Wednesday, March 18, 2015

So If Things Are So Hunky-Dory In South Dakota, Howcum Our Sales Tax Revenues Are Way Down From What We Expected?

     Wow.  Looking at the just-released Governor's Office Of Economic Development (GOED)
The Just-Released Report
There are lies, damn lies, statistics and economic reports
(photo from
annual report for 2014, you'd have to conclude that we are one economically supercharged state. This slickly-produced recap of our own wonderfulness pulls out all the stops when it comes to self-praise, rehashing the "We're Number One" puffery that routinely gets churned out by the public-relations wizards in Pierre. The data are mine-able in the link I provided, so you can make your judgements for yourselves.  I should warn you that wearing a pair of sunglasses while reading it might spare your pupils from the effects of overdosing on dazzle and glitz..

     My conclusion from the data isn't quite as effervescent as that of its authors, Governor Daugaard and his staff at GOED, mainly because I don't see how the growth rates touted in the report translate into better economic numbers for us rank-and-file South Dakotans.  For one thing, in his quintessentially and admirably wonkish fashion, Cory Heidelberger over at Dakota Free Press (nee Madville Times) compares the value of South Dakota's public school teachers to the value of our state's overall economy and comes up with a conclusion that's the equivalent of a bronx cheer for our state's elected officials:  Cory's excellent analysis concludes that the growth of teacher salaries has been so far outpaced by the growth of our economy that the relative value of teachers to our economy has actually declined by 20% during the past decade.  
     As to the whiz-bang growth of the state's Gross Domestic Product, it should be pretty obvious that the upthrust has come about because of the startling appreciation in grain and livestock prices during the period (2004-2013) covered by the report.  That's all well and good, of course, as our farmers and ranchers are, on the whole, among the most outstanding and dedicated bunch of folks I've ever met.  Nothing against them and their hugely dominating segment of our state's economy. But when it comes to spreading that wealth out into the non-farm sector of South Dakota's economy, I just don't see results measuring up to the chest-thumping tone of the GOED proclamation. I took a look at taxable sales data provided by the South Dakota Department of Revenue, which only go as far back as 2008 for year-to-year comparisons, and find that taxable sales have grown at just a bit over 3% a year after smoothing out the year-to-year bumps. This is pretty much consistent with national growth rates during the period, so I don't see any big deal in the numbers.
    More pertinent to the here and now is the current sales-tax revenue situation, which is awful.  Our sales tax revenues for the first half of this fiscal year are running at a 1.1% annual rate,
Why Is This Man Laughing?
Maybe Cuz His Revenue Projections Were A Joke?
(photo from the

far below the 2.8% that was projected by government officials, and even farther below the 3.1% expected nationally by the National Association of State Budget Officers. Somehow, amid all the glowing comparisons of how we're doing relative to the rest of the country, this nasty little fact got overlooked by the statistics-massagers at the Governors Office Of Economic Development.  In the meantime, our elected officials were forced to pare down spending plans for many programs because of the shortfall. Especially bothersome in the context of all this grandiosely- hailed economic growth, we haven't been able to pull down the money needed to keep our roads in good condition, leading to a sudden 6-cent bump in gas taxes to raise the cash necessary to compensate for years of official malingering. In the aggregate, that's a lot of dough that will suddenly be pulled out of the private sector, only softening overall sales for the foreseeable future.
     And then there's job growth.  My thanks to Cory at Dakota Free Press for coming up with this spread sheetthat uses near term and intermediate term (2011-2015, which matches Daugaard's tenure as Governor) Bureau of Labor Statistics data that rank South Dakota 31st nationally in job growth. Given such mediocre performance, I have to wonder about all the hoopla coming out of the Governor's economic "report card."  I suppose if I were grading myself I'd get a little carried away with my own self-perceived excellence too, but reality bites and reality's teeth marks are all over this GOED summary.  
     As propaganda documents go, this one fits the bill.  But as an upfront assessment of the state of our economy, its prospects and performance?  Forget about it.  


  1. Since the SDGOP has controlled power here in South Dakota for a long time shouldn't our state be one of the booming economies among the 50 states? You would think it could of been an example for other states to follow especially those that did not have a GOP supermajority in power. What gives? There should be no excuses and please don't blame Obama on this one. :)


  2. I don't know what anyone else thinks, but it seems to me that the people leading our state government right now are almost amateurish about it.

  3. Anyone who knows a modicum about politics knows SD is not controlled by "limited-government conservative Republicans" despite the ad nauseam of campaign material propagated around the state during elections. Daugaard learned his trade in politics as a Chicago lawyer during the same time frame as Barack Hussein Obama. He is equally adept at looking the public in the eye and lying to them without any remorse whatsoever.

    Let's not forget that up until November of last year (election time), SD was the very best state in the whole world (including our highways) as our host points out Daugaard snake oil salesman sold voters on.

    The problem with the fake conservatives like Daugaard is that they poison future elections for Republicans as they ruin the credibility of the conservative brand with their tax, spend, & create more government ways. South Dakotans just as well could have elected a super-majority of Democrats the way Daugaard and his RINOs have governed so far.