education experiences, such as apprenticeships, internships, or job shadowing during school.
The best way for young people to learn about careers and find fields they like - or don't like -
is to experience them.
In addition, these work experiences help our young people learn how to arrive on-time, how to
dress appropriately for the job, how to interact with co-workers and customers. With fewer
students holding jobs while in high school these days, work-based education experiences may
be the best way, or even the only way, to learn the "foundational skills" that every employer
expects of every employee.
Let me give you an example. In Yankton, many high school seniors plan their schedules so that
their traditional classes are compressed into half a day - either the morning or afternoon. During
the other half of the day, the student works at a paid internship with an employer in town. The
student receives high school credit, paid at least $11 an hour, gains exposure to a career field,
and learns the those "foundational skills" I just mentioned.
This month, we are piloting Career Launch with four school districts - Sioux Falls, Rapid City,
Yankton, and Brookings - that have already taken some steps in this direction, so that we can
learn from them and help them move forward as well. We hope to expand this effort in the
future to more districts. Assigned personnel will help schools coordinate with employers to add
work-based learning experience opportunities. They will also supplement a school's career
counseling services, so that young people receive more information about career fields and
education pathways.
CyberSecurity, Networks, & Software
Here is one example: last month, I joined an announcement in Sioux Falls of a partnership
among Dakota State University, Southeast Technical Institute, the Sioux Falls School District
and the South Dakota Department of Labor and Regulation.
Through this partnership, high school juniors and seniors will take dual credit courses in
cybersecurity, network services or software development. These dual credit courses will count
toward their high school diploma. The courses will also count as "stackable" credentials toward
college credit. Students can earn a certificate from Southeast Tech, stop there, or go on to an
associate's degree, stop there, or go on to a bachelor's degree at Dakota State University.
Students will also have the opportunity to work in a local business, using their course training.
The Department of Labor will be working with Dakota State and Southeast Tech to create a
registered apprenticeship in these technology fields.
This is an example of the type of work-based education that I hope will take root in South Dakota. I'm particularly excited about this. When I was in Switzerland, I saw many students in in high-tech apprenticeships. We need to change the notion that apprenticeships are
confined to the construction trades, such as electricians or plumbers or carpenters.
Apprenticeships can offer a pathway for training in MANY career fields.
We are emphasizing training in these cyber fields not only because of in-demand, well-paying
jobs, but also because it is a strength of Dakota State University. Dakota State announced last
summer a generous $30 million gift from Denny Sanford, and Miles & Lisa Beacom. This gift
to the Beacom College of Computer and Cyber Sciences will keep Dakota State a national
leader, where it is already a center of excellence designated by the National Security Agency and
the Department of Homeland Security. New programs, scholarships, and a new research facility
are all being added.
Build Dakota
Of course, the gift to the Beacom College is not the first time that Denny Sanford has made a
major donation to advance workforce development. In 2014, he donated $25 million, which the
state matched, to launch the $50 million Build Dakota Scholarship Fund. Now in its third year,
approximately 300 students annually receive full-ride scholarships to attend a technical institute.
These students enroll in a high-need program, and promise to work in South Dakota after they
graduate in fields like precision agriculture, automotive, surgical technology, robotics,
electrician, or nursing.
Nationally, over the past four years, enrollment in two-year institutions is down nearly 11%.
In South Dakota though, during that period, technical institute enrollment is up 2%. And in
Build Dakota programs, up nearly 10%. The first Build Dakota scholars graduated last fall, and
today 208 recipients are working in South Dakota in a high-need field.
Dual Credit
Another important opportunity for high school students is the state dual credit program, now in
its fourth year. You've heard me say it many times: dual credit is a win win win. Students win
because these are the cheapest college credits they will ever buy, and they get a head start on
college or tech school. High schools also win because they can expand their course offerings
at no cost to the school district. Universities and tech schools win as well. Although we do ask
them to discount their tuition rate, this program attracts more South Dakota students to our
institutions, retains more freshmen after the first year, & helps graduate students on time.
Last year, 2,224 high school students took at least one dual credit course from a university;
another 934 took a technical institute course. The pass rate is excellent - over 90%. And the
cost savings are substantial. Last year, these students saved an estimated $5.3 million,
compared to the tuition rate they would otherwise pay.
