Being thankful when I watch I Pencil

SoDakLiberty Turkey. Original turkey art © Can Stock Photo Inc. / lineart
SoDakLiberty Turkey. Original turkey art © Can Stock Photo Inc. / lineart

It is Thanksgiving week! Due to traveling and a short week at the office I will not be publishing any posts. But I wanted to take a moment to thank all of the readers of this blog for their continued support. Also, I would like to thank everyone who is involved in making the economic marketplace a truly amazing wonder to behold. Technically that includes everyone, so I would like to thank everyone being a part of the free market (or at least what remains of the free market… but that is a subject for another post).

Three years ago I posted about the I Pencil movie. Below is the contents of that post and the video for everyone to view. Happy Thanksgiving everyone!

In 1958 Leonard Read wrote a masterful essay named “I, Pencil“. I first read this essay about fifteen years ago and have always thought it a masterful way to explain how free markets can work and adapt without central planning. This essay pointed out the thousands, if not millions, of people who must interact and work together (even unknowingly) to bring a product to market.

To honor this timeless essay the Competitive Enterprise Institute, with some help from the Foundation for Economic Education, has created a well produced 6 minute video. You can view the video below or go the I, Pencil Movie website to view the video and other interesting facts about this movie and the original essay.

A chat with a supporter of the Aberdeen Library Bond, including my counterpoints

Current Aberdeen Library. Photo by Ken Santema 10/19/15
Current Aberdeen Library. Photo by Ken Santema 10/19/15

The election for the Aberdeen Library Bond has been set for December 15. But early voting has already started, so Aberdeen residents can cast their ballot at the County Auditors Office! About a month ago I published a post with a few of the reasons I oppose the bond for a new library.  Mostly I believe a new library is unneeded when the current facility can meet the needs of the community at a fraction of the cost of building a shiny new library. Shortly after that post I spoke with Troy McQuillen, the President of the Library Foundation. In this post I will pass on what McQuillen has to say and add some thoughts of my own. (Due to time constraints of my own it has taken me a month after speaking with McQuillen to do this post).

As I go through this history it was either provided verbally or through literature by Troy McQuillen. And yes, a lot of this post looks at history leading up to this library bond, mostly because I find it relevant in the discussion.

Warning: this is a long post!

Library Foundation

I first spoke with Troy McQuillen about the Library Foundation, mostly because I’ve heard a lot of different stories about what the Foundation is and where its money comes from. McQuillen noted the Foundation is a private entity that has no direct affiliation with the Library or the City of Aberdeen. The foundation was setup in the early 90’s because somebody bequeathed a large plot of land and a another person bequeathed a large coin collection to be used for the library. Until around a decade ago the farm land was rented out and coin collection was kept in a box at the library.

Around 2006 there was talk about improving the library. McQuillen said overall the city had done a good job of funding the library. But the Foundation wanted to do something for the library, such as buying new computers and/or books for the library. It was determined at that time that the library could not accept such a gift because there was insufficient space.

So then the Foundation began to look at ways to build a new library for Aberdeen. The land and coins were then auctioned to net over $500,000 for the Foundation to use. Over the years, investment returns have also given the Foundation money. Those sources left the Foundation over a million dollars to use for library improvements. That McQuillen said, gave the Foundation leverage to move forward with a project.

Before going on I’ll note there doesn’t seem to be anything nefarious with any of the origins of the Foundation or its money. Actually it is the type of private organization I like to see and support.

Plans for a new Library died in 2008

In 2007 the foundation asked a library planning firm to create a study. In 2008 the study was released based upon a comparison around the country and the expected population growth of Aberdeen. That study had four different proposals. The numbers were high and the city council would not support any efforts. One of the biggest problems with these proposals was the massive amount of space included in the plans.

The Bethlehem Lot bought

"Bethlehem Lot", the site purchased for the new library. Photo by Ken Santema 10/19/15
“Bethlehem Lot”, the site purchased for the new library. Photo by Ken Santema 10/19/15

In 2009 more research was done on a dozen locations for the feasibility of a new library. From that feasibility study it was determined the “Bethlehem lot” was the best location for the new library. This whole block was bought using $350,000 of the Foundations money and was matched by the city for the same amount. McQuillen did admit the Foundation had a requirement placed upon the city when deciding to pay for half of the Bethlehem Lot: the Foundation wanted ground broken on the new facility by 2016. The city agreed to this and had made it one of their priorities.

Room for a Library Bond

Three architects were then brought in to design something to be built on the newly purchased lot. None of these architects were really completing a plan the Foundation felt the City would pay for. So then another consulting company was brought in and took a different approach. Instead of making a huge plan that city could never afford, this planner asked how much could be spent. There happened to be a bond that was just about to be completed, the bond used for the YMCA. The money freed up by completing the YMCA bond was then provided as the money available for a new library bond. This is where the $8,000,000 figure originally came from!

