Monae L. Johnson

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2000 Pros & Cons and Attorney General Explanations

2000 Ballot Question Pamphlet - Constitutional Amendment A

Compiled by the Office of Secretary of State Joyce Hazeltine

Title: An amendment to Article VIII of the South Dakota Constitution relating to classification of property for purposes of taxation.

Attorney General Explanation

The Constitution permits the Legislature to classify real property for school taxation purposes, but limits agricultural property to a single class.

Amendment A would permit the Legislature to establish multiple classes of agricultural property for school taxation purposes.

A vote "Yes" will allow multiple classes of agricultural property for school taxation purposes.

A vote "No" will leave the Constitution as it is.

Pro -- Constitutional Amendment A

Passage of this proposed amendment to our state's constitution would allow agriculture property to be divided by the legislature into more than one class of property for taxation purposes.

Current constitutional language on agriculture property restricts the legislature in trying to bring about fair and equal taxation of agriculture property across the state.

The present constitutional language enacted in 1930, allowed the legislature to constitute agriculture property as a separate class, which they did. On the question of whether the legislature has this authority, the decision in The Great Northern Railway v. Whitfield stated that "The legislature would be justified in classifying four classes or twenty four classes." However, a 1997 supreme court case stated that the 1930 clause in Article VIII § 15 indicating that the legislature may constitute agriculture property as "a separate class" meant that only one class of agriculture property could be created.

Consequently, agriculture property is not being treated the same as other properties as the legislature can only treat it as one class, yet other classes of property may be divided into more than one class.

Passage of this amendment would allow the legislature to treat agriculture property in the same manner as they may treat other property.

Submitted by: Representative Kenneth McNenny, HC 75 Box 692, Sturgis, SD 57785. Rep. McNenny is a rancher from Meade County and represents District 29.

Con -- Constitutional Amendment A

This amendment is very similar to the constitutional amendment F, that was on the 1998 ballot and defeated. Both are in response to the problem created by extremely high priced sales of agricultural properties for reasons that many times are not for agricultural production. Under current laws of assessment, the sales ratio factor used tends to drive the value of ag property (particularly in development areas) extremely higher than what the productive ability of the property is.

I have opposed this particular amendment because for several years I have advocated and pursued a different assessment procedure, using a formula based on its productive ability to determine the property value, and as a member of the 1999 interim tax committee charged with a study of this problem. This committee produced a proposal to assess based on productive ability and with the action of the 2000 legislature (with some amendments) passed this proposal to study the impact of this concept in nine counties this current year, 2000.

We should know within a year if this assessment concept should be pursued further, dropped or made permanent. If made permanent creating more classes of ag property would not be necessary and may only lead to more inequities.

Therefore the proposed amendment is probably premature, should have been held up or once again defeated.

Submitted by: Representative Al Waltman, 12277 376th Ave, Aberdeen, SD 57401. Rep. Waltman represents District 3.

2000 Ballot Question Pamphlet - Constitutional Amendment B

Compiled by the Office of Secretary of State Joyce Hazeltine

Title: An Amendment to Article IX of the South Dakota Constitution authorizing local initiatives to provide for the cooperation and organization of local government.

Attorney General Explanation

Amendment B would allow voters of local government units to combine, eliminate or jointly finance local offices, functions, or governmental units by using initiated measures, unless specifically limited by the Legislature. A majority vote in each affected governmental unit would be required.

A vote "Yes" will allow voters to file initiatives which combine, eliminate or jointly finance local offices, functions, or governmental units.

A "No" vote will leave the Constitution as it is.

Pro -- Constitutional Amendment B

Constitutional Amendment B gives power to the people to initiate the streamlining of local government, reduce the cost of local government, improve services to people and possibly reduce taxes. Amendment B allows voters to combine or eliminate offices or functions within a single local government, such as a city or county government or school board, or to combine or eliminate offices and functions from two or more of these separate governmental units, such as combining the offices of city and county treasurer, for example.

Voters would be required to secure signatures of at least 15 percent of those voting in the preceding gubernatorial election in the affected jurisdiction in order to place a proposal for combination or elimination on the ballot in that jurisdiction. The proposal would be adopted if approved at the election by a majority of votes cast in each affected jurisdiction.