This year, I will propose to update the state dual credit statute, and to clarify the manner in
which the students, the institutions, and the state share the cost of this program. I hope you will
support that legislation.
As I mentioned, I have made workforce my policy initiative for the Western Governors
Association, and I invited U.S. Secretary of Labor Alex Acosta to participate in our first summit
in Sioux Falls. When he was here, he asked me as WGA chair to promote another issue that is
a priority of the Trump Administration: streamlining professional licensure.
The Trump Administration is concerned that professional licensure standards hurt the economy
by creating a barrier to entering many professions. Licensure can also make it difficult for
professionals to move, because each state has its own licensure requirements. Clearly,
professional licensure plays an important role in protecting the public - no one wants to be
operated on by an unlicensed doctor or have one's house wired by an unlicensed electrician. But
we must be sure that licensure isn't used to keep qualified workers out of the market.
I reached out to the governors of North Dakota, Montana, Wyoming and Colorado, and all
expressed an interest in a reciprocity compact for professional licensure. The idea is simple:
if already licensed in one state, a professional can move to another member state and practice
for eighteen months - enough time to earn a license in that state if one chooses to do so. This
year, I will ask that you pass a statute to create this compact, and to create reciprocity with any
other state that also enacts it. The hope is that a number of western states will establish this
compact, which then can spread to other states as well.
In the first year, average teacher pay in South Dakota increased 8.8%. We saw sizable salary
increases across the state, in small districts and large. In fact, some of the largest percentages
actually happened in small districts. In Faith, average teacher salaries increased 24.7%. In
Waubay, they increased by 26.4%. In Leola, average teacher salaries increased by 28.7%.
I have heard from many superintendents that these increases have improved their ability to
recruit and retain teachers. Although certain geographic areas or fields of study are more
difficult, we have improved the situation greatly.
I'm happy to report that the new money is being put to good use. The state has awarded 298 construction contracts amounting to $750 million. These projects have encompassed work on 6,078 miles of state highway and 172 bridges, many of these projects would not have been possible, many of these repairs would not have occurred, without this new revenue.
No one likes tax increases, but it is less expensive to maintain a good road than to rebuild a bad
one. As Ronald Reagan said when he proposed a gas tax increase in 1982: "The bridges and
highways we fail to repair today will have to be rebuilt tomorrow at many times the cost."
On our farm, when I was a boy, we always had a big garden, and we ordered plants and seeds
by mail from Gurney's in Yankton. With every order, Gurney's would always enclose a "bonus"
item, as a gift. One year, our bonus was a hackberry bare-root seedling, only a foot long.
My dad and I planted that seedling, and now, fifty years later, it's strong and tall. Here's a
picture of that tree today.
Before us come so many issues - deferred maintenance, highways, criminal justice, teacher pay
- that can't be solved in one year. But a start must be made. We could kick the can down the
road, but the problem would only worsen. And so, we must do what we can, with bipartisan
support, and without regard to politics. These things require patience, persistence, and attention
to small details. It's a conservative approach - being a good steward of the state and its assets.
When I was running for governor, I promised to analyze state-owned property and right-size or
sell unneeded assets. Looking back, in the 1800's, when South Dakota became a state, we
housed people with mental or physical problems in large, state-owned institutions, often for life.
We built big state hospital campuses in Yankton, Redfield, Custer and elsewhere. Sadly, many
people were often sent away, and forgotten by their families.
We now know that, in most cases, it is better to serve our citizens in their homes and
communities, often through community-based providers. But the state has continued to own
these large, old campuses, decades later. Some of the buildings, when I took office, were still
being used, but others had fallen into significant disrepair after being vacant for decades.
It's irresponsible to let vacant buildings fall in on themselves, and also irresponsible to spend
taxes maintaining unneeded property. It's better to return these properties to the tax rolls.
We began to address this in Yankton at the Human Services Center. We demolished several dilapidated buildings, sold land that was no longer needed, and negotiated a lease-purchase with
the local Historical Society to preserve the historic Mead Building. That restoration, funded by
charitable gifts and local taxes, is near completion.
We have addressed this problem on other state campuses - selling surplus property in Redfield,
Custer County, and Minnehaha County. We sold the Plankinton training school campus to the
for-profit company that was leasing and operating it. And the Board of Regents is exploring
options to better use the School for the Deaf campus in Sioux Falls.
