[Chart 1—The State of the State]

Governor William J. Janklow’s
State-of-the-State Address
Transcript
State Capitol, House Chambers
12:05 PM, January 13, 1999

Thank you. Thank you, Ladies and Gentlemen, and Lieutenant Governor Hillard, Chief Justice Miller, Mr. Speaker, you Ladies and Gentlemen of this Legislature, other Constitutional Officers, the Ladies and Gentlemen of South Dakota. Thank you so much for that introduction for all the other elected officials and myself.

Today as I come forth to give the annual report of the State-of-the-State to you, Ladies and Gentlemen of the Legislature, as you’ve just convened, I’d like to start off to note the passing of a person that has truly been one of those individuals whose life made a difference in South Dakota.

We received word yesterday that Ted Hustead, the originator of Wall Drug, had passed away. I say this realizing that everybody who’s lived has contributed something, and their lives have been unique. But, Ted Hustead was what you really call an entrepreneur. He’s a guy that figured out that free ice water could turn you into a phenomenal success in the middle of a semi-arid desert way out in the middle of someplace. He’s a fellow who understood that a tourism business where the locals also shop is the kind of business that can be a twelve-month-a-year success. He’s a fellow who understood his roots was as a drug store, and, as a result, he never ceased to sell prescriptions and be a family drug store. He’s a fellow who understood that overpricing visitors can never get you repeat business or a good reputation. He started out at nickel coffee, and he ended at nickel coffee. He started out giving the men and women in uniform free doughnuts, and he finished his career giving men and women in uniform free doughnuts.

I can remember, as a little kid living in Germany, when we went over to one of the Tank Battalions at Stuttgart one time and a sign was there—Wall Drug—and it told you how far. I remember, as a kid, a picture of the Korean War on one of the hills and a sign—Wall Drug—and how far it was. And of recent vintage, I remember Desert Storm, when we saw in the media the picture that depicted, again, a sign, and it said Wall Drug, how many miles. As a sign along the highway once said, very few of us have had the gall over our lifetimes to bypass Wall. We note his passing only because Ted Hustead was one of those important people that really made a difference in the development of tourism in South Dakota.

I come to you, Ladies and Gentlemen, and report today that with respect to areas where we’re trying to move as a Legislature and as an administration, our work’s not done, but we’ve got good things to report.

In the area of children-and I realize it’s so politically easy and convenient to talk about kids and children, and use them for rhetoric-but the reality of the situation is that we in South Dakota, all of us, really recognize our responsibility to kids who need our help. Thank God, most of them don’t need unique kinds of help that you and I can bring. It’s those few that do where we need to focus our attention and our resources.

We can argue all we want about the criminal law, but I can tell you all, Bill Janklow has always understood the public is fed up with people who steal their property. Fed up with individuals who put you in danger or hurt you. Fed up with individuals who are dopers. Fed up with individuals who cause trouble in our society. But, if you go back to 1972, we had about 250 men in our prison system—today, over 2,000 men in our prison system. You go back to the early ’70s; we had about four women—today, over 150 women in our prison systems.

Something’s changed. Something’s different. Maybe it’s the way people got started in life. I don’t know.

[Chart 2—Family Status of Juveniles Put Into the State’s Custody]

I can tell you that one of the phenomenal statistics that I became aware of yesterday—I had it put on a chart just yesterday to show all of you. In the state institutions this morning, in the state institutions this morning where we have juveniles in our custody at Plankinton in the prison or at Plankinton in the other facilities or the girls LaMont facility in the Custer State Park or in the Boot Camp or in the other Custer facility, the Custer Group Home, 82 percent of all those kids come from a foster- or a single-parent home. Only 18 percent come from a two-parent home. And, I say this, please, not casting any aspersions on any one single-parent home. I’m saying these statistics speak for themselves and tell us the impact that some of the actions sometimes we take as adults can have on little children.

