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South Dakota Holds 18% of US Bank Assets; Finance Is Biggest SD Industry, Not Agriculture

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.


  1. mike from iowa 2015-06-07 12:17

    Last I heard,3 trillion is about one seventh of the chump change korporate thieves have sitting in off shore accounts waiting for wingnuts to lower the tax to zero so they can re-patriate their ill gotten gains.

  2. Roger Elgersma 2015-06-07 12:33

    The farms are not going to move since it does not work well to move the land. So the farm economy will stay about the same no matter what you do to the taxes. But a banks assets can move across state lines real easy and also can move overseas.
    So if we tax everyone fair and equal we will not lose an industry. So we can tax them but do need to not get greedy. Some states tax oil or coal if they have it but then again the oil and coal will not slide underground and go to a different state.
    Being fair with our tax system is a must.

  3. jerry 2015-06-07 15:05

    The scam is that South Dakota holds the money so that trusts can by pass tax obligations set forth by the federal government. The big industry that is being spoken of is a simple office with a couple of flunkies providing the false front of an active business. In the blink of an eye, all of this industry would be like a fart in the wind to leave the office and find its way to some other tax haven to protect the ill gotten wealth. There will never be a tax on it because it does not exist here as anything more than an account number.

  4. Deb Geelsdottir 2015-06-07 21:15

    Jerry, you are positively lyrical: “like a fart in the wind”

    I think I have a genetic distrust of banking and related businesses. They don’t produce anything. They just manipulate OPM for their own gain. True, there are fair and decent bankers. I know because I’ve met both of them.

    (“. . . genetic distrust . . .)

  5. jerry 2015-06-07 21:29

    Hey Deb, saw your picture there with Roger, cool beans. Bankers do not do a damn thing. They are the most overrated “industry” ever. The blackjack dealer bankers never loose either on the gambling they do and nearly drove us over the cliff in 2008. What has changed since then has been done by the likes of Warren and the Democrats. Of course, the two you speak of are an anomaly that you should feel privileged to have met.

  6. leslie 2015-06-08 08:05

    how do noem, thune and rounds play into this silent “industry” of closed offices with a south dakota address, bloomberg describes??

  7. leslie 2015-06-08 08:19

    i also note ironically, NSU is a HOMELAND PROTECTION designated CENTER FOR THE PROTECTION OF HOMELAND FINANCIAL SECURITY INFRASTRUCTURE, boasted in cory’s cite of state financial stats.

    We are starting to discover more about the tangled web of GEOD, benda, joop, SD lawyers and governors and EB5, eh? NSU should have and could have been all over the EB5 / beef packing debacle, yet was still effective in stifling investigation and transparency of the fraud.

  8. mikeyc, that's me! 2015-06-08 14:28

    Bank franchise taxes, which are paid to the state, are distributed right back to the counties where the bank is located.
    Credit unions do not pay the tax.

  9. jerry 2015-06-08 15:28

    @leslie, The three stooges along with South Dakota’s head clown all travel to the addresses of their benefactors to get campaign moolah to further enrich themselves. They make this Mecca travel each election cycle on your taxpayer money to gloat and giggle at the stupidity of voters. I fail to see how much income is generated by being the piggy bank of the rich and famous for the average jerry in our state. What am I missing?

  10. Craig 2015-06-08 17:43

    Deb that isn’t exactly true. Many Credit Unions have received bailouts and taxpayer subsidies. They difference is you don’t hear about them getting bailed out for billions because most CUs are much smaller than the largest banks you always hear about when discussing things like TARP. The Credit Unions also borrow their money from the Fed at the same rate as banks which means they get the same advantages. They also pay $0 in income taxes which means, in theory, they should be able to pass those savings on to the consumer right?

    Yet we have Credit Union CEOs making $8MM a year (A CU in Denver I recently read about), and some of the same lavish spending on “Corporate Retreats” and bonuses etc. that we have seen from some banks.

    The original idea of a Credit Union was to provide banking services to the underbanked population and to those of modest means. That is no longer the story. The Credit Union industry is begging Congress to raise their business banking thresholds because they want to loan billions to businesses – not the low income citizens they were designed to serve.

    I support the existence of Credit Unions to serve individuals of modest means and to serve local communities. But when they focus on business banking and when they are so large they resemble the large banks then I don’t see any reason why they shouldn’t be paying state and federal taxes to help support the communities they serve. It is time Congress takes action to draw a true distinction between banking services to low / middle income consumers, and big business.

  11. Deb Geelsdottir 2015-06-08 17:54

    Craig, I can’t address CEO salaries. I can tell you that I have banked at credit unions for the past 20 years, and off and on before that. The interest rates and fees I pay are substantially less than I ever paid at a bank. Interest bearing accounts are higher than banks.

    In SD I banked at Black Hills Federal Credit Union. Now I bank at Wings Federal Credit Union in the MN metro. It’s one of the largest ones here. Both have treated me very well.

  12. leslie 2015-06-09 12:33

    the janklow economy!! this is so great, cory, let’s not lose this thread. let’s keep bumping it with ideas like “a daily crop report” on all the radio stations reporting citibank’s profits, cayman accounts, joop’s daily comings and goings, thune’s banking buddies, and how nervous round’s is getting, so the whole state can get behind NSU’s leadership of the world’s financial infrastructure.

    hogs, futures, commodities, … flood the airwaves with transparency so the Heather Wilson’s developing our newest version of a waste dump, the high earning school administrators with cash to burn, the sanford pit at lead, the real estate and water rights boom Homestake and Barrick have monopolized in the Northern Hills, a rally report covering new townsites, per acre prices of “our Black Hills”, the lobbyists’ pet projects for the new year….

  13. leslie 2015-10-20 14:53

    I just feel good knowing NSU (whose lawyers together with Regents may have covered up EB5) is a CPHFIS (Center for Protection of Homeland Financial Infrastructure Security or something to that effect). haha

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