Kelly Hertz of the Yankton Press and Dakotan wonders why South Dakota’s elected officials don’t translate their “sunny talk” about our “robust economy” into real investments to address multiple economic shortcomings:
For instance, when the possibility of repealing South Dakota’s food tax was brought up in the District 18 legislative forum this week, several candidates came right out for it, and I never heard any outright opposition to the idea. However, there was cautious skepticism from some candidates about how the state would replace that $100 million in lost revenue (a gap that will trickle down to local governments, too). That IS a big question, as I noted in Wednesday’s editorial, but the doubt, which was not imprudent, seemed to belie the nearly self-congratulatory economic tone I’ve been hearing from around the state recently.
The same goes with Medicaid expansion, which, according to HealthInsurance.org, would help an estimated 45,000 South Dakotans afford health care and could produce savings and benefits in the long run. We’re one of 12 states that hasn’t adopted this, even though Medicaid expansion is 90% funded by the federal government. South Dakota has so far resisted the 10% cost commitment, thus leaving an estimated $384 million in federal funding on the table. Medicaid expansion is on the ballot next week (and this column is not an endorsement of that measure), but the continued resistance seems odd amidst all the talk of our strong economic standing and AAA credit rating, the latter of which is actually quite an accomplishment.
Let’s also mention a long-sought, state-funded preschool program. South Dakota is one of seven states that doesn’t offer this, even though the advantages of preschool for young, developing minds are considerable and attractive. Yankton understands this since the school district now offers a free pre-kindergarten pilot program. Again, it’s an investment that can produce broad benefits, but South Dakota as a state remains on the sidelines.
Meanwhile, teacher pay here remains an embarrassment. After ranking last in the nation for three decades in this category, we climbed out of the cellar with the help of a half-cent sales tax increase approved in 2016. But we failed to maintain the funding that enabled school districts to continue boosting pay, and now we’re back in familiar, last-place territory [Kelly Hertz, editorial: “South Dakota Economic Talk and Our Economic Issues,” Yankton Press and Dakotan, 2022.11.03].
What good is a strong economy if we aren’t using that strength to solve problems?
Having a strong economic ledger is a real positive, but it’s not the endgame of governmental fiscal prudence; otherwise, it’s a little like bragging about the high-end house you own in the lake area but can only afford if you eat just once a week. Rather, it’s what that financial standing can do for the people, both in the short term and the long run, that really counts [Hertz, 2022.11.03].
South Dakota relies too much on magical economics: pray to the Invisible Hand (and throw corporations and friends some subsidies) and hope things just work themselves out. But even Adam Smith recognized that we still need government action to solve problems that a healthy free market alone will not. South Dakota’s elected officials forget that, even when their magical thinking pays off in some economic growth, they still have to make plans and execute policies to solve social problems.