Elected officials are sometimes reluctant or opposed to combining or eliminating offices and functions under their control no matter how much the combination or elimination would improve services to people or reduce costs and taxes to taxpayers. If approved, Amendment B will give power directly to the people to improve local government. The peoples' use of this new power under the South Dakota Constitution would streamline government, make government more efficient, improve services and reduce taxes.

Submitted by: Representative Bill Peterson, 3808 E Marson Dr, Sioux Falls, SD 57103. Rep. Peterson represents District 14.

Con -- Constitutional Amendment B

This Amendment may have unintended consequences:

A legal "barn door" has been left open in the wording of this Amendment. If this amendment is passed, the SD Constitution would permit administrative cooperation within or between local government units "either within or without the state." While such governmental cooperation with "bordering" states may or may not be feasible and beneficial, the wording does not limit such governmental unit administrative cooperation to "bordering" states. The wording opens up such administrative cooperation to any governmental unit in the USA, in this hemisphere or, for that matter, in any country in the world.

For example, administrative agreement might be made with another governmental unit to store waste--nuclear or otherwise--somewhere in South Dakota. Another example would be that somewhere in South Dakota agreement might be made to have the same type of gambling that Atlantic City has.

Since this is a Constitutional Amendment, it cannot be changed easily to close the legal "barn door" of "without the state." Twenty seven Representatives and thirteen Senators--both Republican and Democrat--voted against Amendment B. For that matter, the voters turned it down in 1998. The Legislature needs to revisit this issue and tighten up the wording before a similar proposal returns to the ballot.

We don't need new laws and constitutional changes to increase local government cooperation, we need local officials who want to do it. If you want further consolidation, the answer is to elect local officials who agree with you, not amend our state constitution.

Submitted by: Representative Mary Patterson, 1503 S. Spring Ave., Sioux Falls, SD 57105. Rep. Patterson represents District 13.

2000 Ballot Question Pamphlet - Constitutional Amendment C

Compiled by the Office of Secretary of State Joyce Hazeltine

Title: An initiated amendment to Article XI of the South Dakota Constitution, concerning the taxation of inheritances.

Attorney General Explanation

The State currently imposes inheritance taxes. Amendment C would repeal the state tax on any inheritance on the property of anyone who dies on or after July 1, 2001, and would prohibit the Legislature from enacting a tax on any inheritance.

A vote "Yes" will repeal the state inheritance tax.

A vote "No" would leave the inheritance tax in place.

Pro -- Constitutional Amendment C


November 7th you have the opportunity to repeal one of South Dakota's most regressive and immoral taxes, the inheritance tax. Known as The Death Tax. South Dakota has the most brutal inheritance tax in the US. With tax rates as high as 55% of the estate, and with the exemption at only $50,000, you are guaranteed that at some point in your life you will pay this Death Tax.

We've struggled over the last six years during the legislature to repeal this tax, with no success. We are guaranteed that if this issue fails to be repealed by the people, there will be little incentive to change or repeal the Death Tax in the future.

TRUE: We will eliminate an immoral tax that hits your family at the worst possible time. Imagine you've just lost a loved one. While you're still dealing with your grief, you receive notice that you have to pay the Death Tax, and you have only 9 months to pay. You then find out the tax is higher than you ever thought, that's when you have to sell part or all of the ranch, farm or the family business, or maybe the home you were born in, just to pay this horrible tax to the state of South Dakota.

FALSE: The repeal would eliminate your 30% property tax reduction, and the state will withhold money from the schools, because they don't have money to replace the 20 million in lost Death Tax money.

TRUE: Growth in our sales tax will nearly cover the Death Tax revenue. We can do both, keep the property tax reduction and repeal the Inheritance Tax. South Dakota's Constitution mandates schools will be adequately funded. No one can take funding away from our schools. It's just scare tactics.


Submitted by: Representative Bill Napoli, 6180 S Hwy 79, Rapid City, SD 57701. Rep. Napoli represents District 35.

Con -- Constitutional Amendment C

The South Dakota inheritance tax is being presented as an unfair, grabbing tax that harshly penalizes the deceased creator of an estate and that prevents hard earned farms and businesses from being passed on to the next generations. Those claims need examination.

