GOVERNOR KRISTI NOEM ANNOUNCES CORNERSTONES OF GOVERNMENT ACCOUNTABILITY

PIERRE, S.D. – Governor Kristi Noem has signed an executive order aimed at enhancing financial accountability within state government.

Noem says the enhanced measures will strengthen the state government’s financial infrastructure and make sure taxpayer dollars are being used responsibly. She says the enhancements will also help “guarantee that state employees are responsible stewards for the people that they serve.”

The four cornerstones of Noem’s approach to “fiscal fortitude” are:

Additional annual state employee trainings as outlined in Executive Order 2024-07;

Enhancements to policies, procedures, systems, and technology to strengthen internal controls of taxpayer dollars;

Increasing resources to assist with the mission of the State Board of Internal Control – Governor Noem has already taken action and hired one additional Internal Control Officer; and

A legislative package for the 2025 legislative session, including clearer and stronger accountability measures.

Noem says the upcoming implementation of the new BISON state accounting system and the 605 Drive motor vehicle system will provide additional safeguards to protect taxpayer dollars– safeguards that are not possible using the state’s current, aging technology systems. She says several actions have already been made as state agencies are onboarded through the Board of Internal Control process. The State Board of Internal Control was created in 2016 with the goal of establishing and maintaining guidelines for an effective system of accountability to be implemented by state agencies, a code of conduct for use by state agencies, and a conflict of interest policy for use by state agencies defines an internal control as “a process that integrates the… procedures, systems, resources, and efforts of an organization and that is designed to detect and prevent financial malfeasance.”

 

 JOBS AND MONEY FOLLOW NEW AGRICULTURAL PROCESSING IN SOUTH DAKOTA

MITCHELL, S.D. (Bart Pfankuch / South Dakota News Watch) – Several cranes tower above a busy construction site along state Highway 37 south of Mitchell where work is rapidly progressing on a $500 million grain plant that will be the latest addition to South Dakota’s growing agricultural processing industry.

For generations, the state has served as an agricultural production hub in the Great Plains, growing millions of bushels of corn and soybeans and raising millions of cows and hogs annually. For many years, most of the state’s high-output food producers shipped their goods to be processed at plants elsewhere.

As those commodities left the state, so too did the businesses and jobs needed to process agricultural products into their final form. Rural communities in South Dakota lost the potential for growth in local employment, housing and economic development generated by agricultural processing plants.

“Historically, for some reason, here in South Dakota we’ve been content to raise commodities — corn, soybeans, cattle and hogs – and ship them out of state for processing,” said Scott VanderWal, president of the South Dakota Farm Bureau.

But over the past 30 years, and with increasing frequency in recent years, the state agricultural industry has begun to take advantage of what insiders refer to as “added value.” The term refers to the ability of those in the agriculture industry to generate more revenue from a single product. For instance, growing corn and then using it for food products, animal feed and in ethanol production.

By processing soybeans closer to where they are grown, South Dakota farmers can grow and sell more grain, which leads to spin-off revenues for a host of businesses, including in transportation, fuel, feed and machinery.

“We’re now finding out that we can make a little more money, generate local economic activity and create more jobs if we start adding value to the things we produce,” VanderWal told News Watch.

Details reveal size, scope of new plant

The High Plains Processing plant, now under construction 2 miles south of Mitchell, is being built by South Dakota Soybean Processors, a farmer-owned business that has a soybean plant in Miller and another in Volga, where the company is headquartered.

CEO Tom Kersting said the new plant will provide good-paying jobs now and well into the future and create new revenues for a host of businesses and farmers throughout the region. It will also generate significant new property taxes for local governments and sales taxes for state government, he said.

Construction costs are estimated to be about $500 million, and the target date for operations to begin is October 2025, Kersting told News Watch. The plant will be able to process soybeans as well as sunflower seeds and other grain products if market conditions warrant, he said.

Finished products will mainly include oils and animal feed. The plant will have capacity to process 100,000 bushels of soybeans a day (about 35 million bushels a year), which makes it the second-largest plant behind the AGP soybean plant in Aberdeen, which has an annual capacity of 50 million bushels.

The Mitchell plant has about 300 construction workers on site now and expects to employ 75 to 85 full-time employees once operational. The expansion will create another dozen or so positions that will work at the company offices in Volga in support of the plant.

Kersting said the addition of new, consistent capacity for grain products at the Mitchell plant should not only stabilize but also increase the prices paid to local soybean and sunflower farmers.

“Without it, you’d be much more dependent on the export markets for pricing,” he said. “By having the demand locally, and having it year-round, there’s an opportunity for higher prices for farmers.”

In addition to oils, used in biofuels and in some food products, the plant will also produce seed meal that is used to feed animals, mainly hogs and poultry, he said. Kersting said that once fully processed, a 60-pound bushel of soybeans will yield about 44 pounds of meal feed, 11 pounds of oil and 4 pounds of husks, with a slight amount of moisture loss making up the final pound.

