After 50 Years of Business Incentives for Economic Development, Where’s All the Money?

The traditional Mickelson/Janklow wing of the Republican Party has been fretting that the radical rightwingers it emboldened with its tolerance of the Tea Party and Trump are reneging on the promise of “economic development” on which the ruling class has banked South Dakota’s fortunes since the gubernatoriats of BIll Janklow (Citibank, trusts) and George Mickelson (Future Fund, REDI Fund). Mickelson’s whole thesis was that if we give businesses incentives—no income tax, breaks on property and sales tax for businesses, loans and grants and other business incentives, low regulation—new businesses will flock here, existing businesses will expand, and the state economy will grow so much that we’ll never need to raise taxes.

Speaker and Republican gubernatorial candidate Jon Hansen has called the state’s business incentives “corporate welfare“. Pro-economic development Republicans like Senate Majority leader Jim Mehlhaff has lamented that such tells businesses that “maybe we’re not as open for opportunity as we’d like to be”.

Republicans have had nearly 50 years of uninterrupted Mickelsonian “open for business” economic development policy. So I have to ask: where’s all the money?

Where’s all the money that pulls South Dakota teacher salaries out of the national basement?

Where’s all the money that ensures raises for state employees that keep up with inflation?

Where’s all the money that helps counties build jails and roads?

Where’s all the money that lets us keep the state sales tax at 4.2% instead of running it back up to 4.5% next year, or drop it back to the 4% we collected back in 1970s?

Where’s all the money that pours in from taxes on new businesses and houses and purchases and obviates the need to raise taxes on any of the old shopkeepers and homeowners and consumers?

We’ve been playing economic development Mickelsonomics for nearly two political generations. Shouldn’t we all be stinking rich by now? Shouldn’t paying taxes and funding state government be a whole lot easier now with all the trusts and CAFOs and factories and shrimp farms (oops) we’ve subsidized to take some of the fiscal load off our shoulders?

I dread the Gilead that Jon Hansen would create if he and his wing of the Republican Party took the reins. But on economic development, maybe Jon Hansen is simply asking a question that needs to be asked about South Dakota’s long-standing economic development dogma: if handing out cash and tailoring public policy to do business favors makes South Dakota’s economy flourish, then where’s all the money South Dakota should have by now?