Title: An amendment to Article XIII of the South Dakota Constitution authorizing the creation and administration of a trust fund for proceeds of the sale of the State Cement Plant.
Attorney General Explanation: The South Dakota Legislature has authorized the sale of the State Cement Plant for approximately $252 million dollars.
If adopted, Constitutional Amendment A places the net proceeds from this sale into a trust fund. The South Dakota Investment Council is required to invest the trust fund. Twelve million dollars from the trust fund will be annually transferred into the state general fund. The principal of the trust fund may not be expended except for this $12 million annual transfer. If there are additional earnings on the trust fund after the $12 million annual transfer, the Legislature is required to make a limited annual appropriation to support education.
If Constitutional Amendment A is not adopted, the net proceeds of the Cement Plant sale will be deposited in the state general fund.
A vote "Yes" will place the net proceeds from the sale of the State Cement Plant into a trust fund, provide for investment of the fund, and authorize annual transfers of money from the trust fund.
A "No" vote will result in the net proceeds from the sale of the State Cement Plant being deposited into the state general fund.
Pro -- Constitutional Amendment A
A "Yes" on this amendment will place more than $200 million from the sale of the state's cement business into an untouchable trust fund that will provide annual financial benefits for South Dakotans now and in the future.
Each year, a minimum of $12 million in interest earnings from the trust fund will be transferred to the state treasury to help hold down taxes. Any additional interest earnings may be appropriated in support of education and other state government agencies. After 2006, the Legislature is limited in the amount it can spend and the unspent interest earnings will be added to the trust fund so that more interest can be earned to hold down taxes and support education.
In summary, a "Yes" vote for this amendment will provide at least $12 million every year to the state treasury to help hold down taxes, more money to support education and additional interest earning opportunities for both the holding down of taxes and the support of education.
Submitted by: Governor William Janklow, 500 E Capitol, Pierre SD
Con -- Constitutional Amendment A
This proposed constitutional amendment does very little to support education, although it proclaims to do so. The net proceeds from the sale of the Cement Plant will be $227 million. Annual payments from the fund are limited to 5% of the fund value. Thus, the trust fund does not support education until after the fund grows to $240 million.
Even after the fund grows to $240 million, payments to education will be modest, at best. For example, if the trust fund grows by 8% per year, the total payment to education during the first 5 years is merely $3.5 million. In comparison, South Dakota presently invests more than $600 million for K-12 education every year. If the fund grows by 10% per year, total additional education funding during the first 5 years is only $6.7 million.
The mathematical formulas in this constitutional amendment will cause the fund to grow to excessive levels if the South Dakota Investment Council continues to achieve its historical returns on its investments. If the fund grows by 13% per year, it will contain almost $500 million in 10 years, yet can never reduce taxes by more than $12 million per year. Government should not stockpile public monies and continue to levy taxes.
Finally, the Constitution is not a proper place for mathematical formulas regarding disposition of state investments. Legislatures in the distant future must retain flexibility to provide answers to questions that cannot today be foreseen. Decades from now, the state's most important needs might be environmental, or agricultural, or medical. Since we cannot predict the future, we should not place mathematical formulas in the state constitution and limit the choices available to future generations.
Send the legislature back to the drawing board. Tell them to write a law that protects the principle and uses the income wisely.
Submitted by: Former Representative Mike Wilson, 301 Alta Vista Drive, Rapid City, SD 57701. Wilson represented District 32 in 1999-2000.
Title: An amendment to Article XII of the South Dakota Constitution authorizing the creation and administration of trust funds for health care and education.
Attorney General Explanation: Constitutional Amendment B establishes two trust funds. The health care trust fund would be established with funds from the intergovernmental transfer fund. Money in this trust fund is dedicated to health care related programs. The education enhancement trust fund would be established with present and future tobacco settlement funds, proceeds from any sale of the right to receive payments from the tobacco settlement, and funds in the youth-at-risk trust fund. Money in this trust fund is dedicated to education enhancement programs.
The Legislature may appropriate additional money into these trust funds. The South Dakota Investment Council is required to invest these trust funds.
Beginning in fiscal year 2003, the Legislature is required to distribute money from the trust funds. A three-fourths vote of the Legislature is required to appropriate the principal of the trust funds, or to use the trust funds for other purposes.
A vote "yes" will establish the health and education trust funds, provide for investment of the funds, and authorize the distribution of money from these trust funds.
A vote "no" will leave the Constitution as it is.
Pro -- Constitutional Amendment B
South Dakota has received two windfalls with intergovernmental transfer funds from the federal government and funds from tobacco companies as the result of a national lawsuit.
There are tremendous pressures to spend these monies until they are gone forever and not reap permanent benefits for the people of South Dakota.
The Governor suggested and the Legislature agreed that these monies should be tied up into trust funds so that the people of South Dakota will receive FOREVER the benefits of the interest earnings from the trust funds for education and health care.
A "Yes" vote on Constitutional Amendment B will create the Education Enhancement Trust Fund and the Health Care Trust Fund. The earnings from these two trust funds will then be spent by the Legislature each year on education and health care programs that benefit South Dakotans.
Please vote "Yes" on Constitutional Amendment B.
Submitted by: Governor William Janklow, 500 E Capitol, Pierre, SD
Con -- Constitutional Amendment B
Amendment B is a proposal to create two separate trust funds.
These two separate and distinct issues are joined together in Amendment B, forcing the public to cast but one vote.
The trust funds are unprotected in stark contrast to the existing school trust fund which is a permanent fund, the principle of which can never be invaded. Amendment B trust funds can be invaded by a 3/4th vote of the Legislature, thereby removing any permanent protection and subjecting them to the political whims of future Legislatures.
The public has not been given the opportunity to have input on this important issue. The Legislature was given its first view of this proposal on the next to last day of Session. Changes were made to this bill and a vote was taken in minutes. There remain technical problems with Amendment B:
Our Constitution is the cornerstone of our rights. Amending it is a serious matter which requires careful and deliberate thought. It should not be dealt with in the last minute, behind closed doors, and exempt from public scrutiny and participation.
We need to take time and address these issues in a responsible manner. Vote NO.
Submitted by: Senator Patricia de Hueck, 906 N. Madison, Pierre, SD 57501. Senator de Hueck represents District 24.