No. 11: Railroad taxes
South Dakota long gave railroads a tax credit for improvements made in their lines. The break allowed railroads to reduce their property taxes in a county by the amount they spent.
There was an interruption when then-Gov. Bill Janklow convinced the Legislature to change the law so that the proposed Dakota, Minnesota and Eastern railroad didn’t receive a massive tax break on its proposed coal-line project.
The break was reinstated after then-Gov. Mike Rounds took office and remains in effect today. The state Revenue Department reportedly doesn’t track how much railroads have saved in taxes as a result of the credit system.
What’s happened since the Rounds-era reinstatement of the tax break is the coal project was set aside and the DME was bought out by Canadian Pacific.
What’s also happened as a result of the Rounds administration’s support for the DME coal-line project is that its established competitor, the Burlington Northern Santa Fe, invoked a clause in a state contract and forced a sale of state-owned rail lines to itself.
Consequently, the two largest business owners of rail miles in South Dakota are BNSF and CP, and they essentially aren’t paying their share of property taxes because of the tax credit system.
This matter wasn’t covered by the Legislature’s special committee last summer because the committee’s work was focused on sales- and use-tax exemptions.
The Legislature should appoint a new committee to specifically look at this matter during 2012, with an eye on developing recommendations for the full Legislature to consider in the 2013 session.
School districts, county commissions, municipal governments and other public bodies that rely on property taxes probably would be very interested in the findings, as might be the agriculture producers and other shippers who rely on railroad service.
No. 12: Public broadcasting
This idea is simple. Transfer governing authority for South Dakota Public Broadcasting to the Board of Regents.
Currently, public broadcasting is sort of a lost child in the Bureau of Information and Telecommunications.
The bureau, which is an agency under the governor’s management, is focused on keeping state government’s computer systems and related technology running and safe from cyber-attack.
But the bureau isn’t set up to handle TV, radio and Internet programming that ranges from "Sesame Street" and state sports tournaments to classical music and public affairs call-in shows.
Public broadcasting’s headquarters are on the campus of the University of South Dakota in Vermillion. The state universities are ripe with material that begs for audiences that public television and radio attract.
The state universities also understand customer service, public relations, business management, recruiting and retaining top talent, fundraising, grant applications and outreach. Imagine a state university channel — or channels.
This isn’t a knock on Bureau of Information and Telecommunications. But it’s clear that for the good of public broadcasting there are changes needed, starting with the basic structure.
No. 13: Big-money loophole
We saw three of the candidates for governor in 2010, Democrat Scott Heidepriem and Republicans Gordon Howie and Dave Knudson, exploit a giant hole in state campaign finance limits.
State laws allow a donor to give up to $10,000 annually to a political action committee. There isn’t a limit on how much a PAC can give a candidate for statewide office. So individuals gave money to one or more PACs, with the money passed along to the candidate.
Had the individual been confined to directly contributing to the candidate, the maximum annual donation would be $4,000.
In the case of Howie and Heidepriem, PACs were specially created to serve as the vehicles for getting around the $4,000 individual limit.