A tax increment finance (TIF) district is supposed to be a neighborhood that the city council declares economically depressed and in need of subsidized property development. Rapid City government has decided that a TIF district can be one vacant lot:
At the June 5 Rapid City Common Council meeting, the concept of providing low-cost housing took center stage again.
That evening, council members approved the creation of a tax increment financing district for a five-unit townhouse development on a vacant lot at the corner of Dilger Avenue and Monroe Street, just north of Rushmore Plaza Civic Center [Samuel Blackstone, “Small TIF, Large Repercussions,” Rapid City Journal, 2017.06.25].
Setting aside one lot for one developer to lower project costs seems to be a recipe for crony favors. The developer in this case is NeighborWorks Dakota Home Resources, a non-profit that builds affordable housing, so the beneficiary isn’t necessarily a typical capitalist raider, but this TIF still looks very much like the kind of private or special law—”granting to an individual, association or corporation any special or exclusive privilege, immunity or franchise whatever—that our state constitution forbids the Legislature to enact. The language of SDCL Chapter 11-9, which authorizes TIF districts, seems to envision areas with multiple lots so that the subsidy does not accrue to any one developer.
One of the progenitors of TIF districts says this new single-lot TIF district is part of a trend toward overuse of TIFs:
Former South Dakota state senator Don Frankenfeld can speak to the original intent of South Dakota TIF laws, since he helped write them.
“It hasn’t turned out the way I had hoped,” Frankenfeld said in a Journal interview. “I see a TIF as a potentially useful tool in limited situations … (but) it has morphed into a welfare program for developers that taps into the public treasury and is often regarded by city government as a free lunch” [Blackstone, 2017.06.25].
It would be easy to confuse TakeItBack.org and TakeBack.org. TakeItBack.org is the website of the ballot question organization founded by liberal Democratic South Dakotan Rick Weiland to promote ballot measures to take politics back from big-money donors. TakeBack.org is the website of Take Back Our Republic, a largely conservative group dedicated to taking politics back from big-money donors.
Read that again: conservative leaders are coming to South Dakota to defend an initiative composed by a liberal Democrat against attacks from the Koch Brothers.
To confound us further, conservatives Pudner and Painter laid out their conservative case for IM 22 in an interview with liberal Dakota Free Press last night. Also joining the conversation were Republican Don Frankenfeld and Represent.us political director Dan Krassner.
Pudner has buttered his bread campainging for “conservative, reform-minded” candidates around the country, including most recently Dave Brat, who upset House Majority Leader Eric Cantor in Virginia in 2014. Over the last five years, he has seen money overwhelming elections and picking out candidates who may not be the “most articulate statesmen” but who can raise money.
Early in our conversation, Pudner attacked one of the Koch brothers’ main positioning lines against IM 22. The cards and calls from the Koch’s Americans for Prosperity say that IM 22 will cut into funding for, among other things, roads. Pudner notes that Koch Industries makes asphalt. Pudner says the Kochs will never oppose raising taxes to build more roads (and you know, Americans for Prosperity sent a flunky to the 2015 Legislature to oppose Medicaid expansion, but AFP didn’t dispatch anyone to testify against the $85-million tax increase for road construction in 2015 Senate Bill 1). Pudner argues that, whatever IM 22 might cost the general fund for public campaign financing and administration of the statewide ethics commission, IM 22 would save South Dakota much more in beating corruption in the bidding process for big projects like the asphalt we might buy from Koch plants in neighboring states.
Krassner further crushed the Kochs’ cost argument against IM22 with empirical data from a 2014 study by Indiana University: in the ten most corrupt states in the nation, including South Dakota, reducing corruption to average levels—not eliminating corruption, but just getting a reasonable grip on it—would reduce annual state spending by 5.2%.
Let’s see: our FY2017 general fund appropriations are $1.598 billion. 5.2% of that is $83 million. IM 22 appropriates a maximum of $12 million every election cycle for Democracy Credits and other expenses, and that assumes that only 22% of registered voters would choose to access their Democracy Credits. $83 million corruption savings would cover Democracy Credits for all 531,584 registered voters in South Dakota and leave another $30 million for the statewide ethics commission to enforce the campaign finance and lobbying rules… or just spend what IM 22 calls for and cut taxes by $70 million… which would pretty much put back the sales tax we had to raise to boost teacher pay this year.
Dr. Richard Painter says that campaign finance reform has been supported by conservative GOP nominees like Barry Goldwater and John McCain and should resonate with contemporary conservatives. Dr. Painter agrees that big money lures even professed conservatives into wasteful pork-barrel spending (he saw plenty of such spending during his stint as chief ethics counsel for the Bush II Administration from 2005 to 2007, during some of which period Republicans controlled the White House and Congress).
