Legislature completes session, awaits Governor vetoes
Last Thursday was the end of the main run of the 2022 Legislative Session. The only remaining day of our Session is March 28, which is reserved for “Veto Day”. It’s unclear as to whether the Governor intends to veto any of the Bills that remain unsigned. However, the media campaign she launched against our Appropriations Committee and the Legislature as a whole, suggests there is a strong possibility that the final spending Bills might not fit with her agenda and end up with a veto.
Specifically, there was a fundamental disagreement over whether the hundreds of millions of dollars claimed to be for ‘workforce housing’ should be under the control of the South Dakota Housing Development Authority OR whether it should be under her control through the “Governor’s Office of Economic Development”. I understand that there is a shortage of housing across the state, but that is due to a variety of factors that will not necessarily be resolved with government money. There are several small towns that need additional housing that might attract new businesses and more workers. But, the idea of “if you build it they will come” is not the role of government, especially when the money originates as federal debt.
The Bills in regard to ‘workforce housing’ went through many iterations and amendments. Repeatedly, they were defeated, revised, amended, and returned for yet another vote. Finally, there was a version that passed, but with significant changes. HB 1033 directed the funds to be administered through the South Dakota Housing Development Authority. It becomes a combination of ‘revolving loan funds’ and ‘grants.’ The intended purpose is to provide financial assistance to build out water, sewer, curb and gutter, streets, lighting, etc. The original Bills would have eliminated the main focus of South Dakota Housing, which is to provide “housing that is targeted to low- and moderate-income families and individuals”. The way the Bills were originally drafted would have allowed any value of housing for any income level to be constructed. They were not solely focused on ‘low and moderate income’ levels.
The original ‘workforce housing’ Bill attempted to make this a real estate developer’s dream come true, where the hard costs of development would be at someone else’s expense or at least at a shared expense. But, even in its current form, the grant of funds is just another step in the direction of state interference in the housing market. One of our Legislators is a real estate developer and he described how this type of program disrupts the housing market. It is much like a federal program from 2009 called “Cash for Clunkers”. That was intended to get rid of older cars and replace them with newer, more fuel-efficient models. The result was the unintended consequence of disrupting the used car market for several years. This could likewise disrupt the real estate market for many who choose to develop with their own money instead of using taxpayer dollars.
In any event, the Legislature finally finished a budget, which helped state employees, teachers, and other state providers at least get close to keeping up with inflation. As I have mentioned before, South Dakota only generates 40 percent of our state budget while relying on the federal government to make up the other 60 percent. And, this year we received 8.32 times as much money as in a regular year, so it is not hard to understand how we balanced our budget.
Stay tuned for “Veto Day”.
Please go to www.sdlegislature.gov to see what else is coming up in state government this year.