This philosophy extends to current state buildings as well. We must properly maintain them,
so future governors and legislatures aren't left with more rundown buildings. Together we have
set a goal of appropriating two percent of value in maintenance and repair of state buildings and
our budgets, including university buildings. This year I'm proposing to add state-owned
technical institute buildings as well. Due to our budget situation, we cannot get quite to
2 percent, but it needs to remain a priority and we need to make a start.
Beyond maintenance, through our own captive, we now insure all state buildings & have made
safety improvements, such as the new fire protection system in the Capitol. When I took office,
this building was uninsured, for example. Many state buildings were uninsured.
While preserving our physical assets, we're also keeping South Dakota on sound financial
footings. We passed a constitutional amendment explicitly requiring a balanced budget, and
we've structurally balanced our budget every year I've been in office, honestly. We have
improved many financial practices, placing them in statute and putting more financial
information online than ever before. We have maintained reserve funds of at least ten percent
of general fund expenditures. And when we had excess reserves, we used them to prepay debt.
I'm very proud that we have kept our pension fund fully funded - one of just a handful in the
nation. The trustees of the South Dakota Retirement System have led the nation in their
innovative reforms to protect the pension plan, long-term.
These sound practices have earned South Dakota a AAA credit rating, the highest possible, from
all three major rating agencies. We should all be proud of this.
We can also be proud of the work we have done to preserve and improve South Dakota's
outdoors and natural resources. We created Good Earth State Park, which is significant not only
for its natural beauty but for its historical and cultural significance to Native Americans. Our
state buildings are more energy efficient, and our redesigned Governor's Houses use less energy.
Our new buffer strip program has just begun to increase natural grasses, to improve water
quality and create more wildlife habitat.
And in the Black Hills, we completed a multi-year effort to fight the mountain pine beetle,
opened a new beautiful visitor center in Custer State Park, and improved other facilities. On
the interstates, we are also refurbishing rest areas and creating welcome centers at our borders
to welcome more visitors to South Dakota.
And, to return to the analogy of planting trees, over the past seven years we have literally been planting trees. On the Capitol complex alone, we have planted more than five hundred trees, and in our state parks, thousands more.
Despite the arduous conditions, we were very fortunate to have our own seasoned Type II
Incident Team based in the Black Hills, to lead the response. We could not have responded as
quickly or as effectively without South Dakota Wildland Fire Type II Team.
Professional and volunteer firefighters from across the state and region responded to give aid.
Local ranchers and Custer State Park staff all contributed. When high winds caused the fire to
jump containment lines, firefighters, emergency responders, law enforcement, and park staff
went door-to-door to help families evacuate as the fire pressed at their heels. More than
340 firefighters worked that night, or in the days after, to protect primary structures.
Thanks to the efforts of all involved, no lives were lost, no one was injured, and no homes or
primary structures were lost. All 175 houses in the area were protected and the farmers,
ranchers, and local residents all had a home to which they could return for Christmas.
A fire can sometimes be healthy if it clears unwanted undergrowth, and in many areas that's
what happened. Thankfully the buffalo herd and wildlife were largely unaffected. We did lose
fencing, most of our winter pastures, and some stands of timber. But new fencing is being built,
some of the buffalo moved to an unburned area, and we are buying some hay. We are also
working on a salvage timber sale to capture some value from the burn. Custer State Park
reopened just 11 days after the fire started.
This could have been much, much worse, if not for the hard work and heroic efforts of our
firefighters. It was South Dakota at our best - people from all across the state pulling together
in a time of need. Please help me thank them now.
You heard that message, went to work, and the Open Waters Compromise you passed is already
working. Today, more than 99% of all nonmeandered bodies of water with managed fisheries
are open for recreation.
This is not just a win for South Dakotans who enjoy fishing and boating. The owners of the
ground under these waters have demonstrated their support for the compromise by keeping
nearly all of these waters open. And this process has created a new dialogue among sportsmen
and landowners, which has been positive for all.
Through our revamped Open SD website, the public can easily access state financial information
and see the same financial metrics that I see every week. We launched the Boards and
Commissions Portal, which is a one-stop site for meeting notices, agendas, and information
previously difficult or impossible to find. Another website, SD.net, has dramatically increased
availability of live streaming for public meetings. Still another, the Administrative Rules
website, helps citizens follow the rulemaking process.