In reality, almost 80% of all estates are not even subject to this tax. A surviving spouse pays no tax at all. After the exclusions, a son or daughter would pay a graduated inheritance tax which would mean that a $500,000 farm or business property would still amount to a $465,000 gift and would certainly allow that heritage to be perpetuated. That can scarcely be considered a great damaging penalty to the heirs.

Our inheritance tax has a direct relationship to the absence of a state income tax. South Dakota has encouraged the creation of these family estates by not taxing the profits that made them possible, nor has there been any claim made against the greatly appreciated capital values that are so typical within most of these estates. It is not a death tax but is instead a relatively minor fee against those persons who had little or nothing to do in building the wealth that is being transferred to them. During the 1990s well over 50% of the state's inheritance tax was paid by cousins or nephews or other designees who lived outside of our state.

If you vote for the rescission of this inheritance tax you will, after this next year, automatically forfeit, during all the following years, the last 5% of the property tax relief which the Governor and the legislature have enacted. Should all home owners be asked to contribute 5% of their property tax each year as a hedge against an average 5 1/4% inheritance tax which they will probably never be called upon to pay? This whole issue has been built on misguided emotions rather than on the actual financial impact placed upon the many people of the state.

Submitted by: Senator Keith Paisley, 2409 S. Elmwood, Sioux Falls, SD 57105. Senator Paisley represents District 12 and is chairman of the Senate Taxation Committee.

2000 Ballot Question Pamphlet - Constitutional Amendment D

Compiled by the Office of Secretary of State Joyce Hazeltine

Title: An initiated Amendment to Article III, Section 25 of the South Dakota Constitution repealing the video lottery.

Attorney General Explanation

The Constitution authorizes legislative enactment of video lottery. Amendment D removes that authority and will repeal all video lottery laws.

A vote "Yes" will abolish video lottery.

A vote "No" will leave the video lottery in place.

Pro -- Constitutional Amendment D

When you and I vote on Amendment D, we’ll shape the lives of thousands of South Dakotans. People like Bill O’Hara of Watertown, a solid citizen who ran a medical clinic. But one big win on video lottery and he was hooked. Now, his wife and four children await his prison sentencing for embezzling $670,000 to feed his addiction.

Or consider Carol Johnson of Aberdeen. She bought school supplies and clothes for a heartbroken neighbor girl whose dad was broke from video lottery. But she never dreamed that two years later it would be her husband’s addiction and her kids’ turn to suffer. After four nightmarish years, she recently drove her kids through Aberdeen – at their request – to count the "casinos" where Dad lost all their money.

Multiply Bill or Karen’s story by 14,000 South Dakota addicts and you understand why top state leaders call video lottery "the worst mistake South Dakota ever made." But it doesn’t have to be. In 1994, when courts stopped the machines for three months, gambling addiction inquiries fell 97 percent, according to the USD Journal of Medicine, with "little evidence" that addicts tried other forms of gambling.

But when voters narrowly decided to restart the machines, the social devastation began anew.

Yes, we can talk statistics all day – the fact that 94 percent of losses come from addicts, the $1.6 billion lost in the machines, the 6,000 crimes and $260 million in social costs – but it all comes down to people’s lives.

For 100 years, our state did fine without video "casinos" on every corner. And as a state, we could stand tall knowing we weren’t trying to fund government off our citizens’ weaknesses.

You and I can correct South Dakota’s biggest mistake by voting YES on Amendment D – to stop video lottery.

Submitted by: John H. Paulton, 3500 S First Ave, Suite 210, Sioux Falls, SD 57105. Mr. Paulton is chairman of Yes on D! Stop Video Lottery.

Con -- Constitutional Amendment D

Amendment D seeks to eliminate an entire industry by banning video lottery in South Dakota. This is the third time in eight years that video lottery has been on the ballot. The video lottery industry is a $221 million business that operates in 1600 locations and provides a $25 million payroll to a total of 4000 employees. In addition, video lottery generates $95 million in revenue to the state that is deposited in the Property Tax Reduction Fund and is distributed back to communities through the state aid to education formula.

The loss of a $221 million industry, along with thousands of jobs would be a big blow to the economy of this state. Imagine what will happen if the state loses $95 million in tax revenue. The replacement of that significant amount of money would require either a personal and business income tax, elimination of the 30% tax reduction implemented by Governor Janklow and the legislature, or a significant increase in sales and use taxes. The only other reasonable option to offset the loss of 95 million dollars would require a dramatic reduction in state programs and services and some combination of increased taxes.

