2016 - February 11 Capitol-ism

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South Dakota Chamber Of Commerce - Capitol-ism E-Newsletter

February 11, 2016      

New Service for Members – Bill Tracking List

If there are chamber members who want to spend several hours a day reading through the bills during a legislative session, we haven’t found them yet.  In accordance with that observation, Capitol-ism is written to be a fairly quick read focused on the most important issues being debated by the Legislature.

The Chamber has not had a way to show the greater number of bills that might be of interest to members until now.  We are introducing the South Dakota Chamber of Commerce and Industry’s Bill Tracking List. 

Click on the link below to see an expanded list of bills the Chamber is actively following.  With each bill, readers will see the main sponsors of bill; the Chamber’s position whether it is supporting, opposing, or monitoring; votes in committee; and on the floor of the House or Senate.  For some bills there is a link to notes as well.

The Chamber reads and evaluates all bills during each session.  The bills on this tracking list are the most interesting or the most urgent or, on occasion, the oddball ones that are too funny to keep to ourselves.

Here is the link to the list – Bill Tracking List    

Chamber Supports Governor’s Education Plan

Education is critically important to business and is, therefore, an important topic for the South Dakota Chamber of Commerce and Industry’s Board of Directors.  The Board met with the State Senator Deb Solholt, Vice Chairperson of the Blue Ribbon Task Force on Schools, in October and again in December to hear about the findings of that task force.  The Board also heard from Governor Daugaard during one of the weekly phone conferences held each session during which the board approves the positions taken by the Chamber. 

HB 1182 is one of the Governor’s package of bills that are a result of the Blue Ribbon Task Force.  HB 1182 increases the state’s sales tax by one half of one cent.  The tax increase will raise approximately $110 million dollars.  The Governor has proposed raising average teacher pay from the current level of $40,000 to $48,500, which will cost $75 million dollars.  At this level of average pay, South Dakota will be paying teachers a little less than the other states in the region. 

The Governor’s plan would spend the extra money on property tax relief, which would include reducing the mil levies for commercial property as well as agriculture and residential.

The bill was presented to House Appropriations Committee on Monday and was approved on a vote of 13 – 0.  With a clear majority, the Board decided the Chamber should support the Governor’s plan.  It should be noted for the membership that many of the board members wished there were more reforms made in education that would follow the experiences of the business community when dealing with workforce shortages. 

The Chamber Board of Directors meets in person during Business Day at the Legislature next week.  If you have comments about the half-penny sales tax increase or the other changes in education being proposed, please use the reply function to make those comments, all of which will be presented to the Board of Directors.

Here is the Chamber’s statement:

South Dakota Chamber of Commerce and Industry

Supports Governor Daugaard’s Education Reforms

The Statement of Support

The South Dakota Chamber of Commerce & Industry endorses the principles of the Teacher Pay Plan and reforms envisioned in the Blue Ribbon Task Force Report as presented by Governor Daugaard.  We believe they will bring about competitive teacher pay, a transparent and fair funding formula, and a more efficient educational system.  We endorse a half-cent increase in the state sales tax, and the $40 million in property tax relief for all property taxpayers.  As part of the Governor’s proposal, we would like to see discussions including differential pay and increases in the length of the school year, but endorse the plan without these qualifications.  We believe it is critical that the plan be adopted in this 2016 Legislative Session.   

The Chamber’s Rationale

Schools are a function of government that is intrinsically valuable to every business in the state.  The economy cannot function without an educated workforce or without a citizenry that is able to function in an increasingly technical world. 

In the search for qualified teachers, schools are encountering the same frustrations that confront the private sector. The business community struggles to find workers that are trained in the most needed skills, and that have an educational background that is appropriate for many of the positions that have few applicants or remain vacant.

The challenges facing schools have been thoroughly analyzed by the Blue Ribbon Task Force appointed by Governor Daugaard last year and solutions for many of those challenges are found in the Governor’s proposals to the 2016 Legislative Session.  The Chamber is grateful to the members of the Blue Ribbon Task Force and their Co-Chairs Senator Deb Soholt and Representative Jacquelyn Sly.