The new plant will be strategically located just 2 miles from Interstate 90 and within shouting distance of the Burlington Northern Santa Fe Railroad line, Kersting said.

Benefit to Mitchell and well beyond

The excitement over the plant’s potential for economic benefits is palpable even in a brief conversation with David Lambert, regional development director for the Mitchell Area Chamber of Commerce.

“We’re just tickled,” he said. “From our perspective, we feel that the impact is going to be huge.”

Lambert said the plant’s economic impact will be felt most in Mitchell, where he expects many workers will live and spend money. The plant will create new revenue opportunities in several economic sectors, including housing, grocery, retail and transportation, he said. Nearby cities and towns will also see benefits, not only from increased capacity to sell grain but also in the same tangential ways Mitchell will benefit economically, he said.

The regional farm economy will also see a big boost, Lambert said. For instance, the new demand for soybeans created by the plant could raise the price of beans by 20 cents per bushel, which could generate $6 million a year in new income for area grain producers, he said.

“We know that when farmers have money, they spend that money, and they tend to do it locally,” Lambert said. “So the regional impact is so huge, and that is even after you take into account the 75 new, well-paid employees with an annual payroll over $4 million.”

Lambert said the chamber has already heard from businesses directly or indirectly related to the grain industry that are eyeing a potential move to or expansion within the regional Mitchell market.

“We’ve already started to see some new opportunities from folks who want to take advantage of the economic activity that will be created by the plant,” he said.

A value-added revolution in South Dakota

The South Dakota processing expansion began in earnest roughly 35 years ago when Poet biofuels began production of ethanol from corn in Scotland in the late 1980s. Since then, ethanol production has expanded to nine companies processing 740 million bushels into roughly 1.3 billion gallons of ethanol worth about $3 billion annually.

South Dakota could see a huge economic benefit from the $1 billion Net-Zero 1 plant proposed by the company Gevo for a site east of Lake Preston, where corn would be processed into sustainable biofuel for jets. Officials from Colorado-based Gevo said the proposed plant, which recently received a $1.46 billion commitment from the Department of Energy Loan Programs Office, could create thousands of jobs once operational.

The state has also seen rapid expansion of milk processing, with new or expanded cheesemaking plants in Milbank (Valley Queen Cheese), Brookings (Bel Brands) and Lake Norden (Agropur). The increased processing capacity has allowed the state’s population of milk cows to more than double over roughly the past decade, from 91,000 cows in 2012 to about 210,000 in 2023, according to the U.S. Department of Agriculture.

According to the USDA, South Dakota dairy farmers produced 4.5 billion pounds of milk in 2023, up from 3.1 billion pounds in 2020 and 2 billion pounds in 2013.

Agricultural processing plants serve as major employers in several South Dakota cities. The Dakota Provisions pork and poultry plant in Huron has variable employment that can range from 600 to 1,000. The state’s largest soybean plant, the AGP plant in Aberdeen that opened in 2019 at a cost of $300 million, has about 60 full-time workers.

In addition to jobs in the plant and an increase in production capacity for individual farmers, increased processing of commodities closer to where South Dakota farmers produce them creates jobs and revenue for local trucking companies, parts and maintenance firms, fuel providers and sellers of machinery, VanderWal said.

“We’re providing jobs or creating economic activity because those processing plants need supplies and parts and people to run them, and all those things that go along with that,” he said.

VanderWal said recent efforts to expand in-state processing of beef cattle, as reported by News Watch in 2023, would also generate new income and reduce costs for South Dakota ranchers, who raised 3.5 million cattle and calves in 2023, according to USDA data.

On Nov. 13, 2024, a 30,000-square-foot beef plant proposed for a site just north of New Underwood in Pennington County was awarded a $600,000 South Dakota Works Loan from the Governor’s Office of Economic Development for first-year operational funding.

“In the cattle industry, especially years ago, most of our feeder cattle actually got shipped out of state for feeding even, and then further processing,” he said. “We’ve put a lot of effort in the last few years into feeding them here. So we’re using our own feed stuff, so corn, basically, and silage and things like that. So then the next step to avoid having to haul them so far when they’re finished and ready for market, is to process them here.”

 

BIG SIOUX RIVER BUFFER PROGRAM GROWS WITH HIGHER LANDOWNER PAYMENTS

PIERRE, S.D. (Joshua Haiar / South Dakota Searchlight) – A $3 million state effort to help landowners keep their agricultural runoff out of the Big Sioux River has experienced a spike in enrollments since the program began offering higher payments.

The Legislature authorized the Riparian Buffer Initiative in 2021 with a spending deadline of June 30, 2025.

The river is polluted with dissolved soils, agricultural chemicals and livestock waste beyond levels safe for uses including fishing and swimming. The program pays landowners to leave a vegetated area along the river or a tributary, which helps to filter out pollutants before they enter the water. Buffer strip root systems also prevent erosion along the banks.

