In our discussion of the Blue Ribbon Task Force meetings on K-12 funding, commenter SuperSweet reminds us that South Dakota is sitting on three trillion dollars in bank assets. A third of a hundredth of a percent of that money would give every K-12 teacher in South Dakota a $10K raise and a Christmas ham, if not a whole hog. Those bank assets sound like a good possibility for meaningful K-12 funding that the Governor says his panel is looking for.
South Dakota’s bank asset figure as of March 2015 is actually $2.957 trillion, according to the Federal Deposit Insurance Corporation. We’re first in the nation, holding almost 18% of the bank assets counted by FDIC. I think the nation would understand if we took a small cut as compensation for caring for so much of its money.
The discussion of all that money buried in South Dakota’s yard also reminds me that South Dakota is confused about what it’s biggest business is. This banking flyer from the Governor’s Office of Economic Development says finance is South Dakota’s leading industry:
In fact, according to gross domestic product (GDP), the finance industry is the No. 1 industry in South Dakota, accounting for more than 15% of our economy. Furthermore, South Dakota has one of the highest concentrations of GDP attributable to the finance industry in the nation, surpassed only by Delaware [Governor’s Office of Economic Development, “South Dakota Financial Services Industry Quick Stats,” updated March 2015, downloaded 2015.06.07].
But the Department of Agriculture continues to append the following farm boosterism at the bottom of every press release:
Agriculture is South Dakota’s No. 1 industry, generating over $25.6 billion in annual economic activity and employing more than 115,000 South Dakotans [South Dakota Department of Agriculture, press release, 2015.06.02].
Let’s look at the actual GDP figures. The agricultural sector—in which the Bureau of Economic Analysis lumps forestry, fishing, and hunting along with farming—produced $6.38 billion, 13.7%of South Dakota’s $46.7 billion GDP in 2013. The financial sector—including banking, insurance, real estate, rental, and leasing—produced $11.44 billion, 24.5% of our 2013 GDP.
GOED acknowledges that agriculture really only produces $6.38 billion in direct economic activity. The $25.6 billion the Department of Agriculture cites comes from counting some inscrutable number of indirect effects, like farmers buying fuel, tractor tires, and other goods and services to boost other industries’ GDP. Of course, if we apply the same quadruple multiplier to calculate the financial sector’s indirect economic impacts—buying paper, computers, telecom services, and fancy lunches for visiting execs at Minerva’s—then the financial sector could claim to generate darn near every penny in South Dakota’s 47-billion-dollar economy.
We prefer to think of South Dakota as a farm state, with all of us wearing seed caps or straw hats, hitching our John Deere putt-putts to the hay wagon while a couple chickens cluck in the backyard. But the fact is that South Dakota makes more money on banking than farming.
And since banking is where the biggest money is, banking is a logical place for South Dakota to search for more “meaningful funding” for K-12 education.