Bankruptcies, divorces, and suicides are at their lowest point in three years. This evidence proves that video lottery does not have the social impact that opponents suggest. Video lottery is a voluntary tax paid by adults who play the machines for entertainment. Unfortunately, 1.63% of people who play develop a gambling problem, but should the other 98.37% of video lottery players and 100% of non-players be expected to pay higher taxes as a result?

Government should not be forced into putting the privileges of a free society out of the reach of responsible adult taxpayers. Vote NO on amendment D.

Submitted by: Larry Mann, 520 44th St, Rapid City, SD 57702. Mr. Mann is the campaign manager for Taxpayers Voting No on Amendment D.

2000 Ballot Question Pamphlet - Constitutional Amendment E

Compiled by the Office of Secretary of State Joyce Hazeltine

Title: An Amendment to Article VIII of the South Dakota Constitution, permitting the investment of permanent school funds in certain stocks, bonds, mutual funds, and other financial instruments and to use a certain portion of the interest and income to increase the principal in the fund.

Attorney General Explanation

The South Dakota Investment Council invests the state permanent school fund, and other educational and charitable funds. Losses resulting from these investments must be reimbursed by the Legislature. The Investment Council is prohibited from investing these funds in stocks or similar investments.

In addition to the investments currently authorized, Amendment E would allow the Investment Council to invest these funds into stocks and similar investments. Amendment E would limit reimbursement to losses incurred through any unconstitutional act.

In addition, all interest and income earned from the investment of the state permanent school fund is currently required to be annually disbursed to the public school districts. Under Amendment E, only interest and income earned in excess of the inflation rate would be disbursed to the school districts. The remaining interest and income would become part of the permanent school fund.

A vote "Yes" will change the Constitution.

A vote "No" will leave the Constitution as it is.

Pro -- Constitutional Amendment E

The 2000 Legislature passed a joint resolution placing Amendment E on the ballot. If this amendment is passed it would change the policy under which the $130 million permanent School and Public Land money would be invested. Presently the money can only be invested in bonds. When this amendment is passed the policy would change so the money could be invested in "stocks, bonds, mutual funds, and other financial instruments as provided by law" by the South Dakota Investment Council. Any loss occurring through an unconstitutional act shall be made good through a special appropriation. The Amendment would allow more investment flexibility to maintain the fund at the rate of inflation and to generate higher future income.

The members of the South Dakota Investment Council are professionals responsible for investing over $6 billion of state funds, primarily South Dakotan's retirement funds. The commissioner of School and Public Lands is a member of the council. The Council has an exceptional investment record over the past twenty-five years.

Amendment E would maintain the purchasing power of the school funds for education for future generations of school children. This would be done with the professional management and diversification of the funds. A yes vote would allow the school funds to be invested similarly to the state retirement systems.

Amendment E means preservation for the future of our school funding. Vote "Yes".

Submitted by: Senator Arlene Ham, 1116 Crestridge Court, Rapid City, SD 57701. Senator Ham represents District 32.

Con -- Constitutional Amendment E

You, the voters of South Dakota are being asked again if you want to have the permanent education funds placed in higher risk investments. You voted down the same proposal in 1994, again in 1996, and again in 1998. Now in 2000 you are being asked another time. Do you want to allow the state to invest the permanent school fund dollars in high-risk stocks, bonds, mutual funds or other investments? These types of investments have a greater potential for a higher yield return. This is the attractive side of the issue. The down side of the issue out weighs the proposal. The bottom line: Are you willing to risk the permanent education funds?

Amendment E will allow these funds to be placed in a higher risk investment, with no way to reverse the measure in time to save the funds if the market turns to a large loss cycle. I have always been told never invest more than you can afford to lose. Can we afford to lose our permanent education fund? We must face reality that this type of return on high-risk funds will not and can not always be there. With even the slimmest possibility of these funds being lost, ask yourself, who will be the real loser? The real losers are the children of this state. The investing of our children's permanent school fund is no different than gambling. Would you favor taking these permanent school funds and going to one of the casinos, with the idea to try to increase the amount of funds for the education of our children? I think the voters know the right answer to that question. I feel that I have been elected to the position of House of Representatives to safe guard your money. AND, I stress, it is your money.

