Representative Carl Perry (R-3/Aberdeen) offers House Bill 1062, a not quite fully baked idea to promote financial education for all South Dakotans.
The bill actually starts with a little overbaking: the title is “An Act to increase the financial empowerment of state residents.” I’m writing about this bill this morning specifically because I saw that title and wondered, What is “financial empowerment” a euphemism for? More tax breaks for CAFOs? A rebrand of welfare checks? A minimum wage increase that secret-Democrat Carl wants to sneak by his carpool buddy Al Novstrup?
No, Representative Perry is just using fancy words to make “teach people how to manage their finances better” sound cooler. HB 1062 directs the state treasurer to “support the development of and promote curricula to increase the financial empowerment of all residents….” A more direct bill title could have been, “An act to promote financial education”—fewer words, more clear intent.
Now Representative Perry says “curricula” because (1) it is cool to form plurals with something other than an s whenever possible (teaching our children to say curricula will make them genii) and (2) because he targets several special audiences with diverse financial education needs. HB 1062 is for everybody, but it calls for “special emphasis” on students in K-12 and higher ed, the disabled, folks in poverty, veterans and soldiers, and old folks. Kids need more advice about starting savings and paying for college; disabled folks need more advice on medical finance; soldiers need specific guidance on managing bills and accounts in an itinerant lifestyle… those groups need different information presented by different instructors in different settings. So, multiple curricula, sure.
But why the treasurer in charge of an education initiative? He’s a bean-counter, not a curriculum developer. The treasurer’s statutory duties are to count and keep the state’s money, pay the bills, “and perform such other duties as are required of him by law.” The only other general duty the Legislature has explicitly required of him in the treasurer chapter is to manage the Teen Court Grant Program… but even there, the treasurer’s job isn’t to create the curriculum or promote the program itself; it’s just to disburse the grants.
I suppose that, since HB 1062 targets everybody, Representative Perry couldn’t just plunk his financial-education initiative in the Department of Education or the Board of Education or the Department of the Military or the Department of Veterans Affairs or the Department of Human Services or the Department of Social Services. Reaching each of his audiences of “special emphasis” will require engaging every one of those departments. Saying, “Have the treasurer do it!” doesn’t come anywhere near drawing all the heads this hydra will need to do whatever hydrae are supposed to do.
HB 1062 authorizes the treasurer to “contract with any public or private entity” to develop and promote financial curricula, so I suppose the treasurer could just hire Dave Ramsey to come and make some speeches around the state (wait: maybe financial education includes teaching state officials not to write five-figure checks to out-of-state speakers for one day of work). Or maybe the plan is for the treasurer to buy Dave Ramsey’s personal finance curriculum and fund training teachers and case workers and veteran service officers to put on their own programs for their own constituents.
Whoever does it and whatever we buy and use, Representative Perry is more eager to teach finance than to finance teaching. HB 1062 creates a “South Dakota Financial Empowerment Fund” (again, can we not just say “financial education fund”?), but it appropriates not one penny thereto. Perry expects “gifts, grants, and donations, from private sources, and all income from and interest earned on the fund” to pay for creating and delivering his financial education curriculum.
HB 1062 depends on private money to fund a financial education program. The state treasurer isn’t equipped to develop or deliver curriculum, so HB 1062’s program will likely be outsourced to private vendors. If the private sector is going to pay for it and do it, why do we need a law at all?
There’s nothing wrong with promoting financial education, but South Dakota already requires a semester of personal finance or economics for high school graduation. We have guidance counselors and financial aid officers educating students about scholarships and college loans. We have South Dakota Retirement System staff running around the state regularly conducting retirement planning workshops. The Department of Defense offers soldiers free financial counseling. The state and federal government appear to be promoting financial education among many diverse constituencies. If Representative Perry has some private-sector players who want to sell books and seminars, they are free to jump in and help without funneling the money through the state treasurer’s office.
Mr. H, you are righter than right about Mr. Perry’s half cooked idea. It is a silly grab by Mr. Perry to pretend to do something meaningful in the legislatures.
Half-baked, for sure. But maybe we can bake it a bit.
There are financial institutions in South Dakota getting filthy rich right now and not paying their fair share in low-tax South Dakota. Filthy rich people park their money in trusts and don’t contribute a thing to the state. Taxpayers paid them a heap of money to keep them afloat not so long ago. A lot of folks lost most of their savings during that time. Some lost homes, jobs and self-respect. I had stock in City Bank. I took it in the shorts. I’m sure many others did, too.
What if you made City Bank pay it backward? Teaching about financial matters would seem to fit into their bailiwick, though they didn’t seem to learn much themselves. The cost of this program could be paid for by a surcharge on the small tax these financial institutions already pay.
It might be good to partner with those institutions to see if they would, for example, provide a basic primer on “financial empowerment,” of at least some financial education for free.
And then there’s the icing on Rep. Perry’s half-baked idea. Let’s say a few of the billionaires in South Dakota, or associated with one of these financial institutions gave everyone working in the state $1,000 to invest for 10 years, let’s say. You think that wouldn’t encourage people to become employed in South Dakota and to learn about financial matters? For myself, I didn’t get interested in investing until I had enough money to actually invest. To do that I had to move out of state. Maybe that shouldn’t have to happen.