Time for me to add my personal opinion a bit. The pushing point for spending money on a new library was the fact that another bond was paid off and was now available for a new project. Personally I don’t agree with that mentality. Part of me is glad the city isn’t taking on new bonds without waiting for old bonds to be paid off, especially for projects such as this. But, at the same time I don’t see it as fiscally responsible to keep bond payments as high as they were for the YMCA project simply because the city has been making those payments anyways. At that rate this taxpayer dollars will hijacked to pay for bonds into infinity. What is to say that after the library is paid off that the city council won’t find another place they want to spend money. Personally I live on a street (N Kline) that could use some major repair, and I know many other streets in town that are in the same, or even worse, shape. Perhaps it would be a better use of taxpayer dollars to find a more conservative means of providing a library than building a nice shiny new building simply because the financing option has become available. That would leave more money to fix streets such as mine.

Design created and funding determined

The consulting company then used a “programming chart” to determine the needs of the facility and how to fit it within eight million dollars (actually according to McQuillen it was about $8.3 million). Based up on the output from the consulting company architectural firms were then asked to design a new building. The plan that was ultimately chosen is a building which meets the needs put forth by the consulting company and fits within the financial constraints.

The Foundation felt this plan was the best and challenged the city to build the project. At this time the Foundation already had $800,000 in the bank, and felt it could easily fund-raise another $1.2 million, giving them a total of $2,000,000 to help fund the new building. That would leave $6,000,000 for the City to fund. There was a fundraising feasibility study done to show the Foundation could easily get the additional funds. The city council agreed to bond the entire amount, and the Foundation agreed to pay its portion of the project as their money came in.

Time for my opinion again. I have been involved with non-profits in the past which have been burned by feasibility studies. I think it would have made some opponents of the project less nervous if the Foundation had proved it could actually raise money. Right now, if the Foundation is unable to actually raise the matching funds it promised, it appears that the missing dollars would have to come from the taxpayers. That has made some opponents very nervous.

Outdoor space

Layout of the new library. Photo provided on the website. Click to make bigger.

The new library includes an outdoor space. I specifically asked McQuillen about this space because it has been touted by many library bond proponents as an important feature. The building’s design calls for 800 sq ft of outdoor space to be used.

McQuillen stated much of the Science, Technology, Engineering and Math (STEM) programming currently done by the library requires the use of outdoor space. He noted the space provided will be covered and have outside reading areas included. This is part of a nationwide trend in libraries to get kids outside.

Here is an area I partially agree with McQuillen and other library bond proponents with. If a new facility is going to be built I do think a nice outside area would be an appropriate addition. But, I don’t see it as a reason in and of itself to build a new facility.

The Kitchen

The kitchen included in the plan was brought up by McQuillen because many opponents have asked whether it was necessary. The current library has food club classes that are apparently pretty popular. This proposed kitchen is not industrial, McQuillen made sure to point that out. Rather it is meant for basic home style cooking.

This is another area I partially agree on. If a new library is to be built I think it is valid to include. But I don’t see it as a reason to build a new library. There are already cooking classes that utilize the ARCC. I would imagine (but haven’t verified) that clubs could also utilize facilities within the ARCC.

Will the Foundation support other options

I asked McQuillen if he thought the Foundation would support other options if the library bond is shot down by the voters. Specifically I said using the ARCC, renovating the current building, or any other proposal. McQuillen didn’t see any reason the Foundation wouldn’t at least look at other options. At its core the Foundation was created to improve library services.

This is a question didn’t expect McQuillen to answer at all. His question was guarded, but at least he answered it. Right now the Foundation is pushing hard for this new library, but I do think there are opportunities to work with the Foundation on solutions going forward if the library bond is denied.

Lack of Upgrades

I asked McQuillen about the rumors that the library has purposely held off on upgrades to make it look like a new facility was necessary (I realize the library and Foundation are separate, but I wanted his take on this question). He believes that is outright false. Specifically he noted that until very recently the State of SD made contact with data providers. City libraries, such as the current Aberdeen Library, could then just pay the state and gain access to those providers. That system suddenly went away, and the library just now has been implementing a new system. He wanted to note this was being implemented now, and was not held off until a new facility was built.

Trying to be modern

McQuillen then mentioned that in my post about the library I identified myself as having a more traditional view of libraries. He believes that libraries mean something different today than it did in the past. Modern libraries are more about community togetherness and communications.

Maybe I’m too stuck in my old views of libraries. But I still don’t agree with Library Bond supporters in thinking that the library is about community. I feel libraries should be focused almost purely upon getting access to information. There are many other venues in the community available for togetherness.

Workforce Development and Quality of Life

McQuillen also sees the library as a workforce development tool. He notes that many large businesses in town have spoken in support of amenities such as a new library. They believe it will help the quality of life for employees and can be used as a workforce development tool. Projects such as the YMCA have proven popular and McQuillen believes the new library will have the same positive results.

