Does SD Constitution Allow Voters to Spend Money on IM 22?

Initiated Measure 22, the voter-approved Anti-Corruption Act, includes one potentially unconstitutional section. Scroll to the bottom and read Section 68:

There is hereby appropriated from the general fund, on July 1, 2017, and every July first of each year thereafter, the sum of nine dollars, to be adjusted every year for inflation based on the Consumer Price Index for the Midwest Region, All Items, as determined by the United States Department of Labor, per South Dakota registered voter as most recently determined by the Secretary of State, to the democracy credit fund for the identified purposes of that fund [Initiated Measure 22, Section 68, approved by voters 2016.11.08; enacted 2016.11.16].

If that money were appropriated today, the Democracy Credit Fund would get $4,899,852.

Legislative Research Council director Jason Hancock told IM 22 sponsors in a July 29, 2015, letter that Section 68 might run afoul of Article 12 Section 2 of the South Dakota Constitution:

The general appropriation bill shall embrace nothing but appropriations for ordinary expenses of the executive, legislative and judicial departments of the state, the current expenses of state institutions, interest on the public debt, and for common schools. All other appropriations shall be made by separate bills, each embracing but one object, and shall require a two-thirds vote of all the members of each branch of the Legislature [South Dakota Constitution, Article 12 Section 2].

Here the state constitution appears to conflict with itself. Article 3 Section 1, on Legislative power, says “the people reserve to themselves the right to propose measures….” Note the absence of qualification on “measures.” Article 3 Section 1 doesn’t say “non-fiscal measures.” Article 11 Section 13 allows the voters to increase tax rates and valuations by initiative, and Article 11 Section 14 allows voters to impose or increase taxes by initiative, right alongside the restriction of the Legislature’s authority in such fiscal matters to a two-thirds vote. It seems odd that the constitution would empower the people to initiate laws, including the power to levy taxes, yet not empower them to spend money to enact their initiated laws.

But there that language is, saying we can initiate measures, clarifying that the two-thirds-vote requirement for new and increased taxes applies only to the Legislature and not the people, yet maintaining that all appropriations must come from the Legislature.

Well, not all appropriations. In 1906, we locked the Legislature into spending money on a hard fiber twine and cordage plant at the state penitentiary (Article 11 Section 1). In 1948, we ordered the Legislature to pay World War 2 veterans cash bonuses (50 cents per day of service, capped at $500 for service in the continental U.S., $650 for those who served elsewhere—see Article 13 Section 19). And over the past century, we voters have directed the Legislature to appropriate funds from fines back to the public schools (Article 8 Section 3).

Those spending measures are all constitutional amendments proposed by the Legislature, not statutes like the Anti-Corruption Act. But they were all approved by a simple majority vote of the public, and they all required the Legislature to spend public dollars on specific projects.

A strict reading of the Constitution may lead a judge to throw out Section 68. But if the people can raise money, shouldn’t they be able to spend that money?

8 Responses to Does SD Constitution Allow Voters to Spend Money on IM 22?

  1. Donald Pay

    I assume it will be argued in court. There is the appearance of a conflict, but I would argue the conflict disappears if you include Article 12 § 1.

    By its language, the Constitution in Article 12 § 2 describes how the Legislature is to appropriate revenue. The question will be does Article 12 § 2 apply to initiated measures. I think not, because Article 3 § 1 was amended to include the initiative (“the people reserve to themselves the right to propose measures….”) and Article 12 § 2 was not amended to require any special provisions for appropriations. Thus, the Constitution, as amended, envisions that the voters may appropriate based on the provisions of the initiative, and need not go through the mechanism provided by Article 12 § 2, which specifically addresses appropriations made by the Legislature. The word “bills” is the tip off. Initiated Measures have never been termed to be bills.

    Here’s an additional wrinkle that supports the above argument. Article 12 § 1 indicates payment out of the treasury requires an “appropriation by law….” Any Initiated Measure that passes, is law. That seems to indicate that Article 12 § 1 would allow appropriation by an initiated measure, irrespective of the mechanism established for the Legislature in Article 12 § 2.

  2. Ah, so that’s why the NOem decided to throw her hat in the ring for governor! Why doesn’t that surprise me about her? I don’t know who would be worse as governor, her or Jackley. I’ve met Jackley a few times and slimy is the nicest thing I can say about him. Not to mention incredibly racist against Indians. Although I can say the same for her, as well. Her campaign should be interesting, since she thinks she only represents those who agree with her and not the entire state.

    I’m not surprised that the pigs are squealing over the money trough being rudely shoved away by the great unwashed masses. I strongly suspect that one of the first actions of the legislature after their swearing-in session in January will be to finagle ways to pass a bill to get around it, or at least some of what they consider its more “restrictive” provisions. They simply cannot abide the great unwashed masses who put them in office being able to have any say at all in what they actually do in that office or how they get there.

  3. Donald, I like that reasoning. Article 12 § 1–2 are original language; Article 3 § 1 was amended afterward to include the popular mechanism for making law. One would think the law we make would count under Article 12 § 1–2 as surely as Legislative action.

    I just wish I could find some case law to support this argument. I’m surprised we haven’t appropriated money by initiated law before.

  4. Laurisa, I like to think I’m a step above Noem and Jackley in campaign morality, but even I balked a little at the additional paperwork and the new limits on my campaign fundraising. Nonetheless, I voted for IM 22 and, like the Rapid City Journal editorial board, believe the Legislature should leave IM 22 alone.

  5. Darin Larson

    I agree with Donald Pay. My quick read here indicates that Article 12 Section 2 applies to “bills” passed by the legislature and the requirements therefor. Initiated measures are not “bills.” This appropriation would not be a part of the general appropriations bill and it is not a bill that the legislature has to bless with a two-thirds vote. It is an initiated measure passed by the people. A court should be loathe to undermine the will of the people unless it is clearly an unconstitutional measure. Since it is not clearly unconstitutional, it should stand.

  6. Case law definitely establishes that appropriations for the Anti-Corruption Act are ordinary expenses that may be covered in the general appropriations bill since they are regular, recurring expenses. We definitely don’t need the two-thirds vote. Now I’m looking for the precedent that backs up Darin’s and Donald’s reasoning on whether initiatives can appropriate.

  7. Donald Pay

    Some states have restrictions on the initiative process that precludes direct appropriation by an initiative. South Dakota is not one of them. However, as with any on-going function of government, these states are required to fund where there is no repeal.

    This Massachusetts case is close to being on point. Massachusetts’ initiative law is not as broad as SD’s.

  8. Instructive case, Donald! It even deals with public campaign financing! The idea seems simple: the Legislature can’t evade a law by not funding its enforcement. The Legislature must either fund a law or repeal it.

    I wonder: what if we struck Section 68 but left the rest of the Democracy Credit statutes intact. Would the Legislature still have to put money in the fund to pay out Democracy Credits to qualifying candidates?