MUNICIPAL LEAGUE: PASSING IM-28 COULD COST CITIES

PIERRE, S.D. – A new analysis from the South Dakota Municipal League estimates that if IM-28 passes, cities and towns would lose at least $51.5 million in sales tax revenue each year. The fiscal analysis includes IM-28’s impact on each municipality in the state.

IM-28 would reduce municipal sales tax collections in larger communities like Sioux Falls and Rapid City by more than 8 percent, according to the analysis. Smaller towns like Roslyn, Tulare, White River, and Wolsey would see losses above 40 percent. The highest estimated loss would occur in Bonesteel with a 59 percent reduction. The full analysis with city information is available at nosdincometax.com/impact.

“Local governments directly impact the daily lives of South Dakotans,” said Sara Rankin, Executive Director of the Municipal League. “IM-28 would create massive holes in local budgets used for police, roads, parks, and everything residents expect their community to provide. Simply put, IM-28 would be devastating for our daily lives.”

The language in IM-28 conflicts with South Dakota Codified Law 10-52-2, which allows cities and towns to impose a sales tax of up to 2 percent on the same items taxed by the state. This means that if the state cannot tax “anything sold for human consumption,” neither can a city or town.

The poor drafting of IM-28 is referenced in the Attorney General’s explanation of IM-28, which notes that “Judicial or legislative clarification of the measure will be necessary.”

An annual loss of $51.5 million would reduce funding to fix potholes, update infrastructure, staff libraries, operate pools, and maintain parks.

The estimated loss for each municipality was calculated by first aggregating all of the monthly sales tax reports for communities by SIC code from the Department of Revenue for 2023. Then a percentage was assigned to each SIC code to represent how much of the sales tax revenue generated by businesses under that code comes from consumables. Lastly, those percentages were applied to the 2023 tax data for each community in the state to develop the estimate.

“IM-28 would be a disaster for cities and towns,” said Harry Weller, Mayor of Kadoka and Municipal League President. “In my town of Kadoka, we’ll lose at least 24 percent of our sales tax revenue. Local governments run on lean budgets as it is. If IM-28 passes and we’re barred from collecting sales tax, we’ll have no choice but to increase property taxes.”

IM-28 is on the ballot as an initiated measure in the General Election on Tuesday, November 5, 2024.

 

JACKLEY JOINS SEVEN OTHER AG’S IN CHALLENGING BIDEN EXECUTIVE ORDER ON VOTER REGISTRATION

PIERRE, S.D. – South Dakota Attorney General Marty Jackley has joined Attorneys General from seven other states in challenging a Presidential Executive Order that would encroach on the States’ authority to regulate voter registration.

Executive Order 14019, signed by President Biden, creates a federal bureaucracy that serves as a voter registration organization. The Attorneys General argue that the plan creates a bureaucracy that violates the U.S. Constitution and exceeds the executive branch’s authority. The challenge states that voter registration is a state function and responsibility.

“This is an election integrity issue and another overreach by the federal government against the States,” said Attorney General Marty Jackley. “Federal agencies should not become instruments for the Biden Administration’s partisan voter registration drive.  South Dakota Secretary of State Johnson and County Auditors should not be subject to federal interference in their duties regarding voter registration and our elections.”

South Dakota Secretary of Monae Johnson also opposes the Executive Order. “I’m proud to represent South Dakota and join Attorney General Marty Jackley in support of this lawsuit and the fight to protect election integrity,” she said.

Other Attorneys General joining the challenge are from the states of: Iowa, Kansas, Mississippi, Montana, North Dakota, Oklahoma, and South Carolina.

 

GOED AWARDS ONE LOAN TWO GRANTS TO BUSINESSES IN YANKTON AND SIOUX FALLS

PIERRE, S.D. – The Governor’s Office of Economic Development Board of Economic Development has approved one loan and two grants during this month’s meeting, resulting in a capital investment of approximately $760 million and the creation of 664 jobs.

“We are excited to see local companies growing in South Dakota and we look forward to welcoming new businesses and job opportunities to our state,” said Governor Kristi Noem. “The Office of Economic Development is dedicated to making sure we set up future generations for success by supporting the long-term growth of these efforts.”

Community Coordinated Transportation Systems (CCTS), doing business as River City Transit, received approval for a South Dakota Works Loan of up to $375,000. This funding will be used to purchase a building for housing transportation vehicles and office space for a permanent location in Sioux Falls.

Two companies have been approved for the Reinvestment Payment Program.