Last year, this Legislature, at our request, made great strides under the leadership of Scott Eccarius and some other legislators, Barb Everist and others. All of you passed legislation that gave us tools that we can use to start to deal with Fetal Alcohol Syndrome and Fetal Alcohol Effect. In Todd County, South Dakota, over the past five-year period of time, in five years, 40 percent of all the children born were Fetal Alcohol Syndrome or Fetal Alcohol Effect. My friends, that will change an entire race of people. That will literally change an entire race of people.

I can report that the Cheyenne River Sioux Tribe and the Sisseton-Wahpeton Sioux Tribe—both those tribes—provided leadership, actually are ahead of the State of South Dakota in some of the programs they have in trying to address and deal with these types of problems. And the average Fetal Alcohol Syndrome child, over the course of their lifetimes, requires approximately $1.5 million worth of taxpayer subsidized assistance as they live. We’ve got courses that are going under the leadership of Loila Hunking and the folks in Social Services, Pat Monson, and the others. We’ve got programs that have been initiated that are, in a greatly expanding way, utilizing a Bush Foundation Grant and State resources, to teach daycare competence to more and more individuals.

As I said when I gave the Budget Address, in the perfect world that we could all live in, that I grew up in, we had parents at home with children. That’s the way I’d like it to be, but Bill Janklow has to take the world as he finds it and deal with it. And, the world that I find is a world where, by ever-increasing numbers, by huge percentages, parent or parents are in the labor force. They’re not at home. They’re not at home when kids go to school. They’re not at home when kids come home from school. And, parents come home tired from work, as kids come home from school, and that’s not a good mix for being able to do the things that you have to do to further develop the nurturing and the relationships. So whether Bill Janklow likes it or not, increasing numbers of our children are going to daycare. So, it’s in all of our selfish interests to make sure that those daycare providers that are interested, having increasing levels of competence in dealing with this type of stuff.

I talked before, in my State-of-the-State last year, about the impact that music has on children. Still, people don’t know why, but, I can tell you, in ever-increasing amounts of research coming to the forefront everyday now, it’s very, very clear that subjecting children—even before birth, even in utero, but after birth —for the first two years, to classical music, especially Mozart, has a very material impact in terms of the percentage by which they’re improved in their mathematical skills through life. This is a no-brainer for us to do that. This doesn’t cost any money. We’re going to see to it that every person that has a child in South Dakota, just like they get that card from Mary Dean and I, that are willing, will get a CD from the government that plays classical music. As a matter of fact, what they found out is to play Mozart’s music for one hour to adults raises an adult’s IQ anywhere from 10 to 15 points for up to an hour. We’re all going to listen to Mozart every morning during the Legislative Session.

I attended a conference with Lieutenant Governor Hillard and Loila Hunking and Deb Bowman and Bonnie Bjork in Ohio. The noontime speaker, one of the really premier researchers in America on the development of children and their minds—the human mind—talking about how we’re all born with 100 billion brain cells, and every day so many million are being developed or lost to effective development. Every day millions are either developed or lost. Some things you can learn later on, there are some things you can’t learn later on. But, the noontime speaker told us that if you ask me the definition of a neglected child, I’ll tell you that it’s one who’s not being read to 20 minutes a day at the age of six months. This is something, again, that doesn’t cost taxpayers any money. It’s something that we can all do if we understand. And, most people, once they understand, will do it. I’ve never met anybody that wasn’t ill that wanted to injure a child, that wanted to neglect or hurt a child. So many people injure them or neglect them because they don’t know any better. Where they don’t, it shouldn’t be our job, but it’s going to be our job.

I can report to you that we’re up to 70.9 percent in immunizations. This is the fourth year in a row we’ve had a significant increase in the age-appropriate immunizations for children under the age of two, which is the most crucial time that we deal with. With the 70.9 percent, our registry is now in place, we are the first state in the nation to have a registry that keeps track of all of this immunization information in a transient society where one of out of every five South Dakotans move every year. We’re beginning to already see the beneficial impact of the program that we asked that you Legislators fund to increase the Title XIX medical coverage for those children who lived in homes that couldn’t afford medical coverage, meeting certain guidelines. A program that we’re asking to increase again this year, as you know, from the budget. Then again, all of this together is starting to have a very beneficial impact on the children of the state.