Dr. Painter also connects campaign finance reform to national security: if big corporate money dominates elections, and if big corporate money represents multinational owner and shareholder interests, then elected officials who are beholden to that big corporate money will be more inclined to leave our resources open to foreign acquisition. Let multinational corporations buy up our resources, and we become a banana republic (review the origin of the term: rich American companies dominating Central American politics). Dr. Painter says that if we don’t want the Chinese buying up our hogs and dairy and cornfields, we need measures like IM 22 to stop them from buying our elections and our elected officials.
Dr. Painter contends that social conservatives should not let the Koch brothers and other big corporate donors fool them into thinking that alliances with big money will give them access to power to pass social conservative legislation. Dr. Painter says big donors will ultimately betray social conservative allies. His primary example is abortion: he says social conservatives who view the morning-after pill as abortion will never win their point in law against big pharmaceutical corporations who stand to make billions from selling Plan-B pills. Dr. Painter extends his argument to insurance companies: big health insurance corporations can maximize profits by reducing the number of sick policyholders. If insurers can identify pregnancies that might produce children with chronic health problems, profit could motivate those insurers to cover abortion in their policies to encourage women to abort those pregnancies and save the insurers money in the long run.
Dr. Painter notes that the original Tea Party—no, not the Fox News shouters of 2010 who seem now to have collapsed into following a loud-mouth billionaire, but the real Tea Party, Boston Harbor, Founding Fathers dressing up as Indians and pitching tea—reacted to government-corporate cronyism at its worst. Just as the Founding Fathers resisted taxation without representation, Dr. Painter says today’s conservatives should support IM 22 to fight the big money rigs our election choices and denies the majority of citizens true representation.
I asked Pudner how big money works against drawing good public servants into politics. Pudner explained that three main qualities make candidates electable: problem-solving, ability to connect with voters, and ability to raise lots of money. Pudner said we still have plenty of good elected officials who love to use their skills to connect with voters and solve problems, but the “political-industrial complex” throws in with candidates who are good at raising money. True public servants then must focus on raising money just to compete and don’t get to spend as much time doing what they really love. Ultimately we end up with a system where the only people who can win elections are either the candidates who will do the big donors’ bidding or the billionaires like Donald Trump who can spend their own money. Practically excluding decent public servants of modest means from elections is bad for democracy.
Of course, the Koch brothers and other rich donors aren’t interested in real democracy. They want to control the government. As Dr. Painter pointed out, the Kochs aren’t worried about South Dakota taxpayers; they are trying to keep the majority of voters from competing with them in choosing elected officials.
Pudner says Take Back Our Republic will focus on delivering their conservative arguments to conservative South Dakota voters. Pudner’s past consulting and campaigning have identified thousands of conservative activists in South Dakota. TBOR’s intent is to equip those activists with research (like the Indiana corruption-savings study) to rebut the Koch brothers’ propaganda.
While that messaging targets conservative circles, I wondered if portraying IM 22 as a conservative measure could make Democratic supporters skittish. Frankenfeld poo-pooed that thought (as he poo-poos much of what I think). He said he senses that Democrats are pretty solidly behind IM 22 while the Koch propaganda has split Republicans down the middle. Frankenfeld says Pudner and Painter’s efforts will bring some of those Republicans back by reminding them that IM 22 fits with their basic conservative principles… and really, on basic principles like using tax dollars responsibly, stopping corruption, providing fair representation, and protecting our national security and sovereignty, don’t Republicans and Democrats agree?
There are a whole range of issues where the money is on one side and the social conservatives are in the position of — there’s a story from the Gospel of Luke of the widow who puts the few pennies in the coffers while all the rich men are standing around and pouring in lots more and Jesus says, “Well, the poor widow, her contribution is just as important if not more important.” And is that the way we’re running our democracy? I would expect the faith community to rebel against this system and to kick the moneychangers out of the temple of our democracy. This is unacceptable [Dr. Richard Painter, interview with Bill Moyers, 2016.04.20].
The idea that the least among us matters is another principle on which true conservatives and true liberals agree. The Bible, like our Constitution, is for everybody, not just the rich and powerful. That message underlies the efforts of Rick Weiland, Don Frankefeld, John Pudner, and Dr. Richard Painter. That message is why TakeItBack.org and TakeBack.org are working together in South Dakota to beat the Koch brothers and pass Initiated Measure 22.
Former Republican legislator Don Frankenfeld and former Democratic legislator Darrell Solberg, co-chairs of Yes22.org, send out the following press release cheering steps our Legislature is taking to tackle corruption but calling for much more substantive action. Specifically, Frankenfeld and Solberg call on us voters to pass Initiated Measure 22, the Anti-Corruption Act, in November.
