Crossover Day roundup: House supporting big changes to South Dakota checkbook

Feb. 23—PIERRE, S.D. — By the end of Crossover Day on Wednesday, Feb. 22, the final day for most of the 450 bills to get through at least one chamber — hence the "crossing" of the South Dakota State Capitol — House lawmakers had painted a more clear picture of their taxing and spending priorities entering the final stretch of the session.

Headlining the day in the House were two successful votes that, were they to make it into law, would be significant changes to the state's taxing and spending priorities.

First came the largest tax cut in state history: a $100 million cut bringing the overall state sales tax to 4.2%, three cents lower than the current 4.5% rate.

House Bill 1137,

advanced by Rep. Chris Karr, of Sioux Falls, also repeals the "Partridge Amendment," an addendum to the 2016 half-cent sales tax increase that promised to lower the rate when the state began taking in revenue from taxing online sales, a power South Dakota and other states gained in 2018.

But technicalities in the amendment — mainly that the largest online sellers like Amazon and Walmart were not counted as online sales in the amendment due to physical locations in the state — made it ineffective. The three-cent cut was a fulfillment of the "promise" of the Partridge Amendment, Karr said.

"It was a hard-fought battle to get that half-cent [increase] passed. The one thing I want everyone to remember is the Partridge Amendment was there to get the votes," Rep. Liz May, of Kyle, said during floor debate. "It was a promise to the taxpayers of South Dakota that when we reached a certain revenue, we were going to roll that back. And I've been here long enough to know that does happen often. We have a unique opportunity."

Passing the House on an overwhelming 66-3 vote, the bill appears to have legs in an often more cautious Senate.

"I will tell you that the appropriators have convinced me that some version of [a tax cut] is possible," Sen. Lee Schoenbeck, of Watertown, told reporters at a Thursday press conference.

Next was a law to increase to 100% the rates paid by the state for

Medicaid costs incurred by providers

like nursing homes, substance abuse treatment centers and disability support providers, among others. Currently, these providers are paid only about 75-80% of their costs, which are determined by the Center for Medicaid Services.

An increase to 100% from the current rate would cost in the realm of $54 million this coming year — $22 million to get providers to 90%, which was already

part of the governor's recommended budget,

and another $32 million to get from 90% to 100%.

Also advanced by Karr,

House Bill 1167

passed through the body 44-25, buttressed by arguments that these providers — which take on state duties like caring for the elderly and disabled — are the core responsibility of state government.

"That's what this body needs to be committed to doing going forward," Karr said. "Year after year after year."

Several lawmakers criticized the structural under-funding of these obligations, a choice they say has led to widespread

nursing home closures

and difficulties in meeting the needs for those eligible for disability programs like

Family Support 360.

"Why are we even entertaining the idea that the only way of building a balanced budget has to come at the expense of our state's most challenged and vulnerable people?" Rep. Brian Mulder, of Sioux Falls, said during floor debate.

In a Thursday morning press conference, Senate Republican leadership — Schoenbeck and Majority Leader Casey Crabtree, of Madison — indicated that, while some sort of tax cut has the support of the caucus, the idea of at the same time increasing state spending in perpetuity would have to be discussed further.

"We don't need the bill that came through yesterday to get to 100% methodology rate on Medicaid this year. We can already do that [through appropriations]," House Majority Leader Will Mortenson, of Pierre, said during the press conference. "I voted no on it. In Washington, D.C., they do budgeting by cutting taxes and increasing spending on all kinds of things, mostly on entitlements."

Should Karr's bill get sidelined in the Senate, leadership mentioned the likelihood of a summer study looking at parts of the public-private Medicaid provider system in the state.

"I know on our side there is a desire to study the issue over the summer and also come up with a different vision for what long-term care looks like in South Dakota," Crabtree said. "The model itself has to change. It's not going to work for us going forward."

Outside of taxing and spending, a

proposal

that would likely make it more difficult for certain initiated ballot measures and amendments to break through the petition stage passed the South Dakota House of Representatives 47-22.

"As somebody that's in the middle of the state, I love this idea," Rep. Liz May, of Kyle,

House Bill 1200's

prime sponsor, said.