I do agree that having a library does impact quality of life and workforce development in a town. But I would question whether having a new library will actually increase either area in a noticeable way. I believe this is an area where it is more of a matter of having a library or not.

Final Thoughts

I’ll end the post here. I did speak with McQuillen on a few more topics, and I may post about them if I find time. Even after speaking with McQuillen I just haven’t seen a reason that a new shiny library is needed.  I am still opposed to the Library Bond. I feel for a fraction of the cost the current building could be remodeled into a very functional and visually pleasing library.

PS. I would like to thank Troy McQuillen for being willing to speak with a blogger that is opposed to a project he is supporting. We bloggers are not always nice to people with opposing viewpoints and I respect him for the time he gave me.

Fantasy sports fate in SD still unclear, legislative battle coming?

Fantasy Football by © Keith Bruce via
Fantasy Football by © Keith Bruce via

Earlier this week I brought attention to the South Dakota Gaming Commission holding a hearing about the fate of fantasy sports in SD. The core of the issue is whether fantasy sports wagering is a game of skill or if it is a game of chance. Personally I know enough people who participate in fantasy sports to understand it is a game of skill (one that takes a LOT of time). There was a potential that the South Dakota Gaming Commission meeting yesterday could clear up some of the confusion. That didn’t happen.

The SD Gaming Commission has yet to post minutes from the meeting, but the Argus Leader posted the Associated Press account of the meeting. A lobbyist for the industry, Griffin Finan, went before the Commission to make the case that fantasy sports betting is not a game of simple chance. The AP report notes that the industry will likely seek legislative protection for the industry:

Finan said more than 25,000 South Dakota residents are estimated to participate in daily fantasy sports contests each year. The industry may pursue legislation in South Dakota that would clarify that fantasy sports is exempt from state gambling law and impose consumer protection measures on operators, he said.

That will definitely be legislation I will be track during the 2016 session!

It was actually a statement in the article from Governor Daugaard’s spokesman that sheds light on where opposition to such legislation will come from:

A spokeswoman for Gov. Dennis Daugaard said in a statement that the governor would “consider any legislation, but is very concerned about allowing gaming in South Dakota that is unregulated and that competes with gaming that generates state revenue.”

There are two problems I see with the above statement. First the belief that such enterprises in South Dakota are completely unregulated. The very word unregulated has no meaning in the currently over-regulated United States. There are a number of federal and state regulations that the fantasy sports wagering industry must comply with, especially in the realm of consumer protection. If there is fraudulent behavior with one of the players in the industry (such as insider trading) current consumer protection laws can be used.

Second, and more important, is the governor’s office being concerned about competing with the fantasy sports industry. That is the main obstacle I foresee for any legislation coming in 2016. The State of South Dakota makes a lot of money off gambling. In order to keep getting that money it is likely big government politicians will push to keep the states monopoly over gambling secure. Technically there are already games of change that are exempt from the current state gambling ban in South Dakota. But are the big government bureaucrats in Pierre willing to give up even a little more gambling money in order to allow people to spend their own money how they wish? That will likely be a big part of the upcoming battle.

The remarks from the Gaming Commission and the AG’s office in the AP report are pretty wishy-washy. They really aren’t taking a stand at this time. It will likely take legislation providing guidance for those groups to understand that people should be allowed to spend their money however they see fit.

A few random thoughts on whether SD should accept Syrian refugees

Evening traffic on Champs-Elysees in front of Arc de Triomphe (Paris, France) - © Can Stock Photo Inc. / samotrebizan
Evening traffic on Champs-Elysees in front of Arc de Triomphe (Paris, France) – © Can Stock Photo Inc. / samotrebizan

Syrian refugees are an obvious big topic right now due to the terrorist attacks in France. For the most part in South Dakota I’ve seen the issue split on party lines. Republican politicians in SD have spoken out against allowing Syrian refugees into South Dakota. Democrat politicians have actually been pretty quite, but I’ve seen Democrat groups within the state speak in favor of allowing refugees. And of course the Republican Governor has not joined the majority of Governor’s around the country that have decided they don’t want Syrian refugees.  In this post I won’t look in-depth into the issue or try to provide a solution. Instead I will just add a few random thoughts to the debate.

First, I have a pretty libertarian view of immigration as a whole. For the most part I believe in open borders and believe fixing the broken immigration system should be a top priority of Congress. Additionally I generally believe taking in refugees from war-torn countries is morally the right thing to do. Notice I used the word “generally” in the previous sentence. The situation we are currently in is much more complicated than the two big parties are making it out to be.