I know it was reported in the press, after having visited with the members of the press a couple days ago, that we are, over the course of this next year, going to very seriously put together a quality study to take a look at whether or not we should recommend to you, Ladies and Gentlemen of the Legislature, that we provide for pre-school—which is age four, the year before kindergarten—for pre-school for the children of South Dakota. It would be different than our other K-12 education. It would involve about 12,000 children the first year and then 12,000 each year thereafter. What it would really do is expand the K-12 system by about 12,000 statewide. I realize that most school systems could accommodate them now. In 1972 we had 185,000 kids K-12 in this state. Today, we’ve only got 135,000. So, someplace out there we’ve got 50,000 places where we could put people. I know there are some systems that are full, but most aren’t. But, if we were to set up a system where the parents who are paying for care now were to continue to pay, based on their ability to pay, and the taxpayers only picked up the difference for the four-year-olds, and recognizing that people don’t have to have teaching certificates to be good parents and to do basic training and cognitive skills and read to them and play music and games and things like that. We may be able to really find something that would be a fabulous opportunity for the development of children in our state.

I can tell you that we’re really working very hard at instituting parenting courses. I’m cognizant again of, and I understand, that government shouldn’t go around telling people, deciding who is and who isn’t a good parent, but there are some that are such lousy parents we all agree on it. There’s no question.

Imagine that. Even a kid that’s been in trouble, a 15-year-old that’s been in trouble, and a judge has taken them from their home in what’s called an out-of-home placement. Imagine walking away from that child as a parent or a grandparent or a brother or sister, and then in four months for Boot Camp or up to seven months for the girls, you never write your own child. You never call them. Or, you never go see them.

It isn’t hard to figure out what the problem is, is it? It isn’t hard to figure out what’s wrong with the kid. It’s the parents that are the problem. It’s the parenting that’s the problem.

We are teaching, in our state facilities, a parenting course based on the Boys’ Town model, to every person that’s in our juvenile facilities. They must take the course. And, I don’t know the Boys’ Town model, but everyone that I deal with from the CASA (Court Approved Special Advocate) groups to some 4-H groups, to the Extension folks at SDSU that I have visited with, from home economists to our state officials, all tell me, almost unanimously, the Boys’ Town model is a great model for a parenting course. We’re also requiring that some of our TANF (Temporary Assistance to Needy Families) recipients, some of our public assistance recipients, as a condition of receiving their welfare check must take a parenting course.

You, Ladies and Gentlemen, passed a law last year that said any human being in this state convicted of domestic violence, beating up other family members, threatening them, or intimidating them, will be required as part of their sentence, to take a parenting course. And, I can tell you that we’re increasing—we actually don’t need laws on this—we’re increasing our vigilance and our efforts and trying to make sure that people who bring babies into the world, provide, to the extent that they can afford it, the fiscal support for those children, so the tax payers just don’t get stuck with babies that somebody doesn’t want. I can’t help it if two parents don’t like each other, but once they’ve done the acts that bring about a child into the world, they have responsibilities as parents, irrespective of whether or not they like each other. And we can’t make them like each other, but we can make them pay, to the extent possible, for the support of their children.