The South Dakota Chamber of Commerce and Industry endorses the core of the solutions being sought by Governor Daugaard to address the education teacher shortage, to reshape how education is funded and to increase the resources applied to these challenges.  This endorsement is based in large part in support of reforms that the plan makes in education funding and administration. 

The education proposal is more than a tax increase to raise money that will be given to schools carte blanche.  Here are the reforms that the Chamber supports:

Restore funding for National Board Certification – Teachers earning this certificate will be given a $1,000 increase in pay from both the state and the local school district for five years, with an option to extend for another five years.  That amounts to a $10,000 to $20,000 earned bonus for the very best teachers.

Move to a systemic funding formula The Governor’s plan ends the funding formula based on students and instead creates a model district that determines funding through a specific teacher/student ratio (14-to1, with adjustments for small districts) so citizens can make sense of how money is being spent in their districts.

New money to teachers
90% of funds gained in the new formula must be spent on teacher salaries.  The formula will be based on average teacher salary of $48,500 with 29% added for employee benefits and 31% added for administrative costs. 


Accountability
More than ever before, citizens will be able to see the number of teachers in their district, the average pay for those teachers, level of benefits and cost of administration as well.  It will be possible to hold each district up against the model district used in the formula and determine if a local district is spending resources in a manner that is offered as efficient.


$1 million for innovation
Districts that have found innovative ways to educate students, whether through self-directed learning or distance learning, to take advantage of the best teachers in selected classes, will have the resources to refine those innovations and offer them to others.


Giving reciprocity to teachers certified in other states South Dakota has been reluctant to recognize the certificates granted by other states, this will change and the result will be expanding the market of teachers that can be hired.


E-Learn
ingThe plan doubles the electronic learning capacity which will help school districts find the best teachers for hard to hire topics, saving resources and allowing the teachers that succeed in e-leaning to earn more money.

Economy of scale in shared servicesThe state has saved districts thousands of dollars by jointly purchasing centralized software.  These cost savings will be expanded to areas such as financial planning, human resource management and even joint purchasing of food or school lunches.


Reinstate statutory caps on school district general fund reserves – Taxpayers expect their money to be used for public services.  Reasonable reserves are laudable but some districts have too much tax money sitting idle.


Equalize other revenue to establish greater equity by equalizing future growth in other revenue sourcesThe mandate to provide education is the state’s responsibility and reshaping the formulas that assure each student has an equal opportunity to benefit from that mandate – it makes sense to include these funds.


Bringing caps on the growth of revenue from the capital outlay levy – Revenue from this levy has grown an average of 9% per year for a decade.  It is time to include this tax in the limitations that control other tax revenues.

Property Tax Relief – Since revenue from the proposed half-penny increase in sales/use tax exceeds the amount needed to fund the reforms in education and address the level of teacher compensation, the Governor-proposed property tax reduction is a good use of the excess funds.   

ConclusionBusiness understands the challenge of not having a readily available workforce.  School districts can learn much from the approaches used by the private sector in addressing these issues, such as the use of differential pay to hire the most difficult to fill positions.  At this time the state faces systemic issues with education that require immediate action and are applicable throughout the state.  The solutions to address the most urgent needs have been outlined in the proposals discussed in the Blue Ribbon Task Force report and offered by Governor Daugaard.  The South Dakota Chamber of Commerce endorses those reforms and expanded revenue needed to accomplish those reforms. 

 
Guns in Trunks – Locked Away for Another Year

HB 1142 - Rep. Wiik (R-Big Stone City) has been brought to a number of legislative sessions in various forms.  The essence of this bill is to prevent businesses from adopting, or enforcing, any policies that prohibit employees from having firearms in their cars. 

HB 1142 does require guns to be in the trunk of the car or otherwise locked away from being seen by a casual observer who might suddenly decide to see what it would be like to become the main character in a mass shooting.