This body has also done a number of things to advance transparency and accountability in state
government. Last year you took up many ethics measures to codify the concepts of Initiated
Measure 22 that were supported by South Dakotans. Public servants from West River and
East River, on the right and the left, and in the legislative and executive branches came together
to pass these bills. A total of nine replacement measures were passed. Under these new laws:
1 * Legislators, statewide elected officials and agency heads are prohibited from accepting
expensive gifts from lobbyists;
2 * New whistleblower protections have been created for state and local employees;
3 * Legislators and high-ranking executive branch officials who leave state service may not
lobby for 2 years;
4 * Campaign funds may not be used for personal expenses or transferred to a personal
account; and
5 * A new accountability board has been established to receive ethics complaints, initiate
investigations, and refer criminal activity to the Division of Criminal Investigation. In
July I appointed four retired judges to this board - two Democrats and two Republicans.
Better government is about more than accessibility and transparency, though. It is also about
efficiency.
Today you can go online to renew your driver's license; apply for a pardon; search and apply for state jobs; look up the status of an inmate or parolee; see the restaurant health inspection scores; and compare your take-home pay to other states. State government has apps to buy hunting and
fishing licenses, explore travel destinations, see road conditions. Agencies are using social
media to spread information more quickly and to directly communicate with South Dakotans.
We offer GIS maps to help the public find land for hunting, locate recycling facilities, pinpoint
oil and gas wells, determine lake levels, identify waterbodies eligible for buffer strip protections.
Our state has been at the forefront of the national efforts to solve this problem. We continue to
hope that Congress will address this problem. In the meantime, two years ago this body passed
Senate Bill 106 to require online sellers without a physical presence in South Dakota to collect
and remit sales tax. Since then, over 100 companies like Amazon have come forward to do this
voluntarily.
Other retailers challenged our ability to collect these taxes, and we knew they would, and that
case is working quickly through the judicial process. This month, we expect to hear whether
or not the U.S. Supreme Court will take up our case.
The National Governors Association, the Tax Foundation, the National Retail Federation, and
the American Farm Bureau Federation have all joined South Dakota and 35 other states in
urging the U.S. Supreme Court to take up the case.
We can't know how they may rule, but we can be proud that South Dakota has been a leader in
addressing this national issue of tax uniformity. Let's hope for the sake of South Dakota
businesses, the problem will finally be resolved.
Last July, we broke ground on the Long Baseline Neutrino Facility at the Sanford Underground
Research Facility. This experiment will fire a beam of neutrinos from Fermilab near Chicago
to huge detectors at the Sanford Underground Research Facility in Lead. The experiment hopes
to unravel one of the great mysteries of the universe: the oscillation of neutrinos. This
experiment will require a $400 million construction investment in Lead that will have an
economic impact of nearly $1 billion.
South Dakota also continues to be a destination for millions of visitors. Every year since 2011,
Tourism has set new records for visitor volume and visitor spending. Since 2011, our visitor
volume has grown from an estimated 12.5 million visitors to 13.9 million in 2016, with a
corresponding increase of $450 million in visitor spending.
I am also very excited about South Dakota's emerging biotech sector. Last year, SAB Biotherapeutics broke ground on a new facility in Lincoln County. SAB Biotherapuetics
is well-known for developing the world's first large animal platform technology to produce fully
human polyclonal antibodies. These human antibodies are aimed at prevention and treatment
of human ailments like cancer, autoimmune disorders and infectious diseases. The facility in
Lincoln County will be the first of its kind designed specifically for cattle and will allow SAB to
extend and expand its capabilities, herd, and team for production of life-saving technologies.
Overall, 2017 was a great year in terms of economic development wins. The Governor's Office
of Economic Development helped facilitate deals that total over $735 million in investment and
are expected to create more than 1,400 new jobs in South Dakota.
Today, I am pleased to share that Agropur Cooperative, a leader in the North American dairy
industry, and producer of a wide variety of dairy products, is pursuing plans to expand their
Lake Norden cheese plant after an extensive multi-year site search and review. The
$250 million expansion will substantially increase daily milk processing in Lake Norden, to
eventually triple the capacity of the plant, and will require 125 new full-time employees.
Once fully operational, the Agropur expansion will have just over a $1 billion estimated annual
economic impact to the region and state. We also project it will support more than
90,000 additional dairy cows.