South Dakota state lawmakers are demonstrating true bipartisan leadership through their labors on anti-corruption bill HB 1214. The proposal is a step in the right direction toward a range of anti-corruption reforms our state desperately needs. With prime sponsors Representative Mark Mickelson in the House and Senator Deb Peters in the Senate, HB 1214 aims to protect South Dakota from cronyism and special interest influence by preventing certain public officials from personally benefiting from government contracts. It also mandates full public disclosure for additional conflicts of interest not outlawed by the bill.
We support the hard work on both sides of the aisle that went into responding to corruption concerns with this necessary conflict-of-interest reform. While tougher conflict rules are important, there needs to be a way to enforce the law. Without an enforcement agency, the new conflict-of-interest law alone is like a speed limit with no police officers on the road. An independent ethics commission is included in our anti-corruption initiative, which is set to appear on the November ballot.
As the Republican and Democratic co-chairs of Yes22.org, we’ve come together to support the South Dakota Government Accountability and Anti-Corruption Act. Initiated Measure 22 is a tough anti-corruption law, backed by a bipartisan coalition of South Dakota liberals and conservatives. It builds on HB 1214’s reforms by preventing political bribery, closing lobbying loopholes, and strengthening enforcement of the law. Moreover, the Act empowers small donors and gives every voter a voice.
Stronger and more comprehensive anti-corruption policy is needed in South Dakota because our state is at major risk of corruption. A recent national study gave South Dakota an “F” for failing to protect our state government from corruption. We cannot fall prey to the culture of corruption in Congress, where highly-paid lobbyists leverage their cozy relationships with politicians to get lucrative government contracts and tax loopholes. By taking preventative action now, we can ensure that South Dakota’s government represents the public interest, not special interests.
Initiated Measure 22 will make all political spending fully transparent and available to the public, so voters know who is paying for political influence. Lobbyists will no longer be allowed to influence politicians with unlimited gifts and meals. Other key provisions will close the revolving door, disclose potential conflicts of interest, and empower small-dollar donors. In November, the people of South Dakota will have the opportunity to truly protect our state from corruption [Don Frankenfeld and Darrell Solberg, press release, 2016.03.08].
Understandably trying to build bridges and demonstrate our common interest in fighting corruption, Frankenfeld and Solberg are a bit too gentle on Mickelson, whose tepid anti-corruption measures leave too much room for excuses and exemptions to protect corrupt cronies. Initiated Measure 22 provides much stronger protections against the corruption that plagues our fair state.
The Anti-Corruption Act will appear on our 2016 statewide ballot as Initiated Measure 22. Why should we do 22? Let’s hear from two notable Republicans spearheading the campaign for IM 22 alongside Weiland:
“This initiative cracks down on the ability of big money interests to buy influence in government and rig the rules,” said Don Frankenfeld, co-chair of South Dakotans for Ethics Reform and a former South Dakota State Senator based in Rapid City. “This law would dramatically improve transparency and accountability.”
…The Government Accountability and Anti-Corruption Act would ensure disclosure of who’s spending money on politics and elections and how it’s influencing our representatives,” said Dave Volk, a former South Dakota State Treasurer based in Sioux Falls who supports the Act. “Democracy works better when voters are well-informed” [South Dakotans for Ethics Reform, press release, 2016.01.06].
IM 22 joins Amendment T, the proposal to create an independent redistricting commission to end gerrymandering in South Dakota, as the second of three big reform measures that Rick Weiland and his TakeItBack.org are hoping to put to a vote this year. The third measure is the proposed constitutional amendment to create open non-partisan primaries. If Weiland’s circulators produced the same error rate on the non-partisan primaries measure as on the Anti-Corruption Act, their petition will qualify for the ballot as Amendment V.
22, T, and V would work together to reform politics in South Dakota. 22 would do what Frankenfeld and Volk say, reduce the influence of big money in Pierre politics and give voters more information, not to mention a statewide ethics commission to go after corruption in campaign finance and state government. T would take politics out of drawing our legislative boundaries, thus making elections more fair and representation more democratic (if not more Demcoratic—keep your fingers crossed!). V, if it makes the ballot, will give more voters a chance to participate in electing their leaders. All of those steps are good for democracy and checking the corruption that has arisen from our too-long-standing one-party regime.
Having all three of these measures on the ballot will also give every legislative candidate an entire canned speech for their campaigns. Legislative candidates, you really don’t need to come up with policy initiatives of your own to discuss on your various campaign trials. If you spend the next ten months talking about nothing but IM 22, Amendment T, and Amendment V and how important those measures are for democracy and urging voters and your opponents to support them, you will have done the public a great service. Change up that speech with points on Referred Laws 19 and 20 (on which you should exhort your constituents to vote NO!) and the rate caps (36% Yes, 18% No! IM 21 Yes, Amendment U for Usury NO!), and you have all the campaign messaging you need.