It’s incredibly important, and we’re going to work very hard over the course of the next year to try and get the faith-based institutions, what they call in the modern world, faith-based institutions-I used to call them the churches, but we’re not allowed to use that phrase anymore. It’s not correct, so we need to get all of you, Protestants, Catholics, Jews, Native Americans, Moslems, whatever, even you who are nonbelievers in anything would never ever say or think that you don’t believe in helping children. It’s universal. Honestly, folks, this government can’t do it. It doesn’t make any difference how much money Bill Janklow would ask you to tax the citizens for additional funds. It doesn’t make any difference how many new programs we come up with. Government can’t raise kids. We can put a roof over their head and we can give them medical care, we can educate them and we can deal with nutritional things, but you can’t pull them into your bosom. You can’t hug them. You can’t kiss them. Only human beings can do that, and the government’s an abstract thing. So I can tell you, we need your help. Whether you’re a Rotary Club or a Kiwanis Club, whether you’re a Zonta Club, whether you’re a Catholic group, a Presbyterian group, or a Weslyan group, it makes no difference to us. We need your help. So, I guess I’m asking one more time, If you can find it in your hearts, if you can find it in your time, if you can find it in your beliefs, would you please come forth to offer assistance to these human beings from in utero babies to those that are ready to assume adulthood. We need them across the whole broad spectrum. And look, we’re only dealing with a couple thousand kids. Now, that’s a huge burden for us fiscally, but we’re only talking about a couple thousand and between 700,000 of us, we can figure out how to do this. We can do it. So, I guess I’m asking one more time to have people step to the forefront and whatever organization or as individuals to whatever extent you feel comfortable, all I want you to know is one thing. Don’t ever feel we don’t have a place where we can make you useful. I’ll leave it with that. Whether it’s coming to an institution where children are at, whether it’s dealing with those that are on probation, or those that are on parole, or those that are being mentored in aftercare, whether it’s those who come from homes where they have been found, through the school social worker program, or other types of programming that aren’t in trouble with the law, where nobody’s in trouble, where a family’s under stress and needs help, we just plain need help. Folks, we can accomplish this in a year. This isn’t a lifelong program. We can do this in a short period if we really all get together.

I’d like to show you a chart that deals with the public schools of South Dakota. I realize--as I say every year, and I’m not going to quit until I’m out of here, so you’re going to get stuck listening to three more of these speeches after today. But, I’m sick of drugs, and I’m sick of druggers and the people that give drugs to kids. I think I’m about the only one, but I get re-elected so there’s voters out there that agree with me. They’re out there.

[Chart 3—Cleaning up Schools with Highway Patrol Canine Teams]

These are the school systems of South Dakota. These are school district boundaries. If it is in white, we have not been to the school system. If it is in yellow, we’ve been to the school system. And, if it is in red, we have arrested a kid in the school system for having drugs. This is not a big city problem. This isn’t Sioux Falls’ and Rapid City’s problem. Where you see a red school district, we have arrested and removed a student from the school for being a drugger.

But I’ll tell you a bigger statistic. Twenty-two schools in 341 schools searched. Now the reason it is 341, we have 520 public school buildings in the state. We have 176 school systems, but some schools have the dogs coming through and checking every month or two, so each time they do counts as another school searched. But in school districts, we have searched 102 out of the 176, but we found drugs in 18. That’s virtually one in five. That’s 20 percent. That’s one heck of a problem.

We’re going to be presenting legislation to you asking you to strengthen these laws. We’re going to ask you that any person found with drugs will be required by law to do a minimum of 30 days in confinement. I fully realize we have 67 state’s attorneys out there, all exercising their discretion. Then we have three dozen circuit court judges, each exercising their own discretion; but we’re going to be asking that the Legislature pass laws providing that anyone found with drugs will be confined for a minimum of 30 days.

Bill Janklow speeds when he drives—shouldn’t, but he does. When he gets the ticket he pays it, but if someone told me I was going to jail for two days for speeding, my driving habits would change. I can pay the ticket, but I don’t want to go to jail. It is that simple, and we’ve tried everything else.

Those of you who think the system is working, don’t vote to change anything. If you are really happy with the way it is, don’t vote to change anything. But if you think there is something else we can do, let’s try it. And consistent with that, I’m willing, as part of any program, to declare an amnesty for druggers. I always hear from people, Well, we’ve got to treat them. Fine. Let’s set a date certain that we start and finish and tell every single human being in South Dakota that says they have a drug problem to step forth with total immunity, a total amnesty, to get treatment, with no fear of recrimination or criminal prosecution or a besmirched record. Let’s work with them and give them the treatment they need to get it cleaned up. But, if and when they don’t, then let’s lock them up. It’s that simple.