I just hope there is a section in the class about the predatory lenders awaiting everyone in (mostly) usurer-free SD. We may create an entire generation of people who will both use their money more wisely, AND seek to rein back the very system that allows corporate greed to victimize some venerable lenders.
We could teach how to be “very stable genii” and declare bankruptcy after overextending. That’s how the big boys do it.
I used to be rich. Then, I lost everything. That was before Obamacare ended medical bankruptcy.
Don’s idea to give every worker a thousand simoleons dovetails with this information. If you get a tax refund or somehow get a grand extra in your checking account don’t blow it on a ski trip to Colorado. $1000 is enough to begin investing. Consider these four suggestions.
https://www.thepennyhoarder.com/bank-accounts/1000-checking-account-make-4-moves/
Where has this guy been. I was on the committee over a decade ago that got the financial literacy requirement in the schools. It was called the Jumpstart Coalition for Personal Finacial Literacy. Several statewide entities came together to promote the cause. I’m not saying its the best we have but its something and I also contend that financial education needs to start at home and at a very young age. We can’t continue to put more on teachers.
We already have that – one of the requirements by the dept. of education.
Yes, it was a required course or part of a course in Rapid City schools in the late 1990s-2001, when my daughter was going through high school. She delayed it as long as she could, hoping the required class would be budgeted out of existence. It wasn’t, so she had to schedule it the last semester of senior year, and take it with sophs and juniors. She hated every minute of that class. I’ll tell you why.
Because we were always poor until we moved out of South Dakota, she developed a phobia about money. She never wanted to think about it because all it ever meant to her was how was she going to explain to me why she needed money for music and drama camp, debate camp and such. We got that money somehow, but we had a screaming fight about some expensive gym shorts. People don’t understand how lack of money can cause anxiety, even in kids.
She is all grown up now, and since she minored in political economics I thought she might have overcome her money phobia. She can deal with organization and business budgets if she has too, but she doesn’t like to. She hates to deal with anything financial in her own life, but she has a retirement account which she puts on automatic because she still hates to learn anything about personal finance.
Amber, you were on that committee? Cool! Who else served with you?
I’d like the treasurer to empower all South Dakotans by explaining how trusts work, telling us who has money is in them and how much, and explaining to us how we can solve our physical problems by fairly taxing all that hidden money.
Clearly, Mr. Perry and this treasurer fellow are both insaner than most.
What Don says about $ anxiety is a real issue that could be an important part of financial literacy.
The problem I see in most of those programs is that a chunk of monthly disposable income is assumed. The program tells you how to get the most out of your extra cash. Right. The people who often get ripped off are the desperate ones who have no extra cash, not even enough to get through the month.
Does Consumer Credit Counseling Services still exist in RC? They used to have an excellent program for people in financial extremis. Their charge was very, very low and worth every penny. In addition, they understood financial phobia and were good at helping clients cope with it.
When I was in high school in the Dark Ages, graduated 1971, Economics class was about how to keep books, business, macro, stock market. No personal money management was involved.
Corey
I have a trust and I pay federal taxes on it. Since South Dakota does not have an income tax, I do not pay state taxes on the money I receive from the trust.
Are you suggesting that everyone’s taxes and account balances should be public record? Why? How is this any of your or any one else’sbusiness if it isn’t a public official????
Why don’t you just advocate a state income tax???
He who casts the first stone should be the first to make their returns and account balances public.
Will you b e making your returns public the next time you run for elective office????!
I’m glad you are among those who get to dodge state income taxes by putting money in South Dakota trusts. I do advocate a state income tax as a more equitable and reliable means of taxation than our regressive two-legged stool.
I said nothing about releasing tax returns. As usual, Barbara, you are trying to distract from an argument that our Republican delegation and their toadies can’t win and turn to the discussion to your preferred bugaboos.
HB 1062 is a vague and redundant proposal that doesn’t address true financial education needs in ways not already handled by the status quo. Are you saying, Barbara, that you favor spending money on a vague program for which there is no apparent need for state action?
Actually, the trust was set up by my Dad and is not basedI in South Dakota but, if we had an income tax, it would be taxed here. It is located in Washington State but is not taxed as income there because I live here.
Those who use trusts use them as sophisticated money management tools that are available to anyone, not necessarily people with great wealth.
I believe the state treasurer is a strong advocate of financial literacy and I see nothing wrong with this propisal. It is still in its earliest draft and has a long way to go through the legislature. It can be tweeked.
Cory
Your comment
I’d like the treasurer to empower all South Dakotans by explaining how trusts work, telling us who has money is in them and how much, and explaining to us how we can solve our physical problems by fairly taxing all that hidden money.
Si, how would the treasurer be able to inform us who has money in a trust and how much???? Tax returns???? Other?????
On third thoughts, if this “empowerment” is intended to teach people of ill repute how to hide from and avoid taxes, perhaps this is an actual empowerment. If young Mr. Perry wishes to show the poor and the disabled how they, too, can put money into trusts in SD like what grudznick does, then I say more power to them all.
We should empower more people to store their money here, and we should even enable the RV world better. Why does this law bill not empower the RV people better? I’m just sayin…
Howz this for financial education…… https://www.rawstory.com/2020/01/a-2020-reminder-55-of-us-women-between-18-and-54-would-rather-live-under-socialism-than-capitalism/
Remember, women can balance a check book.
This law bill is less than half-cooked. it should be sent back to the kitchen and the chef, Mr. Perry, should be flogged for floating such a dumb idea.