The reason I am hesitant in this situation is because of the massive potential security risk allowing these particular refugees would create. I am coming at this from the point of view of someone who HAS been through overseas deployments and knows first-hand some issues that were had with groups similar to ISIS purposely infiltrating refugee camps in order to punish those very refugees. Now granted, the situations I personally know of were targeted directly at punishing refugees that were seen as traitors. But it is not hard to imagine the same processes used could be used to get further through the refugee program in order to punish countries that are taking in refugees. To me this isn’t a debate over whose statistics are better or who feels they have the higher moral ground. Instead I am looking at past experiences and believe that as a country the United States should proceed very cautiously.

Another thing to consider is how well the Obama administration will screen the refugees brought into the United States. Normally I would say taking in refugees is a good thing. But the current administration has proven even more efficient than his predecessor (GW Bush) at killing people in the Mid East, especially civilians. Believe it or not I tend to think that having family and friends killed by an unmanned drone tends to piss people off and make them hate America. If Obama keeps his war-hawk ways going and aims full-force at Syria it can be expected that some of those refugees will also start to gain resentment towards the US as their friends and family are killed. Is it possible at that point to screen out people who will get pissed off in the future because the United States continues to kill their countrymen in what could end up being a thirty-year war? I can’t imagine anyone coming up with a screening system that could account for such factors.

Finally I want to touch on whether the governors should accept refugees into the State. Yes, as many Democrats have pointed out, immigration is a Federal issue. In reality it is unlikely the States can stop refugees from being placed in their states. But that doesn’t mean the states simply need to sit back and take refugees without a fight. One thing state governors can do is publicly support or reject refugees. Now that a majority of the states have governors opposing refugees it might be time for the Obama administration to sit back and come up with a better strategy. If Obama were to simply roll ahead with his plan without acknowledging what the majority of the states want I fear bad backlash in Congress. Right now there is a Republican majority in Congress. I can foresee legislation coming that will further erode the broken immigration system just so Congress can keep a tighter reign on what the Obama administration is doing. That would be bad and would distract Congress from actually working on an immigration solution that works.

I think I’ll end this post here. Like I said at the beginning of this post I am pretty much an open borders type of person. Yet at the same time I have reservations about letting Syrian refugees in under the current immigration system and especially under the current executive administration (GW would have been equally as bad). This is a tough one to be sure. My heart says to allow the refugees, while my head says keep them out. Perhaps in the future politics of the two big parties will mature to a point where they can realize issues such as this are not as simple as their talking points make it seem.

So should SD accept refugees? That is a damn good question…

PS. My deployments happened under the “peacetime” President Clinton. The more things change, the more they stay the same…

Tribal Economic Development Task Force update, AG’s office talked about hemp

On Friday, November 20, the Tribal Economic Development Task Force for South Dakota will meet in Pierre. The last meeting was held on October 30th. Prior to that meeting I did a post about the Task Force, and particularly about possible hemp legislation. That came up as a topic again during the October 30th meeting.

The agenda for the November meeting can be found here (there really isn’t much to it). The press release for this meeting doesn’t really add much insight into what will be discussed at this meeting:

The Task Force is chaired by Representative Don Haggar (Sioux Falls) and will focus primarily on committee discussion. The committee will hear public testimony in the late morning.

October 30 meeting

Looking at the minutes from the October meeting there are a couple of items I would say are interesting.

Section 184 Loans

Juel Burnette of First Tribal Lending gave a presentation during the meeting to discuss homeownership lending issues in tribal communities. There are three tribes 1st Tribal Lending has worked with in to provide housing on tribal trust lands using a HUD Section 184 Home Loan.

Here is what the HUD website has to say about Section 184 loans:

The Section 184 Indian Home Loan Guarantee Program is a home mortgage specifically designed for American Indian and Alaska Native families, Alaska Villages, Tribes, or Tribally Designated Housing Entities. Section 184 loans can be used, both on and off native lands, for new construction, rehabilitation, purchase of an existing home, or refinance.

Burnette laid out some of the challenges encountered such as “appraiser issues due to lack of comparable sales, lack of capital due to few major employers on the reservations, lease terms, and credit issues.” As I’ve traveled the state I’ve heard many tribal members that choose to remain on tribal lands mention a lack of employment. The tribes are going to have to figure something out to be sure.


The South Dakota Attorney General’s office was present at the meeting. To represent the AG’s office were Charlie McGuigan, Chief Deputy Attorney General, and Kirsten Jasper, Appellate Division. Jasper is involved with tribal jurisdictional issues.The AG’s Office was also in the State-Tribal relations meeting that happened just two days before this one. It was during that meeting that the Flandreau Santee Sioux Tribe’s (FSST) recreational pot lounge was a topic. It was also at that meeting that the AG’s office would not guarantee law enforcement would leave customers of the lounge alone.