Businesses adopt policies that prohibit firearms on their property as part of a significant responsibility to keep their employees as safe as possible.  One of the difficulties of having employees is that they are all so very . . . human.  As humans they (and we) are subject to a wide range of emotions, some get angry, some go through divorces, or have children, and most of them get understandably upset if they lose their jobs.  Keeping firearms away from the property is a small step against having a big tragedy under extreme circumstances.

Controlling whether there are guns on your property is also a fundamental right of owning property, even if that property happens to be a business.

The South Dakota Chamber of Commerce and Industry thanks the members of the House Commerce and Energy Committee who voted to defeat HB 1142.  Here is the committee vote:

HB 1142, House Commerce and Energy, Deferred to the 41st legislative day*

Beal

Nay

Harrison

Nay

Hawley

Yea

Kirschman

Yea

Novstrup (Al)

Yea

Stalzer

Nay

Steinhauer

Yea

Wiik

Nay

Willadsen

Yea

Wollmann

Yea

Zikmund

Yea

Schoenbeck

Yea

Rounds

Yea





 

Ayes

9

Nays

4

Excused

0

Absent

0

*Note – “Defer to the 41st day” is the motion used to defeat a bill as there is no 41st day and this motion allows debate.  A motion to table a bill does not allow for debate.

 

Short Lived but Long Lasting

HB 1193 - McCleerey (D Sisseton) – Prohibit business from asking about criminal background or convictions on employment applications. 

First, it is important to note that this bill didn’t last very long and its defeat was not a surprise to anyone.  Capitol-ism presents the bill to make members aware of a growing trend that will be part of the public debate for next few years.

The debate is about how people who have been convicted of crimes, particularly those who have served time in prison, should be treated at the end of their incarceration as they reenter the workforce and rejoin society.  The broad question is how long does someone have to “pay for their crime” before they can once again be full citizens or, in the alternative, are all prison sentences in fact life sentences.  This is especially intriguing during a time of workforce shortages when simply finding workers with any skills is difficult.

On the other hand, many positions have security requirements imposed by other laws.  A business that makes gold jewelry can hardly be scolded for wanting to know if a potential employee has a history of wandering off with things that don’t belong to them.  Shouldn’t an employer be aware if an applicant has anger management issues that have previously escalated into violence or, worse yet, been resolved with firearms (see story above)?

This issue is not advancing this year but it is part of national political debate that members should be aware of.  As a way of helping members to be prepared for those discussions, here is the language of HB 1193:  

FOR AN ACT ENTITLED, An Act to prohibit certain inquiries about criminal records during any initial employment application process and to provide a penalty for a violation thereof.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
    

Section 1. That the code be amended by adding a NEW SECTION to read:

No private employer, public entity, or governing body may require an applicant for employment to complete any application that makes inquiries regarding an applicant's criminal record, or make any verbal or written inquiry about the applicant's criminal record, during the initial employment process. Once the initial employment process is complete and the applicant is further considered for employment, the employer may make inquiries about the employee's criminal record, as necessary for the position.
   

Section 2. That the code be amended by adding a NEW SECTION to read:

The terms of this Act do not apply if the employment being considered is a position for law enforcement, corrections, the judiciary, homeland security, emergency management; if an arrest or conviction would preclude the applicant; or if the position requires a criminal background check by law.


Section 3. That the code be amended by adding a NEW SECTION to read:

Any private employer, public entity, or governing body who violates this Act shall be liable for a civil penalty in an amount not to exceed one thousand dollars for the first violation, five thousand dollars for the second violation, and ten thousand dollars for any subsequent violation.

Business Day at the Legislature

We are one week from this year’s Business Day and Annual Meeting event in Pierre.  Registration remains open on the website – www.sdchamber.biz – click on “Business Day” or follow the links from the events calendar. 

Business Day provides an opportunity for our members and for community and business leaders from across the state to meet in Pierre and have a voice in legislative process.