Last May, we also broke ground on a major new ag processing facility in Aberdeen. AGP's new
state-of-the-art soybean processing facility highlights our emphasis on adding value to our
ag products by processing them within our borders.
AGP's investment will create 50 full-time jobs and have a substantial economic impact.
Understand the scale of this, the facility will eventually process the equivalent of twenty percent
of our state's entire soybean annual crop, which will extend beyond Aberdeen and benefit
farmers by opening up a new market and increasing the price for their soybeans.
These are a just two of many 2017 success stories. There are many more. In Sioux Falls, we
supported Gage Brothers, a 100-year old South Dakota manufacturer, as it launched a new
$40 million facility.
We supported BalCon Enterprises to construct a new 22,500 square foot processing and
warehouse facility in Elk Point to add 22 full-time jobs.
In Beresford, we secured a commitment from Hendrix Genetics to build a $25 million
commercial turkey hatchery, creating 79 new jobs. This facility, will hatch over half a million
turkeys every week, great news for Beresford and for other communities in South Dakota that
could and we will see another $40 million of investment and another 48 new jobs from the
associated laying barns.
We've also supported our advanced manufacturing sector through assistance to Rapid City-based
VRC Metal Systems, which uses cold spray material coating technology jointly developed by
the School of Mines and the Army Research Lab. VRC is renovating a vacant school in
Box Elder to house its new manufacturing and office space. They plan to create 60 new
positions by the end of this year.
We are seeing success because South Dakota allows businesses to prosper. We have a low tax
burden - no corporate income tax, no personal income tax, no business inventory tax, no
personal property tax or inheritance tax. We also have low costs and reasonable regulations.
And we have been diligent over the past seven years about removing red tape. In fact, since
2011, I have proposed and you have approved the elimination of over 4,600 sections of obsolete
or unnecessary laws and rules, accounting for more than 515,000 words. And we will be
proposing more of these bills this year.
This year, I am proposing legislation to make us more competitive with our surrounding states
so this emerging industry can continue to grow.
Moreover, South Dakota's alcohol laws were written over eighty years ago, after prohibition
ended, and they have been amended many times. The statutes in this area are a mess and in
many cases they just don't make sense. I'll be supporting several bills this session to streamline
and modernize these statutes, so that they make sense for a 21st century economy.
As I explained last month, my budget proposal takes the approximately $3 million per year in
contractor's excise tax that's currently diverted to Building South Dakota, and instead directs that
money back to the General Fund.
Then, I'm proposing that we allocate $3 million, the same amount, in general funds into the funds that make up Building South Dakota. The Housing Development Authority would commit another $1.5 million annually, for the next five years. Adding $400,000 annually from the
private activity bond fund as well, this would bring a total $4.9 million in ongoing funds to be
spent, in turn, in the general appropriations bill for Building South Dakota.
This proposal would eliminate the 5% stream of dollars that's currently allocated to the
REDI fund, and would reallocate the dollars instead to the four remaining funds: the
Housing Opportunity Fund, the Local Infrastructure Fund, the Workforce Education Fund, and
the Economic Development Partnership Fund.
If we make these changes, these four funds will exist in the General Appropriations Act each
year, rather than relying on a complicated side-statute. This will make it easier for legislators
to weigh the relative benefits of each fund and to allocate future revenue increases as our needs
change.
During my time in office, I have tried to follow Governor Mickelson's example, and I visit
reservations to meet with tribal officials every year. In recent years, the Department of
Tribal Relations has facilitated partnerships among state agencies and the nine tribes.
We have tax collection agreements with eight tribes and gaming compacts with eight tribes. In
2016 and 2017, the Department of Game, Fish, and Parks signed cooperative
Memorandums of Understanding with the Lower Brule Sioux Tribe, Rosebud Sioux Tribe,
Oglala Sioux Tribe, and Flandreau Santee Sioux Tribe to improve communication and
management of wildlife and lands. And the Department of Environment and Natural Resources
has dedicated millions of dollars for the operation and maintenance of tribal drinking water
systems.
In corrections, we have implemented a tribal parole program with the Sisseton Wahpeton Oyate
that has been very successful, and leaders in Flandreau are working on a proposal to start a
similar program for the Flandreau Santee Sioux Tribe.