Team Krebs continues to certify petitions like clockwork. My projections from her work rate on the first couple petitions have exactly matched the days she has certified the last three petitions. If my projections hold, Krebs should rule on the non-partisan primary petition by Monday, January 11; the fair-share union dues petition by Thursday, January 14; and the medical marijuana petition by Friday, January 15.
Frankenfeld says the audit turned up some minor discrepancies showing what he calls some sloppy accounting procedures at the cooperative but no major obvious problems. He says a second more extensive audit is needed to take a deeper look at the payments made to each vendor.
Speaking of Mid-Central, the audit they paid Eide Bailly to conduct only looked at “GEAR UP reimbursements paid to MCEC” by the South Dakota Department of Education “for the time period of July 2013 through September 2015.” It does not include the $233,925.99 in GEAR UP money disbursed to MCEC by DOE in November 2015:
Recall that Education Secretary Schopp cancelled Mid-Central’s GEAR UP contract by phone on September 16 and in writing on September 21. In the September, October, and November MCEC minutes, I find 42 checks to vendors tagged “GEAR UP”—the vast majority of them, 34, in September—totaling $121,958.81. So there must be another $111,967.18 in GEAR UP expenses that MCEC wracked up in previous months that it simply hadn’t submitted for reimbursement to DOE prior to the contract cancellation… or Eide Bailly needs to call Don Frankenfeld to take a second look at the books.
The Anti-Corruption Act fights the corruption that has blossomed like algae under one-party rule in many ways (70 sections worth of ways! It’s big!), but the three big planks are the creation of a statewide ethics commission (something South Dakota had briefly but got rid of when Bill Janklow became governor in 1979), lobbying reform, and campaign finance reform. South Dakotans for Ethics Reform offers this summary:
The law would dramatically improve transparency and accountability rules for lobbyist and campaign donors. It would increase enforcement of the state’s ethics laws, impose heavier penalties on those who break them, and create an independent South Dakota Ethics Commission with the power to investigate government officials and lobbyists for ethics law violations. It would incentivize small dollar contributions and close loopholes that allow legislators to use campaign contributions they receive while running for public office to pay for personal expenses, or to coordinate secretly with PACs [South Dakotans for Ethics Reform, press release, 2015.11.06].
Anti-Corruption Act sponsor Rick Weiland says this initiative offers “a real opportunity to address some of the shortcomings” we see in South Dakota government in “ethics and transparency and campaign finance.” Weiland agrees that “people’s awareness has obviously been raised of late” with the stories about Gant, EB-5, and GEAR UP. But while those stories expose the corruption of our current Republican regime, Weiland emphasizes that the Anti-Corruption Act isn’t about political parties. Corruption under one-party rule is as inevitable as gravity; the Anti-Corruption Act offers “rules… to make sure bad things don’t happen” whenever one party dominates, no matter what party that may be.
If Secretary Krebs finds that 55% of the signatures on this petition are valid, South Dakotans will have the chance to vote on corruption itself and a big proposal that offers multiple ways to combat it. The Anti-Corruption Act could offer South Dakota voters one of the most informative and important policy conversations of the 2016 election.
The GOP spin machine is going to have to retool its snarky partisan attacks on Rick Weiland’s proposed anti-corruption ballot initiative. The wide-ranging South Dakota Government Accountability and Anti-Corruption Act, which includes public funding for political campaigns, a new state ethics commission, and restrictions on lobbyists, has two prominent Republicans backing it: Don Frankenfeld of Rapid City and Dave Volk of Sioux Falls:
A right-left coalition called South Dakotans for Ethics Reform is proposing a new anti- corruption initiative to be placed on the November 2016 ballot. The effort is co-chaired by former State Senator Don Frankenfeld (R-Rapid City) and former U.S. Senate candidate Rick Weiland (D-Sioux Falls).
…”This is South Dakota’s Declaration of Independence from the corrupting influence of big money in politics,” said Rapid City’s Don Frankenfeld, the Republican co-chair of South Dakotans for Ethics Reform and former state senator. “This law would turn South Dakota into a national leader on ethics reform.”
…“The Government Accountability and Anti-Corruption Act would ensure disclosure of who’s spending money on politics and elections and how it’s influencing our representatives,” said Dave Volk, a Republican and former South Dakota State Treasurer based in Sioux Falls who supports the Act. “Democracy works better when voters are well-informed” [South Dakotans for Ethics Reform, press release, 2015.07.15].
Ah, ballot measures, bringing people together across party lines. Isn’t direct democracy wonderful?