Rep Mike Verchio on the SD House floor. Photo by Ken Santema 02/24/15
Rep Mike Verchio on the SD House floor. Photo by Ken Santema 02/24/15

McGuigan noted that some months ago Rep Mike Verchio (R, Dist 30) had asked what the AG’s office policy would be if a hemp bill came forward in the legislature.  AG Marty Jackley is apparently open to the concept and would be willing to look at such legislation. But (isn’t there always a but), according to McGuigian it would be one of Jackley’s criteria that:

Any hemp bill would also require that the hemp have a very low to negligible to zero THC level.

McGuigan noted that Verchio’s hemp bill (which this committee still has not made available in the online docs!) includes a provision for federal max THC (he believes it is 3/10 of 1%). He didn’t say if Jackley found that criteria acceptable.

McGuigan then tried many talking points that seemed to be trying to convince the committee that legalizing hemp would be bad. He tried to talk about problems ND has had. McGuigan then noted many federal regulations would have to be met (as opposed to the many other areas of life where the feds over-regulate?).  Of course McGuigan mentioned the DEA going after the Menominee Indian Tribe for hemp. He also mentioned the problems a producer has been having down in Pine Ridge, where an ordinance makes hemp legal.

Rep Verchio did note that if it looks like the fed government would come down on hemp producers he would not even bring a bill forward. He does not want to see the federal government come in and destroy crops; which is what happened to the producer down in Pine Ridge. Verchio noted his interest with hemp has to do with economic development, especially for the tribes. It is not just the growing of hemp, but all the manufacturing and marketing industries that can grow around the production of hemp. He doesn’t see hemp production as a “silver bullet” fix, but it would be one of many possible economic development ideas to present to the tribes.

During committee discussion of hemp Rep Elizabeth May (R, Dist 27) did have to bud in to remind everyone that hemp plants and marijuana plants are not the same thing. I understand why she got involved with that part of the discussion. It appeared there was some misconception that since marijuana is generally harvested sooner in its plant life and hemp later in its plant life that both are basically the same. That simply isn’t true.

I truly hope Verchio isn’t scared away from bringing forth a hemp bill in the 2016 session.  May came in to calm some of those fears. But with so much fear of the federal government in the committee I’m not sure any fears were truly calmed.

A list of the fall SD executive appointments and reappointments

I was reading the SD register that came out on Monday and noticed the list of fall Executive appointments is out. All but two of these are reappointments, and I’ve listed those at the end of this post. But first it is worth calling out the two new appointments.


Steve Hickey on the SD House floor. Photo by Ken Santema 02/10/15.
Steve Hickey on the SD House floor. Photo by Ken Santema 02/10/15.

Wayne Steinhauer, District 9, was appointed on November 12, 2015, to the South Dakota House, to fill the vacancy created by the resignation of Representative Steve Hickey, effective immediately.

Governor Daugaard’s staff announced this appointment back on November 12. I will admit I know very little about Steinhauer or how he will fill the shoes of such an interesting legislator such as Hickey. But the press release does show he has some political and business experience:

Steinhauer is the outgoing chairman of the Minnehaha County Planning Commission, on which he has served for 14 years. He retired last year as chief operations officer of Amesbury, after a 30 year career in business. He also owns and operates the Best Western Hotel in Murdo.

My list of SD State Legislators has been updated to include Steinhauer. A big part of me wonders if the non-stop legislative vacancies will stop. It almost feels like Daugaard has chosen more of the legislature than voters have..

Ann Noyes, Pierre, was appointed on October 30, 2015, to the South Dakota Professional Teachers Practices and Standards Commission, to replace Dr. Michael Amolins, effective immediately and shall continue until December 31, 2015. I found this one odd because it expires at the end of the year.

According to the commissions minutes from June 24, Dr Amolins resignation was accepted and would be effective July 1, 2015. Anne Noyes does show up present in the November 12 meeting minutes, which was the next meeting after being appointed.

When looking into Anne I found this video from the SD Dept of Ed for her being a candidate for 2015 Teacher of the Year:

She did not win Teacher of the Year, but did get appointed to the South Dakota Professional Teachers Practices and Standards Commission (I’m not sure if that is considered a win or not). The actual winner of the 2015 Teacher of the Year was Allen Hogie of Brandon Valley High School. 


Paul Christen, Huron, was reappointed on October 30, 2015, to the State Banking Commission, effective immediately and shall continue until October 30, 2018.

Sheldon E. Cotton, Volga, was reappointed on October 30, 2015, to the South Dakota State Railroad Board, effective immediately and shall continue until October 30, 2018.

Gary Doering, Cavour, was reappointed on October 30, 2015, to the South Dakota State Railroad Board, effective immediately and shall continue until October 30, 2018.

Mark Gross, Sioux Falls, was reappointed on October 30, 2015, to the Board of Directors of the Value Added Finance Authority, effective immediately and shall continue until October 30, 2018.

Marcia Hendrickson, Chancellor, was reappointed on October 30, 2015, to the Board of Directors of the Value Added Finance Authority, effective immediately and shall continue until October 30, 2018.

