Koenecke and Abraham declare on the committee statement of organization that the purpose of the Committee for Regulated Lending is “Keeping financial options available for South Dakotans.” It sounds like they will expand on blog reader and financial expert Troy Jones’s argument that payday lenders, who would not be able to conduct business as they know it under the 36% interest rate cap Hickey and Hildebrand have in mind, provide an important and useful financial service to low-income folks. We hear here the same thinking behind the youth minimum wage: in South Dakota, giving people more opportunities means making them poorer.
Follow the Money says the Consumer Lending Alliance has given $1.75 million to hundreds of candidates and organizations nationwide over the last fifteen years to defend payday lenders from sane and healthy regulations. They appear not to have contributed to any South Dakota candidates yet, but the formation of this ballot question committee suggests the Consumer Lending Alliance is getting ready to send some money South Dakota’s way.
In my conversations about referring Senate Bill 69 and/or Senate Bill 177, numerous South Dakota neighbors have expressed the concern that crowding the ballot with lots of referenda and initiatives reduces the chances of passing any of them. Divide finite attention by increasing ballot measures, and you’re going to get more exasperated voters who just check “No” on everything. Refer bills from this Legislative session, and you’re going to make it harder for Steve Hickey and Steve Hildebrand or Rick Weiland and Drey Samuelson to sell their big initiatives in 2016.
Do more ballot measures mean a higher percentage of defeated measures? My math says… probably not.
Ballotpedia offers a list of all 333 ballot measures from 1890 to 2014. I have condensed all of those measures into a single spreadsheet here. We’ve passed 144 and defeated 189. That’s a 43.2% success rate… although “success” may not be the right word. Folks who put initiatives forward are hoping for a “Yes” vote, while folks who refer laws are generally hoping for a “No” vote. We have voted down 70% of our 44 referenda. If we count defeats of referred laws as “success” for the organizers, then the overall “success” rate for ballot measures rises to 48.7%.
But for this math moment, let’s just say Yes means Yes and No means No. How does the percentage of passed measures correspond to the number of measures on the ballot?
In years when South Dakotans have had just one, two, or three ballot measures, the pass rate has varied between 0% and 100%.
In the six years when we’ve had more than ten ballot measures, the pass rate has ranged from 9% to 92%.
If I get nasty and run the formal statistical correlation of each year’s ballot measure count with the pass rate, I get a small and statistically insignificant number.
More simply put, if South Dakota history means anything, folks referring laws to a public don’t affect the chances Steve and Steve and Rick and Drey have of passing their initiated measures. Ballot measure success is much more likely to be affected by the merits of each issue and the efforts of each campaign.
Bonus chart! Here’s my summary of the pass rates for each type of ballot measure:
The pending drive to cap interest rates in South Dakota and rein in predatory payday lenders gets some national press this week with a hefty article in The Atlantic. Sean McElwee’s article opens with the usual hook—the odd couple of conservative pastor and state legislator Steve Hickey and openly gay Obama campaigner turned restaurateur Steve Hildebrand—then turns to the nitty gritty of usury in South Dakota:
South Dakota has one of the most aggressive payday lending industries in the country. Lenders there charge an average annual rate of interest of 574 percent. In practical terms, if residents of South Dakota borrow $300 to make ends meet, five months later they will owe $660. South Dakota is one of seven states, along with Nevada, Utah, Idaho, Delaware, Texas, and Wisconsin, that do not cap payday-lending rates [Sean McElwee, “The Odd Couple Fighting Against Predatory Payday Lending,” The Atlantic, 2015.03.19].
Governor Bill Janklow made us the usury capital in 1980 when he pushed to eliminate that rate cap and recruit Citibank to Sioux Falls. Augustana economics professor Reynold Nesiba captures the predatory results in one vivid metaphor for our out-state readers:
The result, as Nesiba points out, is a nominally free market in loans that offers few protections for borrowers: “One does not need to be a South Dakota fisherman to understand that freedom for the northern pike in the Missouri River is not freedom for the minnow” [McElwee, 2015.03.19].
Rep. Rev. Hickey explains why he wants to correct this market error:
Hickey, who has helped members of his congregation trapped in the cycle of payday-lending debt, grew frustrated watching people get rich off of exploitation. “I’ve given away thousands of dollars to pay the lenders off,” he said. One payday-loan mogul, Chuck Brennan recently purchased a $9 million second house in Newport Beach. “Good for him,” Hickey said. “I don’t mind people making money, but I feel like I partially funded that by paying the people who owe him.” He also noted that payday lenders often exploit those who are relying on government assistance, leaving taxpayers to foot the bill. “It’s an intentionally defective financial product that is deceptively marketed to the unsophisticated who are barely holding on at the margins of our society,” he said [McElwee, 2015.03.19].
Watch for Steve Hickey and Steve Hildebrand to come to your door with petitions to sign. When they do, help the minnows, spike the pike, and back that rate cap!
Thought you’d heard the last from Rick Weiland? Think again:
Weiland, who carried the Democratic banner in last year’s U.S. Senate race, and Drey Samuelson, who served Senator Tim Johnson as chief of staff, are starting TakeItBack.org, a political organization that will support candidates and promote ballot measures (ah ha! so that’s why Weiland was so irate about Sen. Corey Brown’s attempt to sandbag ballot measures!) to, in Weiland’s words, “take our government back from the stranglehold of wealthy special interests” and “recreate a government that is truly of, for and by the people.” Huh—now why didn’t Richard Pettigrew think of that?
Weiland says the new PAC will target D.C. and state capitols in its fight against plutocracy:
We’re at a critical juncture, and neither of us feel comfortable simply watching from the sidelines, wringing our hands. The average citizen has, unfortunately, lost faith in our political system. Congress’ approval rating remains at an all-time low, voter turnout last year was the lowest since 1942, people feel that their vote no longer matters and that big money donors and paid lobbyists are calling the shots in Washington and in our state capitols. If we don’t do something about it, and soon, our democracy could perish [Rick Weiland, press release, 2015.03.18].
Samuelson says South Dakota-grown initiatives and referenda will be an important part of TakeItBack.org’s strategy:
We strongly believe that the ballot initiative and referendum process is an important tool allowing the voters a direct voice outside a legislative process that has been corrupted by wealthy special interests. In 1898, South Dakota was the first state in the nation to give its citizens the power to use direct democracy, their vote, to bypass the state legislature believing that legislators were not listening to their concerns. It’s worth noting that it was such a good idea that 23 states followed South Dakota’s lead. We believe that the wisdom of our ancestors is still relevant today, and that we can use the tools that they gave us to affect public policy and restore the people’s trust and faith in their institutions of government [link added; Drey Samuelson, press release, 2015.03.18].
No word yet from Weiland and Samuelson on what topics their organization may bring to the ballot, but they’ll want to hustle: with cannabis advocates brewing two initiatives and Steve Hickey and Steve Hildebrand ready to wage war on payday lenders, TakeItBack.org will want to get its ballot measures in the LRC chute and beat the rush for signatures!
Gov. Dennis Daugaard told members of the South Dakota Retailers Association on Monday he personally would not bring forward any proposed changes to the new minimum wage law passed by South Dakota voters as a ballot measure in November, but said he wouldn’t be surprised if some legislators did.
…Changing the law “would be a little bit of an affront to the voters who just adopted it,” Daugaard said, even though he opposed the measure. “I voted against it. I know many of you opposed it,” the governor said, speaking to members at the SDRA annual meeting held in Pierre at the Ramkota River Centre.