We need to strengthen, we truly need to strengthen the laws dealing with sexual predators on children. Folks, I know we read about this stuff in the newspaper and it is just another news story. We don’t like it. But, I spent part of this morning on the telephone with a mother from Mission, South Dakota. She was a young girl when Mary Dean and I lived in Mission that now is a parent in the community whose 14-year-old girl was brutally raped twice on New Year’s Day. I wish everybody could listen to that parent talk. I wish they could listen to her voice quiver. I wish they could listen to her cry on the telephone, and then you’d understand why I feel like I do, because Bill Janklow isn’t just trying to be ornery when he deals with this stuff. I listen to the real people of South Dakota and the problems they have.

When someone decides that they are going to go out and play with a three-year-old child or a five-year-old child, they’ve made a conscious decision that they don’t want to live in a civilized society anymore. We should put them in a cage like we do a dog that bites people. It’s that simple. A kid will heal faster from a dog bite than they will from a brutal sexual attack and assault, so the least we can do is treat somebody that does that like a dog. They’ve made the decision to act like one. So, we need to strengthen those laws. We really need to strengthen those laws to protect kids who can’t protect themselves. There isn’t one of us that wouldn’t step into a breach like that if we saw something like that happening and try and do something about it. Well, you and I have the opportunity. In the role that the citizens of this state have given to us, we have the opportunity to do something about it. I’m asking that we do something about it.

I can tell you that over the course of the last year, we’ve had two million hours of community service performed by the inmates in the state prison system. Our program of putting inmates to work, when they’ve earned the right, putting them outside the prison walls to work-whether it is wiring schools or working at the State Fairgrounds, or working in the State Capitol grounds and its complex or the Yankton State Hospital or the University of South Dakota or at Farm Island with Game, Fish and Parks or in Custer State Park or wherever-is a model of its kind for anybody. We have very few problems with the structured lives we give these inmates, yet we put them to work, and they are working on meaningful projects.

Our recidivism rate is very low in South Dakota. It’s always been low in South Dakota, but this is paying off in spades, putting these inmates to work and teaching them job responsibilities and getting up and going to work. Very few people in life get into trouble that are working all day, everyday, five or so days a week. Very few people. The more idle we are, the more prone we are as human beings to get ourselves into trouble.

[Chart 4 – School Consolidation Incentive]

I’d like to ask that the Legislature consider, as you see this next chart, consider passing legislation that says, when two or more school districts choose on their own volition to combine or merge, that we will hold them harmless in terms of State Aid to Education funding for a four-year period of time and then, over the ensuing four years after that, it declines at the rate of 20 percent a year. I honestly believe that this will have a material impact in bringing about a significantly beneficial result in K-12 education in the state in certain areas.

I am personally aware of a couple of school districts in southeast South Dakota that have been working very hard trying to figure out how to go together to provide greater opportunities and expanded opportunities for the kids and their school systems. But, together they would lose about $140,000 to $170,000 a year in State Aid to Education because, as you folks all know, especially you who’ve been here before, our Aid to Education formula, as the school district gets smaller, the amount per child we give goes up. So, the result is the two smaller schools together would become a larger school, and their aid per student would go down. It would cost them from $140,00 to $170,000 a year. So, as a school system phases in with all the things they have to do to bring about a more beneficial opportunity for children, we would ask that you pass legislation allowing a four-year hold harmless program and then a four-year phase-out. The cost would not be very great. The benefit, the benefit could be phenomenal. I think if you’ll check, you’ll see that the ESD schools plus the next three largest, between them, have somewhere between 70 and 75 percent of all the students in the state. So, the remaining 150-some school districts, between them, have the remaining 25 or so percent of the students. So, the cost would not be great, but the opportunity for kids in a particular community and for the taxpayers in a particular community could be very significant.