Todd W. Herrboldt, Harrisburg, was reappointed on October 30, 2015, to the Board of Social Work Examiners, effective immediately and shall continue until October 30, 2018.

Robert Hull, Sisseton, was reappointed on October 30, 2015, to the Board of Directors of the Value Added Finance Authority, effective immediately and shall continue until October 30, 2018.

Eric J. Iversen, White River, was reappointed on October 30, 2015, to the Animal Industry Board, effective immediately and shall continue until October 30, 2018.

Douglas K. Ode, Brandon, was reappointed on October 30, 2015, to the American Dairy Association of South Dakota, effective immediately and shall continue until October 30, 2018.

Eric J. Odenbach, Eureka, was reappointed on October 30, 2015, to the South Dakota Aeronautics Commission, effective immediately and shall continue until October 30, 2018

Linda Peitz, Yankton, was reappointed on October 30, 2015, to the Board of Addiction and Prevention Professionals, effective immediately and shall continue until October 30, 2018.

David S. Pummel, Belle Fourche, was reappointed on October 30, 2015, to the South Dakota Board of Accountancy, effective immediately and shall continue until October 30, 2018.

Karen S. Wiemers, Chamberlain, was reappointed on October 30, 2015, to the Board of Examiners of Psychologist, effective immediately and shall continue until October 30, 2018.

William A. Aeschlimann, Hurley, was reappointed on November 9, 2015, to the Animal Industry Board, effective immediately and shall continue until October 30, 2018.

Charles K. Jepson, Fort Pierre, was reappointed on November 9, 2015, to the Board of Directors of the Value Added Finance Authority, effective immediately and shall continue until October 30, 2018.

Jody Kuper, Milbank, was reappointed on November 9, 2015, to the American Dairy Association of South Dakota, effective immediately and shall continue until October 30, 2017.

A chat with PUC Chris Nelson at the Brown County Fair

Chris Nelson (center) at the 2015 Brown County Fair. Photo by Ken Santema 08/14/15.
Chris Nelson (center) at the 2015 Brown County Fair. Photo by Ken Santema 08/14/15.

During the 2015 Brown County Fair I had the opportunity to sit down with Public Utilities Commissioner (PUC) Chris Nelson. In 2016 Nelson is up for re-election as a PUC. He was first appointed to PUC in 2011 and was then elected to serve out the last four years of a six-year term in 2012. He also happens to have been the Secretary of State previous to Jason Gant. The conversation I had with Nelson was laid back, more of a chat than an interview. In this post I will pass on some of what Nelson had to about his current tenure as a PUC, and a brief look at the overseas voting system while he was Secretary of State.

The first thing I spoke with Chris Nelson about is whether he actually intends to run for another PUC term. He said any official announcement would wait for the spring. But at this point Nelson says he loves what he is doing and would certainly love to run again. Nelson also noted that he has received a lot of good feedback from voters about the job he is doing as PUC. Actually he said the main reason he likes being a PUC is because of the challenge that comes from so many areas that the PUC deals with.

When talking about the PUC Nelson said the commission “essentially  function as a judicial body”.  Nelson explained that the commission cannot set policy (like legislators) on the many issues and cases that come in front of the commission. Instead he says the commission acts in a judicial function. As a PUC, Nelson says his job is to look at the facts and laws concerning a matter that comes before the commission and make decisions objectively. He believes he has been a good PUC because of his ability to be objective and not act upon “political whim”.

I asked Nelson what he is most proud of during his time as PUC (aside from being objective). Nelson stated he has worked hard with the telecommunications industry to expand broadband within the State of South Dakota. He noted that some portions of the state have “world-class broadband access”, while some more rural areas have no broadband access at all. Because agriculture is big business he sees broadband as critical for rural access because modern businesses rely so heavily upon the internet.

Going on, I asked Nelson about grain warehousing in South Dakota. This stems from HB 1039 (SoDakLiberty Posts), which was a law passed this year that revised certain provisions related to the regulation of grain buyers and grain warehouses. What I was really interested in was why this was a PUC matter. Nelson explained that the PUC licenses grain buyers and grain warehouses and HB 1039 was the PUC updating the licensing process. He noted that going back to statehood the PUC was known as the Board of Railroad Commissioners. Since railroads and farm elevators (warehouses) were tied so closely together it fell upon the Commission to regulate grain warehousing. Nelson said that at some point the commission was renamed to the Public Utilities Commission [1939]; and that railroads went over to the Department of Transportation for regulation [1981]. Nelson also noted  that around eight years ago there was a review process to decide whether the PUC should continue handling grain warehousing, or if it should fall under the Department of Agriculture. It was decided at that time by the industry that since the current system under the PUC was working well that it shouldn’t be changed. According to Nelson the main function of the PUC with grain warehousing it to make sure the farmers get paid for the grain they deliver.