I value the intergovernmental relationships the state has with the tribes and the
Native Americans who call South Dakota home, and I hope we can continue to progress in these
areas.
I asked my wife, Linda, to work with a group of doctors, nurses, tribal health care workers, social workers and Department of Health officials to understand the causes of this problem. In
their research, they found that deciding against early elective deliveries, abstaining from
tobacco, learning safe sleep practices, and receiving prenatal care are critical to an infant's
wellbeing.
Now if you know Linda, you know she is someone who gets things done. Once the task force
identified the problems; she began to work toward solutions.
She joined the former First Lady of North Dakota, Betsy Dalrymple, to request that all of the
birthing hospitals in the Dakotas reduce early elective deliveries. And they listened. Every
birthing hospital in South Dakota agreed to do so.
Checking this off the list, Linda moved on to something a little tougher: tobacco use.
She worked with the Department of Health to redouble efforts to reach more pregnant moms
with resources like the 24/7 Quit Line and the new data looks promising. Since 2011, we've seen
smoking during pregnancy decline by 19.5%.
Linda has also traveled the state to promote safe sleep practices. Thanks to her, even I now
know the ABCs of safe sleep - infants need to alone, on their backs, in a crib. She has gained
donation to Cribs for Kids, a program that provides safe sleep kits to families in financial need.
Through Linda's advocacy, more than 9,200 new parents and caregivers have received these
cribs.
After seven years of Linda's work on this issue, I am very happy to report that the latest data
shows more South Dakota babies are celebrating their first birthday, with only 4.8 deaths
per 1000 live births. That's our lowest rate ever for infant deaths. Please help me thank Linda.
One recent example is in Medicaid. The Trump Administration recently indicated that, for the
first time, it is willing to consider work requirements for Medicaid enrollees who are
non-elderly, able-bodied adults. I have asked our state Department of Social Services to pursue
a waiver so our state can require people who receive Medicaid to work, if they are able.
Keep in mind that in many other states Medicaid coverage has been expanded to add many
additional adults. In South Dakota, Medicaid covers only children, pregnant women, people
with disabilities, and very low-income parents. Work requirements may only apply to a subset
of that last category - very low-income, able-bodied parents who aren't already working or
caring for a child under the age of 1. That's approximately 4,500 individuals.
I propose to pilot the new requirement in Minnehaha and Pennington counties, where there is the greatest availability of employment and of training resources. We will use the same services that we already require for those on unemployment, to help participants find jobs. And for those families whose income goes up, we will provide interim resources such as child care assistance and premium assistance to support families as they transition off Medicaid. As we wait for approval of the federal waiver, we will begin a voluntary program for participants in July.
Fortunately, South Dakota's prescription drug overdose death rate remains relatively low.
We rank 2nd lowest in the nation. That's good. Still, every one of these deaths is a tragedy, and
the over-prescription of opioids is something we have seen in our state. In 2015, for instance,
the number of opioids prescribed in South Dakota would have been enough to medicate every
South Dakota adult around-the-clock for 19 straight days.
Some solutions require a top-down approach. Last year, you passed legislation that requires
pharmacies to enter painkiller prescriptions into a statewide database within 24 hours. That
legislation also requires participation by prescribers of controlled substances in the
Prescription Drug Monitoring program. In 2015 and 2016, we put new laws in place to increase
access to naloxone, which is used to treat opiate overdose. As of the end of December, the state
has purchased and provided 807 doses of naloxone to first responders.
There is no legislative fix, however, that will completely solve this problem. We cannot
mandate away addiction, and we need health care providers, private organizations, law
enforcement, communities, and individuals to all play a role. It has been promising to see
South Dakota's health care systems provide additional guidance to their providers on when to
prescribe these drugs and it's having an impact.
The State Medical Association is doing its part as well, by developing resources for physicians
to recognize and treat opioid addiction and prescribe opioids appropriately. They will be holding
in-person and web-based educational sessions starting this month.
The Board of Pharmacy, partnering with local pharmacies, is establishing permanent sites
throughout the state, where anyone can dispose of certain expired, unused and unwanted
prescription drugs. The service is free and anonymous, with no questions asked.
In 2016, we established the South Dakota advisory council on opioid abuse. Its strategic plan
supports developing Medication-Assisted Treatment capacity. This approach uses medications,
in combination with behavioral health therapies, to provide a holistic approach to treatment.