There’s been a task force established that’s been working under the Co-Chairmanship of Barb Everist and Steve Cutler working on special education over the course of the last many months. Their work is not yet quite completed, but it should be completed over the next week or so. We’ve included individuals from—I tried to really include individuals from across the broad base of education in South Dakota, from the head of special education of the Rapid City School District to one of the past-presidents of the South Dakota School Board Association, trying to get a real cross-section of individuals to really look at this question. We are willing to work with any special education formula that has integrity. That’s the key.

When I came to this governorship four years ago, we had one school system in this state that had classified more than 20 percent of all its students special ed., one out of every five. Now either they had an incredible genetic problem in that community or they were cheating.

For some reason when people cheat on government funds, it’s okay. As I jokingly say, if government was Catholic, they would all be venial things. They wouldn’t be mortal.

In a serious vein, in a serious vein, we’ve got to have a system that can’t be gamed or played or manipulated. We can’t have that. It is terribly important that what goes on in Flandreau is the same as what goes on in Pierre as what goes on in Timber Lake or Rapid City. If we have any other system, then all the other taxpayers suffer if the system can be gamed.

Ladies and Gentlemen, it is important. The time has truly come—and I realize it is going to take a significant vote of this Legislature on a bipartisan basis. We cannot ignore the growing needs for post-secondary education in the academic sense for people who live in the Sioux Falls community. Too large, it is actually too large a group, not 18-year-olds coming out of high school, but folks, men and women who are mothers and fathers, and folks in the labor force that can’t afford to quit and go to school, that can’t afford to pay private school tuition, and need the assistance of public assisted education that has to be accommodated. And for years, this has been accommodated, but it has now grown to the point where the next step has to be taken, and we have to get them into a building.

I think it is terribly important that we not create a new U. We don’t need a seventh university. Bill Janklow fully understands what it means to close a school, because he provided the leadership that did it, and I’ve paid the price politically over the years. I turned a whole area that was Republican into a Democrat area. I understand that, but what I did was the right thing for the people of South Dakota. I went from approximately 80 percent of the vote to 30 percent of the vote in that area, but what I did was the right thing for South Dakota, and I will always believe that. So, we can’t allow this to become a new university. It has to be a part of the public university system of South Dakota, utilizing the unique resources that the University of South Dakota and South Dakota State University and Dakota State University-and maybe others, but clearly those three-working together as a consortium to provide additional education in that community.

At the same time, we desperately need, we desperately need more facilities for Southeast Vo-Technical Institute in Sioux Falls. It’s plumb full. It’s a phenomenal factor in the growth of economic development in the community and in the state. So, this is a no-brainer to put together a facility that accommodates what Southeast Vo-Tech needs at the same time it accommodates what the Board of Regents needs.

I’m going to authorize a tax amnesty, a prosecution amnesty beginning April 1 and extending through May 15. For a period of approximately 45 days, but it will be from April 1 through May 15, any person or business that comes forth to the Revenue Department, admits that they’ve one, been cheating, or two, have not been paying their taxes, that will fill out the forms and get their taxes paid, paying their penalty and interest, will not be prosecuted. This will not apply to anyone who has been audited already, anyone who is being audited as of today, or anyone who has received notice from the Revenue Department as of today. It will apply to everyone else, so all of the moneys that you owe the people of South Dakota, you will have to pay, penalty and interest included. But, there will be an amnesty from prosecution because what we have is an increasing number of people who are cheating on their taxes or are not reporting.