The bill would require that an equal number of needed signatures come from each of the state's 35 legislative districts. This year, that would mean about 500 signatures from each district for initiated measures, which change state law, and 1,000 from each for initiated amendments, which alter the constitution.

Some opponents pointed out that the change would come with some serious administrative burdens in the secretary of state's office, which might have to increase its sample signature pool to make sure each district hits the required mark.

"I understand what we're trying to do. But remember that when the measure is on the ballot every South Dakotan has a voice," said Rep. Linda Duba, a Democrat from Sioux Falls. "We're trying to restrict how to put something on the ballot, making it more difficult and more labor intensive for whoever is working to validate these."

Despite the threat of overwhelming the secretary of state's office and potentially becoming another entry in a line of lawsuits that has seen parts of the state's petition process

struck down

as violating the First Amendment, lawmakers felt the change would help make ballot referenda more reflective of statewide interest rather than simply banking on strong petition drives in urban areas.

"I think we're getting caught up in the weeds here," Rep. Bethany Soye, of Sioux Falls, said, reminding lawmakers that the point of the bill was to change the current practice of petitioners "standing on a corner in Sioux Falls" to reach the required signature haul.

A bill providing funding to create a "Center for American Exceptionalism" at Black Hills State University, which houses South Dakota's largest teacher preparation program, died in the South Dakota House by a 46-23 vote, just one vote shy of the 47 needed for a two-thirds majority, the hurdle required for spending bills.

After the bill failed early on in the day's docket, a motion for reconsideration from Rep. Scott Odenbach, of Spearfish, the prime sponsor of the legislation, made the body resume debate on the bill again at the end of the Crossover calendar.

Despite Odenbach saying he felt he had moved some votes in the two hours between considerations, the screen sitting above the House chambers once again displayed a 46-23 vote.

The center, proposed by

House Bill 1070,

would focus on curriculum development from kindergarten through the collegiate level, which bodies like local school boards would be able to adopt if they so choose.

Odenbach said the genesis of the bill came from the feeling that schools in the state were failing to instill an active appreciation of civic duty in students.

Toward that end, the bill would send a one-time payment of $150,000 to Black Hills State University to stand up the center, either by bringing on one or two full-time positions or expanding the duties of existing staff. The House Appropriations Committee advanced the proposal to the floor by an 8-1 vote last week.

"It's a small investment in the civic engagement of our students that can pay big dividends in the future," Odenbach said.

Despite testimony from Rep. Tony Venhuizen, of Sioux Falls, bringing in historical context such as the importance of American education in winning the Cold War, a set of crisscrossing concerns such as the inadequacy of funding, the near-certainty of an increasing need for dollars down the road and the potentially unclear vision for the center and the relative powers of its advisory board, tanked the bill.

* A

proposal

to add South Dakota teachers involved in the Head Start program, a federal pre-kindergarten initiative, to the tuition benefit offered to teachers looking to earn certain credentials at in-state schools passed the Senate by a vote of 19-15. Currently, only elementary and secondary school teachers are eligible.

* Staying alive is the possibility of

electing members of the State Brand Board;

despite concerns that electing the committee might do away with institutional knowledge and give votes to people with tenuous connections to the cattle industry, the proposal moved out of the House by a vote of

* A

mechanism

to prepare South Dakota for the costly implementation of Medicaid, which could cost some $70 million each year once federal incentives run dry after two years, passed the Senate. The fund would collect the state's savings during these first two years and hold them for rising costs.

* A

proposal

to slightly relax the state's drug ingestion laws, changing the first and second ingestion offense from a felony to a Class 1 misdemeanor, failed in the Senate on an 18-17 vote.

* Several onlookers said this Crossover Day was among the shortest in legislative history, with the Senate out the door around 4:30 and the House done with their business about an hour later. The quick pace may have been, in part, a birthday gift to House Speaker Hugh Bartels, who celebrated his 70th birthday on Crossover Day, with cake served in the Speaker's lobby following the day's schedule.

Jason Harward is a

Report for America

corps reporter who writes about state politics in South Dakota. Contact him at

605-301-0496

or

jharward@forumcomm.com.