Parker Hannifin of Yankton, a manufacturer and distributor of aftermarket filtration products for engine mobile applications, was approved for a Reinvestment Payment Program (RPP) of up to 50%, but not to exceed $100,219, of the state sales and use tax they will pay as a part of the project. The company plans to construct a new can-making line (CML) to meet increasing product demand. This line will produce steel cans for filters, and the project will create an estimated 14 new full-time positions.

SFC Global Supply Chain, Inc. will build a new manufacturing plant and regional office in Sioux Falls. They have been approved for an RPP grant of up to 100% of the state sales and use tax paid on their $750 million dollar project. The new manufacturing facility will produce Asian-style foods with state-of-the-art automated production lines, marking the company’s first facility in South Dakota and providing an estimated 650 full-time positions.

 

**UPDATED**  SCHEME TO DEFRAUD STATE BY FORMER STATE EMPLOYEE UNCOVERED

PIERRE, S.D. (Austin Goss / The Dakota Scout) – A former state employee who oversaw vehicle titling in the Motor Vehicles Division for South Dakota has been accused of creating fake titles and then using those to obtain fraudulent loans from banks.

Sandra O’Day allegedly used her position to create titles for non-existent boats, ATVs and recreation vehicles in order to carry out the scheme. But O’Day is not around to answer the allegations: She died earlier this year, leading to family members discovering irregularities in their mother’s finances and prompting them to alert the Department of Revenue, which oversees motor vehicle division for the state.

The Division of Criminal Investigation (DCI) launched an investigation into the allegations earlier this year — the second such investigation into fraudulent conduct by a state employee in a position of trust just this year.

The Dakota Scout spent weeks investigating the allegations into O’Day, confirming them in interviews with former colleagues, relatives and sources familiar with the investigation. Besides defrauding lenders, she’s accused of misusing her elderly mother’s finances in a pattern of behavior that lasted nearly a decade.

Over the course of about 35 years of employment in South Dakota state government, O’Day rose to the rank of revenue supervisor, a position where she monitored the state’s vehicle title program and coordinated with county treasurers.

It was from this position, and through another illegal act, that O’Day gained unfettered access to her parents’ finances.

According to sources, O’Day obtained power of attorney over her elderly mom by forging two of her colleagues’ names on a form required to obtain that authority, in or around 2015. From there, O’Day created fake titles for nonexistent RVs, boats, and ATVs. That likely contributed to her more easily avoiding detection because recreational vehicles are not included in a national database of vehicle information numbers (VIN) the same way that daily drivers like cars and trucks are.

The bogus titles were then used to get bank loans. Under the scheme, she is estimated to have pocketed around $500,000, according to a source familiar with the investigation.

“Everyone was shocked,” a former employee speaking on the condition of anonymity told The Scout. It’s a sentiment that many who worked around O’Day — who went by Sandy for short — and who attended her retirement party shared.

A bout with cancer forced her to retire from state government in October 2023. She ultimately succumbed to the disease, dying in February.

Only after O’Day’s passing did the alleged misdeeds come to light. Members of her family told The Scout they began to sniff out issues when they noticed money missing from their mother’s bank account. That led them to determine that O’Day had stolen it, and also taken loans out against vehicles that her mother owned.

O’Day’s family says they reported their findings to the Department of Revenue, concerned there could be other problems. That’s when the state discovered the illegal titling scheme and reported it to DCI, according to O’Day’s family members.

Attorney General Marty Jackley – who alluded to a probe involving a state office during an interview with SDPB Tuesday – told The Scout in a statement there is an ongoing investigation, but declined to get into specifics about details or what state agencies were involved.

It’s unclear if the state will be required to pay out a settlement to impacted financial institutions. Many of the banks impacted by the activity have obtained counsel and are communicating with state authorities about the investigation and recuperation.

A lifelong Pierre resident, O’Day was survived by her two sons and husband, Michael. Michael died by suicide in May, sometime after being interviewed by DCI.

More oversight failure in state government

The incident within the Department of Revenue is the latest example of state government entities failing to implement checks and proper oversight within their offices, say some observers and lawmakers. Jackley is currently prosecuting former Department of Social Services employee Lonna Carroll, who faces felony charges for stealing nearly $1.8 million in government funds intended to support foster care children. Somehow, Jackley alleged in announcing the indictment, Carroll obtained the ability to request and approve her own funding vouchers.

Though O’Day is different from Carroll in that she didn’t steal money directly from the state, the conditions that led up to the purported crimes gave her the opportunity to establish the fake titling scheme.

