S.D. lawmakers ponder how to entice businesses

ArgusLeader.com  |  Written by Jonathan Ellis  |  December 9th

In the days after last month’s election, a group of economic development officials from across South Dakota sat down in Sioux Falls to take stock of their situation.

To them, things did not look good:

? Voters had just killed an economic incentive program championed by Gov. Dennis Daugaard and passed by the Legislature.

? Starting Jan. 1, the state no longer would have a program to encourage big-dollar business investment, either by attracting new businesses or fostering the expansion of existing businesses. Such a program had been in place for more than 15 years, and economic development leaders consider the tool crucial to competing with other states in luring new companies.

The economic developers meeting in Sioux Falls had plenty of questions. Why had the election on Referred Law 14 gone bad for them? What did it mean?

And, perhaps most important to them, what is next?

With a new legislative session only a month off, that’s a question that many who are in the business of attracting business are asking. A mad dash is under way among lawmakers, economic development officials and chamber of commerce operatives to answer it by coming up with new ideas for a program that will lessen the tax burden on businesses moving here or expanding.

“My only concern is that time is getting short,” said Sen. Corey Brown, R-Gettysburg. “I would have preferred to start work on it this summer, but we had to wait until the November vote.”

Without the large-project refund program, South Dakota is alone in this region, the only state without some kind of a incentive program to lure businesses. For example, Minnesota and other states have tax-rebate programs for businesses. Some rebates are targeted toward specific industries such as agriculture and renewable energy.

By the time the legislative session begins Jan. 8, there could be a number of proposals to consider, but most people involved with the process agree that for a new program to win approval, it will have to look far different from the one voters rejected last month.

“Most of the talk I hear is that we need to find some solution, but it’s very nebulous,” said Slater Barr, president of the Sioux Falls Development Foundation.“I haven’t heard anything specific being promulgated.”

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