And this year the advisory council will be working to raise public awareness about the risks of
recreational opioid use through a media campaign and school-based opioid prevention activities.
For the most part, we are seeing less meth manufactured in home-grown laboratories. It is more
often manufactured on a larger scale and trafficked into the Midwest.
The drug interdiction task force, made up of Division of Criminal Investigation agents and
Highway Patrol officers, has been hard at work over the last year to stop meth from coming into
our state and we need to continue to do more to choke off these distribution channels.
For those who are severely addicted, the Department of Social Services is working to expand
and increase access to treatment, ensuring treatment is evidence-based and that providers are
equipped and trained to provide intensive treatment models.
We've recently seen some hopeful results in substance abuse treatment. In 2017, over 69% of
individuals entering treatment for substance abuse completed successfully compared to the
national average of only 44%. Employment rates at discharge were 9% higher in South Dakota
than the national average, as well.
For adults, South Dakota had a higher imprisonment rate than any other state in our region.
Per capita, we were locking up 75% more men than North Dakota and four times as many
women as Minnesota. Eighty-one percent of new commitment admissions to prison were for
nonviolent crimes.
Among juveniles, South Dakota had the highest juvenile incarceration rate in the country. It
was nearly 3 times the national average. At the same time, our juvenile violent crime arrest rate
was approximately one-third of the national average. Again, we were locking up primarily
non-violent juvenile offenders.
In the years since those reforms, we have seen progress in dealing with nonviolent offenders.
Our drug and DUI courts have expanded capacity. Our community-based treatment programs
have been enlarged. We are seeing more probationers complete successfully.
Still, we can yet improve. It is important that we always turn a critical eye toward past policies
and be willing to adapt to changing conditions. We should always be willing to be smarter
today than we were yesterday.
We also need to recognize that there have been huge positive changes as a result of the reforms.
Functional Family Therapy, which offers treatment for the entire family to address juvenile
issues, is available in every single community in South Dakota, and we are seeing positive
results from this treatment. To date, 346 families have successfully completed this therapy and
88% of these families have reported a positive change. In the adult system, capacity in specialty
courts like Drug and DUI courts has nearly quadrupled since the passage of the reforms.
And South Dakota's substance abuse treatment and criminal thinking completers have a lower
recidivism rate than the overall DOC population. Overall, 23% of individuals released from
prison return within 12 months. I'll say that again, 23% of individuals released from prison
return within 12 months, but that rate is only 10% for those who complete this cognitive
substance abuse treatment and only 5% for those who complete moral recognition therapy.
Juvenile Justice reforms were enacted in 2015. At that time, as I mentioned, South Dakota had
the highest rate of commitment in the nation. I know we all hear concerns from law
enforcement and school leaders concerning the juvenile reforms, that's why we made some of
the changes we did last year. But when someone tells you the reforms aren't working, we need
to understand exactly: what is the problem and what policy change might address it? A broad
brush is insufficient.
The statutory purpose of the juvenile justice system is rehabilitation, and we must never lose
that focus. I spent twenty years working at Children's Home Society, which operates institutions
for children who have suffered abuse and neglect. Often these children have behavioral
problems. At Children's Home, our priority was always to do whatever we could to return
children to their families, or if that was not possible, to a foster family or adoptive family.
I know that juvenile offenders can be difficult, but we need to remain focused on what is best
for them. Locking up children because they are difficult to deal with is not acceptable. Putting
a child in an institution, away from the community, is incredibly disruptive to the life of a child.
We must reserve institutions for children who pose a risk of harm to others. Our system has
always allowed for that, and the juvenile reforms did not change that. In fact, juvenile
commitments to state-run facilities have been falling in almost every state in the nation over the
past 18 years. Nationwide, placements fell from 40,678 in 1997 to 13,970 in 2013. In
South Dakota they fell from 315 to 102, before the 2015 passage of Juvenile reforms.
Remember that those reforms passed in 2015, most of them became effective January 1 of 2016.
If you add the prior year, 2015, our placements had fallen farther still, to only 48.
Last year, we had 11 state active duty missions including wildfire response, security support for
the Presidential Inauguration, assistance to Puerto Rico following Hurricane Maria, and the
Airspace Control Alert mission, which serves to protect the country from any type of emergency
including acts of terrorism.
