Legislative panel slams administration spending in economic development fund

Appropriators fall short in bid to cut money going to Future Fund

Rep. Chris Karr and Sen. Ryan Maher provide testimony on a bill that would cut funding to the state’s “Future Fund.” (Austin Goss/The Dakota Scout)

PIERRE – A legislative hearing intended to discuss funding cuts to the state’s “Future Fund” turned into a scathing review of the current administration’s utilization of that money.

But in the end, lawmakers decided by one vote to dismiss the proposal to scale back the tax by a tenth of a percent.

Rep. Chris Karr and Sen. Ryan Maher’s Senate Bill 208 would have diverted less money to the fund, officially called the Employer’s Investment in South Dakota’s Future Fund. Established by Gov. George Mickelson in 1987, the fund is intended for “economic development.” It's funded by a tax on South Dakota employers, which is tied to payroll taxes for unemployment benefits. The percentage that the state receives is called an “investment fee.” The money is controlled by the Governor’s Office of Economic Development, part of a governor’s administration.

Julie Johnson, now a lobbyist, was the Secretary of Labor when Mickelson established the fund. She contends that the fund’s use was intentionally left broad.

“I remember distinctly when we agreed on what the name of the fund should be,” Johnson testified Thursday. “It has been an amazing gift… I am proud of what it has done for South Dakota.”

Her testimony was followed by scores of business organizations opposed to the change, who extolled the program for greasing the skids of economic development in the state. 

This reception didn’t come as a surprise to Maher, who brought similar legislation to scale back funding for the program in 2017.

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