Submitted by: Representative Ted Klaudt, HC 11 Box 804, Walker, SD 57659. Rep. Klaudt represents District 28.

2000 Ballot Question Pamphlet - Initiated Measure 1

Compiled by the Office of Secretary of State Joyce Hazeltine

Title: An initiated amendment to SDCL 42-7B-14 to raise the maximum bet limits for limited card games and slot machines authorized within the city of Deadwood.

Attorney General Explanation

State law currently imposes a maximum limit of five dollars on any initial or subsequent bet for Deadwood gaming. Initiated Measure 1 would increase the bet limit to one hundred dollars on each of these bets.

A vote "Yes" will increase the bet limits to $100.

A vote "No" will leave the bet limits at $5.

Pro -- Initiated Measure 1

Since it's inception, the Deadwood Gaming/Historic Preservation Project has relied on a maximum bet limit of $5 on all games being played in Deadwood. A YES vote on this initiative will give Deadwood the ability to compete with other states and gaming jurisdictions that enjoy substantially higher maximum bet limits.

Since legalized gaming returned to Deadwood in 1989, that industry has created over 2,000 direct-employment jobs and thousands of indirect jobs. In addition, millions of dollars from taxes and from private investors have been spent to restore and preserve public and private properties in the City of Deadwood. Deadwood has been directly responsible for increasing the annual visitation to the state. Based on Department of Tourism statistics, that increase in visitation represents millions of additional dollars spent all across South Dakota.

As a National Historic Landmark City, Deadwood's preservation efforts have been second to none in the United States. Deadwood's industry has also funded over $1 million in worthwhile historic preservation projects in every corner of South Dakota. Realizing that this kind of industry is not without negatives, Deadwood has stepped forward to help fund programs to deal with these problems.

Over the past decade, Deadwood has watched it's market share diminish as more and more gaming saturates our travel corridors. Initiative #1 simply allows Deadwood to market and compete for customers not currently coming to South Dakota for recreation gaming. Deadwood does not view this as an expansion of gambling, but simply a change in South Dakota law. If implemented, the new tax formula already in place for Deadwood will allow over 70 percent of those monies to be spent on worthwhile projects like education and additional historic preservation all across South Dakota.

Deadwood will receive only ten percent of any new tax money generated by an increase in the maximum bet limit.

Submitted by: Tom Blair, 4 Ryan Rd, Deadwood, SD 57732 and Tom Nelson, 616 Sunnyhill Rd, Lead, SD 57754.

Con -- Initiated Measure 1

The Stakes are Too High

Vote No on Increased Bet Limits

Increasing the bet limit from five dollars to one hundred dollars means a sweeping change in gambling across the entire state. Higher stakes would apply to the nine reservation casinos as well as Deadwood. The twenty-fold increase is intended to create a competitive gambling industry. This violates the original intention of voters, who approved Deadwood gambling only for historic preservation and as a low-stakes addition to tourism.

Right now the Black Hills area is not just for out-of-state visitors but is also South Dakota's own affordable summer and winter vacation spot. Higher bet limits are a significant first step toward dramatically changing the character of the Hills. Higher stakes will attract high-dollar investors who want to "develop" the area with costly resorts and turn it into a playground for the rich. Property values and taxes, already increasing rapidly, will go even higher. At the same time, the Black Hills economy will depend even more on low-paying service jobs. The combination will turn the Hills into a high-end resort area where ordinary people can't afford either to live or to visit.

A higher bet limit in Deadwood and at the reservation casinos will put high-stakes gambling within easy reach of everyone in South Dakota. Enabling gamblers to lose their money twenty times faster will only accelerate the problems that gambling has already brought us: increased financial and family stress, crime, and social service needs. Even more money will be spent on gambling instead of in local businesses that provide necessities for families.

What's at stake here is not just the amount that can be risked on the turn of a card, but the character of our state. Vote to keep bet limits at five dollars. Vote "No" on Initiated Measure One.

Submitted by: Kathleen Christopherson, PO Box 7822, Rapid City, SD 57709. Ms. Christopherson is a member of No On Higher Stakes.