I am proud of the South Dakota National Guard; it continuously distinguishes itself.
For example, South Dakota leads the nation in unit readiness. The National Guard Bureau
annually designates "Superior Units" based upon personnel strength, training completion and
inspection marks. Last year, only 35 Army National Guard units in the nation were named
Superior, 35 in the nation: two are from Iowa, 10 from Virginia, the other 23 were all from
South Dakota.
Because of their service, and the sacrifices of all who have served in the military, we can meet
here today to chart the course of our state's future. And so it is fitting that we have added a
reminder of that service to our Capitol Building. Last summer, we moved our state's
"Hall of Honor," which commemorates South Dakota's Medal of Honor recipients, to the
Capitol's first floor. Formerly in the Soldiers and Sailors Building, it was not as visible and was
not accessible to those with limited mobility. One of these mornings when you arrive early, I
hope you'll pause to read the incredible stories of each of these men, who represent the very best
our state has to offer.
Drought conditions exacerbated the impact of low prices over the last few years. 2017 looks to be near a low in terms of farm income. Our economists are hopeful of some marginal improvement this year if production levels increase, but improvement will depend upon the weather, of course, and in part on federal trade policy.
During the good times our farmers and ranchers invested in themselves. Farmers adopted new
technologies and upgraded their equipment, and added grain storage and other new facilities.
Our ranchers also invested in new equipment, fencing and corrals, along with better genetics.
Those investments have positioned them to seize opportunities when times are good again.
We continue to see success under the County Site Analysis Program that helps counties identify
sites conducive to ag development. Fifty-four of our 57 counties that asked to participate in the
program have had their analysis completed, and the remaining three are currently underway.
In August we broke ground on upgrades to the Animal Disease Research and Diagnostic Lab,
which you approved last session. This lab produces critical research and diagnostic support to
protect our livestock industry from disease outbreaks. The expansion ensures the lab can address
the needs of producers when they need it the most.
Agriculture is the foundation of our state's economy and it always will be, because of
generations of resilient individuals who gave their all, working the land - combining until dark,
calving at 2 in the morning, getting up before dawn to milk, and feeding livestock in subzero
temperatures. These hardy leaders grew the industry to what it is today and they will bring us
through the next year and the years to come.
We have a high quality of life: an abundance of outdoor recreation, safe communities, good
roads, good schools. We have one of the best safe drinking water records in the nation and a
stellar clean air record.
Every South Dakotan can be proud of this state, and of the many things we have accomplished
together over the past seven years -balancing the budget honestly every year, securing
AAA status, raising teacher pay, investing in our roads, bridges and railroads. But our work is
never done. Every challenge is an opportunity to improve, and we must always seek to leave this
state a little better than we found it.
This is my twenty-second legislative session, and my final State of the State address as
governor. Linda and our three children, Laura, Sara, and Chris, are here, and I'm grateful for
their support through all these sessions, and through all the elections to earn the privilege.
I love you. I'm grateful to my sister Joyce and her husband, George, for driving from Minneapolis for this, and to Linda's sister Mary and her whole family, who have helped me. Budgets and policies and bills and operations are certainly important to me, but nothing in comparison to their importance to me. Thank you for being here.
The first State of the State I attended was in 1997, when Bill Janklow was governor. I was out
there for the very first time listening to him give this speech. If you knew Bill, you know he did
not have much respect for showboats or attention-seekers. He didn't have a lot of patience at all
sometimes. But I still remember and I looked back and found something he said in the
1997 address. He said this:
The public doesn't care about all these. dramatic moments where people take these great
stands that will be forgotten in eight minutes after it's on the evening news. They don't
mean anything. They literally don't mean anything.
I'll tell you what means something. Ten years from now when you look back on your
tenure, and I look back on mine, did you make a difference? Is South Dakota truly, in an
important way, better than it was when you found it? Because if you're not a contributor,
you're a destroyer.
Let's all be contributors. Let's be builders. Let's start the debate. Let's start the dialog.
Let's start the challenges. Let's fight the good fights, and when you all go home., let's be
able to look everybody in the eye and tell them that the things that we put in place, the
problems that we solved, the things that we funded, and the policies that we created will
be the things that make South Dakota a better place next year than it was today.
I look forward to working hard with you, over this session and over this, my last year, to make
South Dakota a better place than it is today. Thank you so much.