Outline of Events

11 AM – Registration opens at the Ramkota in Pierre

12 Noon – Networking Luncheon

1:15 PM – Legislative Update and the annual Business Caucus (audience response session)

2:45 – Open Schedule – Time to view the legislative process at the Capitol

3:30 – Update at Capitol, Room 414 - Attorney General Marty Jackley

4:45 – Economic Developer’s Reception and Manufacturer’s Showcase

5:45 – Business Day Banquet with Keynote Speaker Chuck Schroeder, Rural Futures Institute, Lincoln, NE

8:00 - Adjourn

The Business Caucus is underwritten by 3M Company and US Bank, with additional sponsorship provided by NorthWestern Energy and Black Hills Energy.
      
A number of our member manufacturers are participating in this year’s Manufacturer's Showcase, which highlights products manufactured in South Dakota and the worldwide reach of our producers.  A visual presentation will run throughout the Reception (sponsored by local economic development offices) and again during the Banquet.  The presentation will be posted to the website after Business Day.

All of South Dakota's legislators, the Governor and his Cabinet members, as well as Constitutional officers are invited to the banquet as the guest of our board of directors, local chambers of commerce and the South Dakota Chamber.  This is an excellent opportunity to visit with officials about issues of importance to your business and community.

Our lineup of speakers is excellent with Tony Venhuizen, Chief of Staff for Governor Daugaard, on schedule for the luncheon; Attorney General Marty Jackley addressing our afternoon group at the Capitol; and keynote banquet speaker Chuck Schroeder, Founding Executive Director of the Rural Futures Institute at the University of Nebraska. 

Banquet speaker bio:  Charles P. “Chuck” Schroeder is a native of southwestern Nebraska ranch country near the rural community of Palisade. Prior to beginning his new duties on December 1, 2013 as founding executive director of the Rural Futures Institute at the University of Nebraska, Schroeder served 12 years as president and executive director of the National Cowboy & Western Heritage Museum in Oklahoma City, Oklahoma. Prior to that, he held other leadership positions in the public, private and non-profit sectors, including serving as founding CEO of the National Cattlemen’s Beef Association, headquartered in Denver, Chicago and Washington, DC. Schroeder also served as executive vice president and director of development at the University of Nebraska Foundation and director of the Nebraska Department of Agriculture.

Schroeder was involved with his family’s farming, ranching and cattle feeding enterprise, the Schroeder Cattle Company, for about 30 years, until its sale in 2004. Chuck is a graduate of the University of Nebraska-Lincoln with a degree in Animal Science.

Schroeder has served on many boards of business and civic organizations such as the Greater Oklahoma City Chamber of Commerce, Museums West, the Oklahoma State Fair, Sirloin Club of Oklahoma, and advisory boards for the Oklahoma Arts Institute and the Oklahoma State University Museum of Art.  Previous volunteer leadership roles include terms as chairman of the Council for Agricultural Research, Extension and Teaching, president of the Heartland Center for Leadership Development, chairman of the Beef Industry Food Safety Council, and founding board member of the Rural Policy Research Institute., as well as Agriculture Future of America. He has also served as a board member for the International Stockmen’s Education Foundation and Payne Education Center. Special recognitions include the Oklahoma Humanities Council Community Leadership Award, the National Cowboy Symposium Western Museum Award, the NU College of Agricultural Sciences and Natural Resources Alumnus Award, the Ak-Sar-Ben Agricultural Achievement Award, and inclusion in “Who’s Who in the Western Livestock Industry.” He was also selected for participation in the Gallup Premier Leadership Institute and Stanford University’s Executive Program for Non-Profit Leaders.   

Schroeder is an active team roper, and his interests span American Quarter Horses, art, rodeo, political history and livestock genetics among other facets of the American West.  Chuck is married to Kathi, a retired high school special education instructor and cousin to State Chamber President David Owen. 

Click here to register.


Thank you for your support of the South Dakota Chamber of Commerce and Industry!

 

 

 


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