However, nobody had signed up for the program by January 2023.

“The feedback that we got back was that we’re not paying enough to really move the needle,” Hunter Roberts, secretary of the Department of Agriculture and Natural Resources, told lawmakers at the time.

So, the department doubled incentive payments that year.

Under the old rates, a 50-foot wide, half-mile-long buffer under a minimum 10-year contract would have yielded a total payment of about $5,000 for cropland and $1,300 for pastureland. Under the new formula, the rates for the same examples increased to about $13,000 for cropland and $3,400 for pastureland.

Since then, interest in the program has increased.

According to the Department of Agriculture and Natural Resources’ 2024 progress report, the department had enrolled 35 total projects as of late October, covering 608 acres of buffers along 218,556 linear feet of the river.

The department estimates that will result in annual reductions of 1,593 pounds of nitrogen, 332 pounds of phosphorus and 206 tons of sediment entering the river.

The project has spent $1.17 million of its $3 million in funding. An additional $800,000 has been earmarked for 26 buffer projects in progress, covering another 382 acres and 143,000 linear feet of the riverbank. The report emphasizes the department’s intent to fully allocate all remaining funds by the program’s deadline of June 30, 2025.

The report notes that partnerships with the South Dakota Game, Fish, and Parks Department, Ducks Unlimited, Pheasants Forever and other conservation organizations have been instrumental in promoting the program.

While the state program has made strides in increasing participation, it has also faced questions regarding its overlap with existing local initiatives. Similar projects established by the East Dakota Water Development District, based in Brookings, also offer buffer zone support along the river. Those projects’ administrators said they had enrolled over 100 landowners and nearly 3,600 acres, totaling almost 89 miles of stream protection, as of November 2023.

 

SOUTH DAKOTA TEACHER SALARIES INCREASE NEARLY 6% BUT GAPS IN PAY AND STATE FUNDING REMAIN

PIERRE, S.D. (Makenzie Huber / South Dakota Searchlight) – The average South Dakota teacher salary increased by $3,125 between 2023 and 2024, or 5.87%, according to a recent state Department of Education report. Average teacher compensation, which includes salary and benefits, increased by 5.66%.

That’s enough to outpace the past year’s inflation rate and meet requirements set forth by the 2016 Legislature, which aimed to increase teacher salaries. The state ranked last in average teacher salary that year and currently ranks 49th, according to the National Education Association.

Despite the recent increases, the average South Dakota teacher’s purchasing power is still less than it was in 2017, when factoring in inflation since then. It also comes in below the 7% increase in state education funding lawmakers allocated for fiscal year 2024, which ran from July 1, 2023, through June 30, 2024.

South Dakota’s average teacher salary in 2017 was $47,096. According to the U.S. Bureau of Labor Statistics, that has the same buying power as $60,404.51 in June 2024, which was the end of the state’s fiscal year. The actual statewide average teacher salary in 2024 is $56,342.

Statewide average teacher compensation, which includes salary and benefits, increased from $60,687 in 2017 to $72,615 in 2024 — an increase of 19.66%.

This is the last year school districts will abide by the 2016 rules, which said school districts had to report average compensation at or above 2017 levels. All school districts met the requirements, based on the School Finance Accountability Board report presented at the board’s Friday meeting.

This year’s compensation sets the baseline for the teacher compensation accountability model passed by the Legislature last winter.

Beginning in July this year, the start of fiscal year 2025, each public school district must increase its average teacher compensation by at least 97% of the increase in state education funding. The requirement does not include additional money for schools beyond the regular, annual increases in state funding.

The Legislature increased state education funding by 4% in March, meaning districts must increase their average teacher compensation by nearly that much by next year to comply.

Beginning July 1, 2026, each school district must also pay each teacher at least the state minimum salary. That’s set at $45,000 this year and will increase each year equal to the increase in state education funding.

Opponents of the legislation were skeptical the new plan will provide enough flexibility for school districts and said it will have unintended consequences due to declining enrollment in public schools across the state, especially rural areas. As enrollment decreases in school districts, it means less state funding for districts to pay for salary increases and other costs.

Between 2023 and 2024, Plankinton reported the highest percentage increase in average teacher salary, from $49,542 to $59,098, or 16%. Six school districts saw a decrease in average teacher salary from 2023 to 2024: Pierre, Tripp-Delmont, Eagle Butte, Rosholt, Parker and Doland. Decreases in the average can be attributed to teacher retirements and younger, less experienced teachers being hired at lower salaries. The average teacher salary for each district was still above 2017.

Rapid City teachers have seen the lowest average teacher salary increases since 2017 at 5.24%, while Plankinton and Elk Mountain saw the highest average teacher salary increases during that period at 36.5% and 54.4%, respectively.