SD Department of Revenue office in Pierre, SD.One person with management experience at the Department of Revenue said that around the time before O’Day began creating fake titles, oversight processes had changed, potentially allowing her to avoid getting documents reviewed. Coupled with a period of extremely high turnover, the environment was ripe for O’Day to establish the scam.

The Department of Revenue declined to comment and denied an open records request for documents related to the incident, citing a statute that allows records that are the subject of a law enforcement investigation to be shielded from the public.

Beyond DCI, the incidents have been on state policymakers’ radar since at least June. It was then that the Board of Internal Controls — tasked with implementing and monitoring intra-department checks — heard from a Department of Revenue official about the “five control failures” within the Motor Vehicles Division.

“Our agency became aware of a situation in our Motor Vehicles Division,” a spokeswoman for the department told the committee, which is chaired by Bureau of Finance and Management (BFM) head Jim Terwilliger and includes State Auditor Rich Sattgast among its membership.

None of the committee’s seven members asked any questions about the failures during the meeting. BFM did not respond to questions from The Scout about whether members were briefed ahead of time on the Motor Vehicles Division’s failures.

For O’Day’s family, especially her mother, the betrayal and failure to stop it cut deep.

“The state obviously needs a better checks and balance,” a relative of O’Day told The Dakota Scout. “If they read documents they signed and notarized, this wouldn’t be happening.”

**UPDATE**

A News Release sent out by the South Dakota Attorney General was issued on Thursday morning, it reads as follows:

South Dakota Attorney General Marty Jackley issues this statement regarding the investigation into the actions of a former South Dakota Division of Motor Vehicles employee.

“The Attorney General’s Office was contacted in February of 2024 by the state Department of Revenue after the agency reported a former Division of Motor Vehicles employee had created a false/fraudulent motor vehicle title. The Department of Revenue and the Governor’s Office cooperated with the investigation conducted by the Division of Criminal Investigation (DCI).

The DCI investigation led to the discovery of 13 forged vehicle titles by the former employee between 2016 and 2023. The titles were used to secure almost $400,000 worth of loans. There is no evidence that others were involved in this criminal activity. Since the former employee has passed away, no charges will be filed.”

 

IOWA ANNOUNCES ADDITIONAL ASSISTANCE FOR HOMEOWNERS AFFECTED BY FLOODING AND STORMS

DES MOINES, IA – Gov. Kim Reynolds has announced some additional assistance through the state’s Disaster Recovery Housing Assistance Program. The awards will allow homeowners to begin rebuilding or be reimbursed for eligible expenses.

The program addresses unmet housing recovery needs outside the scope of insurance coverage or FEMA Individual Assistance. Eligible homeowners can receive up to $50,000 for repairs or rehabilitation. Eligible homes must be in a county approved for FEMA Individual Assistance. Locally that includes Buena Vista, Cherokee, Clay, Dickinson, Emmet, Lyon, O’Brien, Osceola, Palo Alto, Plymouth and Sioux counties.

Before applying for the state Disaster Recovery Housing Assistance Program, homeowners must first be registered for FEMA Individual Assistance and have been awarded some form of FEMA Housing Assistance.

More information about the Disaster Recovery Housing Assistance Program (DRHAP), including an eligibility precheck, is available at iowafinance.com/DRHAP. For information on other disaster-related programs and resources, visit disasterRecovery.iowa.gov.

 

VERMILLION POLICE ARREST MAN TWICE, ONCE FOR THEFT, ONCE FOR ESCAPE…AFTER GETTING HIT BY A CAR

VERMILLION, S.D. – A man in Vermillion was arrested after authorities say he stole money, got arrested, escaped from the police and then got hit by a vehicle while running from the law.

The Vermillion Police Department says at about 1:28 p.m. on Monday, Aug. 12 they responded  to the Casey’s General Store for a reported theft. The story goes that 27-year-old Harold Carter from Memphis, Tennessee went into the store and stole a “large sum of money.”

Police found Carter at a Vermillion residence near the Casey’s.

Carter fled from police but was arrested after a short foot pursuit. While waiting to be transported to the jail, police say Carter escaped from a patrol vehicle while still handcuffed.

Carter ran into Cherry Street where he was struck by a vehicle and taken into custody once again. Carter’s girlfriend, 28-year-old Audrey Taylor of Memphis, reportedly assaulted the driver of the vehicle that hit Carter.

Carter was taken to the hospital, in custody, as a precautionary measure to be examined for any injuries before being booked into the Clay County Jail.

Carter has been charged with grand theft, escape from custody and two counts of possession of stolen handguns. Taylor was charged with simple assault. Carter is being held in the Clay County Jail on a $100,000 cash bond while Taylor has been released on bond.