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Lawmakers went after representatives from the governor’s office over the fund, which the governor controls, but a legislative committee on Thursday at the Capitol in Pierre rejected a bill that would have cut money flowing into the fund.
The theme was the Future Fund, which receives its income from taxes on employers.
Sen. Brent Hoffman (R-Hartford) invoice.
“It’s not the government’s role to be Santa Claus in these economic development projects,” Hoffman said.
However, the Senate Commerce and Energy Committee rejected the bill in a 5-4 vote.
Employers in South Dakota pay into the Future Fund when they file payroll taxes for unemployment benefits. Unemployment tax is calculated using complex formulas This includes a percentage of the first $15,000 of annual income for some employees.future fund Receive an additional percentage share On top of that, the state calls this an “investment fee.”
State law says the Future Fund must be used for “purposes related to state research and economic development.” Unlike other funds administered by the Governor’s Office of Economic Development, Future Fund spending is not reviewed or approved by a citizen-appointed committee.
Questions remain about rodeo contract
South Dakota Searchlight recently reported That the Governor’s Office used this fund last year to: 3-year contract worth up to $2.5 million with rodeo announcer Laurie Remmel’s Dean Entertainment Group. This agreement pertains to the promotion and implementation of the Cinch She Playoffs Governors Cup Rodeo held in Sioux Falls. The contract stated that Sioux Falls would contribute additional matching funds.
Gov. Kristi Noem took center stage at September’s rodeo, carrying the American flag into the arena on horseback and posing for photos with the event’s winners.
Chris Silken, director of the Governor’s Office of Economic Development, testified in opposition to the investment fee reduction bill. Sen. Lee Schoenbeck (R-Watertown), referring to the Searchlight article, asked Mr. Silken, “Why would your office approve spending $2.5 million on a rodeo?”
Silken continued to defend the spending, saying, “Tourism is economic development,” noting the rodeo’s economic impact on Sioux Falls and the state.
Schoenbeck further criticized the cost, asking: “How many more economic development dollars are we going to spend on tourism events like that?”
Silken responded that rodeo is the state’s sport and said the event promotes the state well.
Schoenbeck replied, “My question is, how many more times are we going to do this with our money?”
“Senator, I don’t have a specific answer to that question,” Silken said. “This fund was established at the discretion of the governor for use by past governors and for use by future governors.”
Schoenbeck also asked why the rodeo contracts were not initially available on the state’s financial disclosure website, Open.SD.gov, when South Dakota Searchlight looked for them.
Silken said the department eventually posted the contract on its website. It happened after South Dakota Searchlight asked the office for its location.
Future fund amount
The lead sponsor of the investment fee reduction bill was Sen. Ryan Maher (R-Is.).
“This will result in savings for businesses in this state,” Maher said.
According to the state Department of Labor Regulation, 28,261 employers paid $23 million into the Future Fund in 2022, an average of $814 per employer. Maher said his bill would result in about $5 million in savings, or about $175 per employer.
Rep. Chris Carr (R-Sioux Falls) was one of the bill’s two sponsors in the House, along with Rep. Scott Odenbach (R-Spearfish). Carr said the fund was created by former Gov. George Mickelson in the 1980s “because there was no money to spend” on research and infrastructure.
“Fast forward to today,” Carr said, and Congress is funding many such projects, noting that “hundreds of millions of dollars” have been spent. housing and water infrastructure and new research in recent years.
Mr Kerr said of the Future Fund: “It’s no longer as necessary as it was when it was created.”
Opponents testify
Economic development groups, chambers of commerce and some educational institutions that receive grants from the foundation disagreed with Carr’s opinion.
Silken said the Future Fund has made a significant contribution to the state “by providing support to many organizations over a long period of time.”
Julie Johnson was State Secretary of Labor when the Future Fund was established and helped write the bill that enacted it.
‘Governor’s Cup’ rodeo by people who received millions of dollars from public funds controlled by Noem
“I’m very proud of what the Future Fund has done for South Dakota,” he said while urging the committee to vote down the bill.
Maher said he was not surprised by the “parade of opponents” who came forward. He said the crux of their argument was “don’t take pork away from us.”
Maher said his goal is to “keep money on Main Street.” He said that from 2020 to 2023, the fund’s annual inflows increased from $17 million to $24 million.
“It’s a fund over which Congress has no oversight whatsoever,” he added.
Schoenbeck said that even if the fund’s funding is reduced, “all good projects will get funding.”
Sen. Casey Crabtree (R-Madison) said he voted to reject the bill as originally proposed, but would have supported a bill that required more oversight of the fund.
Sen. Steve Colbeck (R-Brandon) and Sen. Arch Beal (R-Sioux Falls) made the motion to reject the bill and voted in favor.
“I think the Future Fund is working,” Colbeck said. He said Noem’s use of the fund is “not really an abuse” given that “this governor is spending about $100 million less than the previous administration.”
Noem has disbursed $57 million from the fund in more than five years in office. Former Gov. Dennis Dugard spent eight years in office, spending a total of $163 million, using the endowment for everything from rail improvements to scholarships.
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