** For anyone interested I found a book on the PUC website that has a history of the SD Public Utilities Commission up to 2001. It is from that book I inserted the dates above. I still find it an odd fit for the PUC to be in control of grain warehousing though…

Then I moved the discussion on to the Secretary of State’s office. In particular I wanted to talk about the military voting computer system Nelson’s administration had implemented. For the back story on this question see my June 27 post about military voting systems in SD. Nelson mentioned his office had implemented UOCAVA to comply with federal law to get electronic ballots to folks overseas. From his experience the system worked very well. When Nelson left the SOS office he said the system was working well and was a quite cost-effective solution. Additionally it met the federal requirement that all overseas voters, not just active military, could utilize the system.

Chris Nelson then gave a high overview of how the UOCAVA system worked:

  • An overseas person could apply for a ballot whenever they wanted to using UOCAVA.
  • When an absentee ballot became available the UOCAVA system would send that person an electronic PDF of their ballot. Since the UOCAVA was tied into the voter registration system, UOCAVA knew which ballot to send.
  • The person could then print out the ballot, fill it out, and send it back via mail.

The above process met every requirement of the federal law and from Nelson’s experience worked quite well.

Chris Nelson and I spoke on a number of other issues. But I think this gives enough information about Nelson to understand a thing or two about him. I did ask about Keystone XL, but he was not able to speak with me about an active case (at the time of this chat it was still going through hearings). He did however walk me through the process used for KXL hearings; that in itself is probably good for another blog post.

South Dakota being sued over SBAC in the battle against Common Core

Common Core new math © Gregory Johnston |
Common Core new math © Gregory Johnston |

The State of South Dakota is being sued by two SD taxpayers, Shelli Grinager and Amber Mauricio, for the state’s entry into the Smarter Balanced Assessment Consortium (SBAC). Thomas More Law Center (TMLC), a firm out of MI, filed the lawsuit in Hughes County on November 10, 2015. The complaint filed can be read here; and the press release from TMLC can be read here. This lawsuit is great news for South Dakotan’s that have been fighting the battle against Common Core in the state.

The defendants listed in the complaint are:

  • DENNIS M. DAUGAARD, in his official capacity as the Governor of the State of South Dakota
  • DR. MELODY SCHOPP, in her official capacity as the Secretary of the South Dakota Department of Education
  • RICHARD L. SATTGAST, in his official capacity as South Dakota State Treasurer

There are three paragraphs in the nature of the action portion of the complaint. First there is the core of the case: South Dakota’s entry into the SBAC is an “illegal interstate compact”.

1. This case presents a taxpayer challenge to the disbursement of South Dakota funds to the Smarter Balanced Assessment Consortium (“SBAC”), an illegal interstate compact not authorized by the United States Congress, whose existence and operation violate Article I, § 10, cl. 3 of the United States Constitution and other provisions of federal and state law.

Article I, § 10, cl. 3 says this:

No state shall, without the consent of Congress, lay any duty of tonnage, keep troops, or ships of war in time of peace, enter into any agreement or compact with another state, or with a foreign power, or engage in war, unless actually invaded, or in such imminent danger as will not admit of delay.

Actually I hope this is accepted by the courts, and not just in the battle against Common Core. There are a number of compacts the state has entered that costs the taxpayers a lot of money and do little more than expand bureaucracies and the regulation state.

Second in the nature of the action section is important because it establishes that the taxpayers in South Dakota are on the hook financially to support this illegal interstate compact:

2. Since 2010, South Dakota state officials have engaged in a course of conduct that would cede a portion of South Dakota’s sovereignty over educational policy within its borders to SBAC, an interstate consortium operating under the influence of federal regulators located in Washington, D.C. Congress never sanctioned the interstate compact that created this consortium. As a result, South Dakota is poised to contribute hundreds of thousands of dollars of taxpayer funds during Fiscal Years 2015 and 2016 to support this illegal interstate compact.

Actually the above paragraph sums up quite well the reasons that many oppose Common Core. By entering into Common Core the State of South Dakota has chosen to give up local control over public education. The SD State Constitution tasks the state legislature with providing public education. By entering into Common Core and SBAC,  the SD Dept of Ed has to a large extent decided that federal regulators know better how to educate South Dakotan children than people within the state can. Not only that, but the taxpayers of South Dakota have to pay for allowing federal regulators to intervene in South Dakota’s public education.

And finally in the nature of the action:

Plaintiffs, as South Dakota taxpayers, will suffer irreparable harm if such taxpayer funds are disbursed before these controversies are resolved by the Court.

I would think this last point is timely since the Blue Ribbon Task Force is recommending a massive sales tax increase in 2016 to raise teacher pay. Perhaps instead of pouring taxpayer dollars into implementing the massive social experiment called Common Core (including SBAC), the state should be using its taxpayer dollars in a more conservative manner that will increase the pay of teachers and provide those same teachers the tools necessary to teach the children of South Dakota.

