Majority Leader Report

It is my pleasure to send you the first Majority Leader Report on the legislative action in Pierre. I plan to send these out on a regular basis from this point forward. The legislative session is now almost halfway over, as we have completed four weeks of our work including 17 of our 40 legislative days.

At this point, the overriding issue is clearly the budget crisis. For the fiscal year which will end on June 30 of this year, Governor Rounds estimates that our revenues will be approximately $40 million less than anticipated one year ago. For the upcoming fiscal year, which will start July 1, 2009, and end June 30, 2010, the Governor estimates a gap between our revenues and ongoing expenditures of $80 million, which really becomes $95 million if you assume (as I do) that his proposals to shift $6 million of school taxes onto property taxpayers, eliminate support for sparse school districts, and eliminate special support for school districts which face significantly increasing enrollment or declining enrollments should not be accepted.

The Governor has proposed approximately $45 million of budget cuts and $15 million of revenue increases in order to help cover $60 million of this budgetary gap. It is important to remember that this is just his proposal and legislators are questioning many of the Governor’s budget cuts. In particular, there are grave concerns with regard to the Governor’s plans to eliminate the Birth to 3 program, totally cut funding for the arts, close the School for the Deaf, eliminate the program to refund sales tax on food purchases for low income citizens, and elimination of a number of features in the Medicaid program. Many of these items might have short-term benefits but really will result in long-term costs. There is no better example than the Birth to 3 program in this category. While elimination might provide some immediate savings, the failure to address correctible conditions in special needs children at these early ages will ultimately cost us much more money.

The Legislature is looking carefully at the Governor’s proposed cuts and revenue increases and is likely to make substantial changes in the Governor’s proposals on both the budget cutting side and the revenue increase side. It is my belief that the ultimate coverage of our $95 million budget gap will include a significant amount of budget cuts, some additional revenue and utilization of some of our budget reserves. I believe the Legislature would like to utilize fewer reserves than Governor Rounds. I also believe the Legislature will ultimately provide more budget cuts than revenue increases.

Beyond these observations, not much more can be said at this time, but this will be the overriding issue this entire year.

Despite these budget issues, there are other important bills also being debated on the House and Senate floors. I would like to highlight three bills I’ve sponsored that are particularly significant:

• Senate Bills 3 and 4 would finish the process the 2008 Legislature started in establishing a productivity valuation for agricultural property. These two bills have passed the Senate and are heading this week to the House.
• Senate Bill 147 is an open records bill which creates a presumption of openness for all state records while still preserving as confidential those records which our citizens have a reasonable expectation of privacy.
• Senate Bill 106 is a K-12 school funding bill which would change the index factor which governs the growth of state funding for schools from 3% or inflation, whichever is lower, to 4% or inflation, whichever is greater, with the important safety valve that the school funding formula would not increase more than the State’s general fund. This bill is particularly appropriate for 2009, a year in which the State’s general fund revenues are not growing at all. It makes no sense to me that we would essentially freeze school funding in years in which the State’s revenue is down and at the same time not give them a reasonable chance to recover when the State’s revenue itself is back over 4%. This is a particularly important bill from my standpoint.

One note of disappointment this week was the failure to pass Senate Bill 83, the comprehensive indoor smoking ban. Despite leaving the Senate Health Committee on a 7-0 vote, it was defeated by one vote on the Senate floor. I do hold hope that the House version of this bill will pass and allow us another opportunity for debate.

Over two-thirds of the Senate also rejected Senate Bill 82 by a 25 to 10 vote. Senate Bill 82 was the bill which would have prohibited the Board of Regents from restricting the carrying of firearms in college classrooms, dormitories and other spaces under the control of the Board of Regents. I think one of the major points against the bill was the fact that it would have allowed the carrying of rifles and shotguns into college classrooms. I voted with the majority to defeat this bill. The Senate has also this year considered two other gun control bills – Senate Bills 33 and 70 - which have lessened obsolete or inconsistent gun control limitations. I voted with the vast majority of the Senate in supporting both of those two bills.

Thanks for reading this report, and I hope you have found it informative. Please consider forwarding it to other friends and family who are interested in South Dakota’s Legislature. If you have any questions or suggestions for future reports, send me an email at (JavaScript must be enabled to view this email address) I look forward to providing you with another report very soon.

Sincerely,
David L. Knudson