Evidence of the Governor's Short-Sighted Focus on Businesses Over Education

It is legislative season and it seems that the only thing colder than the weather is Governor Daugaard's feelings toward education.  We know that the Governor loves to talk a good game during election year when it comes to education, but unless he has a serious opponent, you can't expect Daugaard to support education.  No one should believe him when he claims that he is a supporter of our children's education.

South Dakota legislators will need to decide what to do with a huge windfall of funds.  The governor wants to pre-pay $30 million of the unclaimed funds into Building South Dakota.

Now Gov. Daugaard is suggesting legislators consider a new arrangement in the 2014 legislative session. He wants to use $30 million from the unexpectedly large pot of money to “pre-pay” three years of Building South Dakota, or BSD. 

The $30 million is significantly less than the BSD fund would receive otherwise under the law passed last year: Approximately $30 million this year and approximately $35 million each year thereafter. 

Right now there isn’t sufficient demand to use all of that money for economic development and related programs under the BSD umbrella. If legislators accept the deal, the big unknown is what happens when the governor’s $30 million “pre-pay” is gone.

This has many legislatures frustrated and a bit confused as to why the Governor would want to mess with a true bi-partisan law that created the law for Building South Dakota.  Bernie Hunhoff, Democratic Minority Leader in the House, shared his concern on Facebook after Daugaard's announcement:

Some good, some bad in the governor's proposed budget. Finally, an acknowledgment that we need to help schools dig out of the hole caused by 2010 cuts. And paying off debt with one-time dollars to create more ongoing revenue for basic responsibilities like health care and education make sense to me. The bad? I hope we're not already going to mess with the Building South Dakota program that was just agreed to last session. And it's a travesty not to expand Medicaid.

So what seems to be Daugaard's problem with the law?  The fact that it has triggers that would avoid his being able to cut education funding again.

“The Governor's main concern with the funding of BSD last year was that it include a trigger so that funding would be available to fund K-12 at the statutory level, and Medicaid and state salary policy at that same level, before funding BSD. That proposal was included in the final bill,” Venhuizen said. 

It seems that his priorities are set: funding for businesses comes first and funding for education should take a distant back seat.   

One area that the funds could be used is supporting need based aid.  In March South Dakota started funding for need-based aid for students attending post secondary education (last ones to do it in the nation), but those funds were underfunded.  (SURPRISE)

In March, when South Dakota became the last state in the country to offer need-based assistance for postsecondary education, lawmakers appropriated $1.5 million as the principal seed money for the program, and another $200,000 one time to show the effect it would have in this current academic year. 

That $200,000 was predicted to produce 800 to 1,000 scholarships ranging from $500 to $2,000. But unless legislators approve more one-time dollars to get back to that $200,000 level next year, it will have only the interest earned on the market value of the $1.5 million investment to pay for the grants. 

And because the law allows only 4 percent of interest earned to be used for scholarships — any additional interest is to be used to grow the market value of the investment — that means the state probably will see only $60,000 to $75,000 annually in the next few years.

A little bit of investment can really help some students and therefor improve the future of our state.

It also could see higher returns if the Legislature invests more in the principal. Turman expects the South Dakota Student Federation will lobby for such a move this next legislative session. D.J. Smith, executive director of the federation, said the governor hasn't devoted any more for the needs-based scholarship in his preliminary budget. 

Meanwhile, the state required the 18 institutions receiving need-based dollars to match them at a 3-to-1 level. In USD's case, that means it had to provide $86,373 to students based on financial need this school year to get the $28,791. Pier said USD paid that $28,000-plus out almost entirely in $1,000 scholarships. 

 Support for education in South Dakota or making sure big businesses can get more breaks: We know where the Governor stands.