Thus far I have only skimmed the rest of the complaint. After I read more there will likely be addition posts about the lawsuit. Hopefully this lawsuit will force South Dakota to what is best for the youth of the state, instead of what is best for bureaucrats that love to play with statistics about students.

Fantasy sports fate in SD to be reviewed by the South Dakota Gaming Commission

Fantasy Football by © Keith Bruce via
Fantasy Football – © Keith Bruce via

On Friday, November 13, South Dakota Attorney General Marty Jackley sent out a statement on fantasy sports wagering.  This is a topic that has gained a lot of national attention recently. The quickly growing fantasy sports industry has gone from being seasonal to becoming a form of skilled entertainment that players can enjoy and make daily wagers. This has left many bureaucrats to call for swift overreaching regulations or outright banning of the fantasy sports wagering industry.

Before looking at Jackley’s press release it is worth noting a few recent events that have occurred in the realm of fantasy sports wagering:

Now back to SD AG Jackley. His press release includes his summary of South Dakota laws that are relevant to the discussion. First he pointed to Article III, § 25 of the SD State Constitution. This portion of the state constitution prohibits games of change in South Dakota, and provides a few exceptions that the legislature can make legal in Deadwood (and on the reservations due to the gaming compacts).

Even though the state constitution has outlawed games of chance (with a few exceptions) that doesn’t mean fantasy sports wagering is outlawed. Jackley notes that

The South Dakota Legislature has enacted a general criminal prohibition against gaming where anything of value is wagered.  See SDCL Ch. 22-25.  It has traditionally been the position of the South Dakota Attorney General’s Office that pursuant to South Dakota law, games of skill are exempted from the state law prohibition.  In 2000, the Legislature enacted laws that specifically prohibit using the internet to accept or pay wagers at any location within the State.  See SDCL Ch. 22-25A.

So the big question is whether fantasy sports wagering is a game of chance or a game of skill. Those who participate in fantasy sports wagering say it is a game of skill, and one that takes a lot of time and research to properly play. Simply calling fantasy sports wagering a game of change fails to acknowledge the pure challenge that people participating in the wagering experience.

The South Dakota Gaming Commission will have a meeting on November 18 in Deadwood. The agenda includes the following item:

Review of Daily Fantasy Sports Betting in Light of SDCL Chapter 22-25A

Since SDCL Ch. 22-25A deals with the prohibition of Internet gambling I would assume the AG and Gaming Commission are looking for ways to show fantasy sports wagering is not legal in South Dakota. Hopefully that won’t be the case. As I said above fantasy sports is not a game of pure chance. There is a lot of skill and research involved for those that participate in fantasy sports. Hopefully the Gaming Commission will understand a wrong decision could instantly make hundreds of law abiding South Dakota citizens into criminals facing possible felony charges.

Executive Board meeting on Monday, Nov 16

SD House Votes display. Apparently I never took a pic of the other display. Photo by Ken Santema
SD House Votes display. Apparently I never took a pic of the other display. Photo by Ken Santema

On Monday, November 16, the SD Legislative Executive Board will meet in Pierre. At the end of the meeting the board will adjourn and gavel back in as the Bonding Committee. The Executive Board agenda can be viewed here and the Bonding Committee agenda can be viewed here.

Here are some areas of interest going into the meetings:

New House Display Screen Demo (House Chambers)

I’ve heard this item come up a few times in committee meetings this interim session. At the Aug 24 Exec meeting it was reported the display was installed, but there was some work to be done for it to be fully functional. By this time it should be ready to go.

Back in April 27 the Exec committee approved the new display for the House. It was chosen not to get a display for the Senate, but that is an option for the future. The new display for the House, along with new voting software, is supposed to “provide more accurate information more quickly to the Legislators and to the general public using the internet. ” Personally I’m looking forward to seeing how that will assist what I do as a blogger during the 2016 legislative session.

Legislative Ethics Seminar

Rep Lee Schoenbeck (R, Dist 5) will give a report on a recent ethics presentation he attended in Minneapolis. Bob Mercer has a story on Schoenbeck giving his presentation to the board. I think it is great when I see a legislator sharing knowledge gained at seminars, especially on such an important topic…

Interim Committee Reports

This is probably the main reason I will be listening to this meeting. I have mostly kept up with other committees, but this will hopefully provide a good summary of what has transpired during the legislative summer vacation.

Bonding Reports

The Bonding Committee will receive annual reports on the following bonds:

  • South Dakota Housing Development Authority
  • South Dakota Conservancy District
  • South Dakota Value Added Finance Authority
  • South Dakota Economic Development Finance Authority
  • South Dakota Building Authority
  • South Dakota Health and Educational Facilities Authority

South Dakota political blogging from a libertarian-leaning individual

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