Democrats and Republicans alike are grappling with how to handle a fund that only the governor has the power to disperse taxpayer dollars from.
The Employer’s Investment in South Dakota’s Future Fund, more commonly referred to as the Future Fund, has an uncertain path forward. Legislators are asking for more oversight into the dollars following expenditures by former Gov. Kristi Noem some lawmakers questioned.
The most recent effort is Senate Bill 1, which requires the Governor’s Office of Economic Development to create rules around the fund. All disbursements must be approved by the state’s Board of Economic Development, a board fully appointed by the governor. That bill is currently stuck in the Senate State Affairs Committee, following a tie vote due to one excused committee member.
Gov. Larry Rhoden also passed an executive order to place guard rails on the fund he controls. However, executive orders can be undone and are not codified law, which some legislators want accomplished.
Democrat Senate Minority Leader Liz Larson said it’s time to collaborate on the issue between SB 1 and the governor’s executive order.
“Those are both attempts to put on guard rails. So, I am calling all sides to listen to each other. You’re going to have to give a little bit. And come up with a reasonable solution to this that we can all get behind," Larson said. "And the consequences if they don’t could be quite dire for governors in the future. This is a pretty big economic development tool that we have in that we’ve been able to avail in the past. And I think we all need to have the civil conversation that ends in some type of compromise.”
Some believe a compromise is on the table for the supermajority Republican-led Legislature. That includes Assistant Majority Leader Rep. Marty Overweg. He said he likes the governor’s executive order, but wants the Legislature to have some oversight, pointing to boards like the Board of Internal Controls.
“This isn’t an attack on Gov. Rhoden at all. It’s just saying that as a legislative body, we need legislative oversight to where the people’s money is going, and I don’t think that’s too much to ask. It’s our job," Overweg said. "And the three branches have to work separate so we can work together. And I said in committee, just because something’s successful, that’s not an excuse to not do something right. So, I think we’re going to come to a compromise. I think we’re going to get something passed this year. I’ve got good feelings. Is it this bill? I don’t know. But I do believe we will.”
The Chair of the Senate State Affairs Committee said while SB 1 is "on the backburner" should be heard “soon.”
However, Gov. Larry Rhoden told reporters at a press conference Friday that he doesn't support the bill, calling it a "dramatic change" in the way the funds are utilized currently. He said the Future Fund "is not broke, we don't need to fix it."
"It's going the wrong direction. I think if the legislators want the governor to be more accountable, you don't put it in the hands of people who are unaccountable," Rhoden "By the future funds control being in the governor's hands, the governor is the one person that's accountable to all the voters of the state versus a board or a commission that hasn't."
Some legislators say a governor in their second term is unaccountable, pointing to former Gov. Noem's expenditures in her second term.
Rhoden told reporters he's "not going to address what [his] predecessor did and that past," but he's made it clear how he plans to utilize the Future Fund.
"I've made it especially clear in the executive order. That's part of the reason we did that executive order: to put in writing what I've already been doing in practice to provide that assurance, whether it's this term or my last term," Rhoden said. "Those'll be the standards I live by as long as I'm governor."