We can do it the other way. It’s not hard to ultimately find you. It just takes awhile, and then we go out and we arrest people, and we take them down to the jail, and we fingerprint them, and we book them, and now they go to court, and they have to hire lawyers, and then they have criminal records. And even when they get suspended imposition of sentence, it all never really goes away, because it is reported in the newspapers and its carried on web sites and all kinds of things forever. Let’s just try and get everybody on track. There are some people that have contacted me, I’ve had attorneys contact me, three of them in the last month, that say they have clients who want to come clean, but they are afraid of the prosecution. So, rather than making a special deal for them, I'm going to make it for everybody, that beginning April 1 to May 15, there will be a tax amnesty under those conditions.

I’m asking that the Legislature repeal—for the third year in a row, only this year we think we can get it done—I’m asking the Legislature to repeal the special exemption/credit that railroads have to not pay their property taxes. Everybody ought to pay their property taxes. If you’re talking about building a $1.2 billion new railroad, the least you can do is pay the taxes for the kids of your workers who are working for you now to get an education. The other people shouldn’t have to carry your burden. The rest of us are sick of it. You can pay your own taxes; you don’t need any special exemptions, people don’t. So I don’t care how many lobbyists they hire this year, we all should understand it’s the people that we’re working for, and the people that pay property taxes, I think, expect that everybody ought to be paying property taxes unless there is a unique reason to create an exemption.

[Chart 5—State of South Dakota State Trunk Highway System]

I deliberately did not propose as we put together the budget—let me show you, if I can, a couple of charts. The first one, this is the state highway system only. This is the approximate 8,000 miles of state highways in South Dakota. It does not include county; it does not include township, obviously no municipal. These are the state highways.

[Chart 6—State of South Dakota State Trunk Highways in Need of Repair]

Let me now show you under the trip report and the DOT analysis, what you see in red is every road that has to be rebuilt or rejuvenated or repaired in the state highway system. I submit this is not a political chart. I defy you to look at that chart and tell me where the Republican legislators come from or the Democrat legislators, or which area of the state is of one party or another, or color. It is a statewide problem.

We actually have four problems. The federal government has completed an audit of the Game, Fish and Parks Department’s revenues that deal with licenses, hunting and fishing licenses. We receive Dingell-Johnson moneys, approximately $1 million a year. That money comes from the sale of sporting goods and hunting and fishing gear in America, a special federal excise tax. For a long period of time, we have diverted $1 million a year and paid them to townships by claiming that hunters use up township roads and wear them out. Now we all realized that was a fiction, but it was a way to assist to townships in getting their funding. The Feds now say they want all the money back, and they are cutting off our Dingell-Johnson funds until we pay it back. We can’t afford to pay it back, and we can’t afford to give that up unless we materially cripple hunting and fishing and the propagation of wildlife in South Dakota, and I mean materially cripple. So, we’ve got to fix that problem which is a $1 million-a-year problem.

In addition, counties have a problem. There are three kinds of problems with the counties. One, some counties actually—when we did property tax relief a few years ago, capped it and provided they could only grow in total revenues 3 percent over and above what we called new construction—some counties had reduced their mill levies and their taxes on their citizens because they had accumulated reserves and were spending down the reserves, and they got caught when that law passed. It didn’t happen to as many counties as now claim it happened, but it did happen to some.

In addition to that, we have some counties that, because of the uniqueness of the water in the soils the last few years, clearly northeast South Dakota. There are some other areas, but this is clearly a northeast South Dakota phenomenon where the sub-base is so mushy that, virtually, it breaks up at will.

And, three, we’ve got places where folks are just destroying the roads with overweight trucks. Now I realize the criticism that Bill Janklow gets for this program of going after over-weight trucks, but I can tell you we will arrest any truck that is overweight in the State of South Dakota. Period. This isn’t a farm program. It’s not a contractors’ program. These roads—our citizens pay lots of taxes for these roads. If I went down to the county courthouse and threw a rock through the window, everybody would get pretty upset. They’d think maybe I ought to be prosecuted. But if I go put a truck on the road that is 20,000 pounds or 10,000 pounds overweight per axle, and I’m destroying the road, nobody gets too upset. After all, we’re all doing it. I can tell you that on Highway 73 north of Philip last year, in two weeks, in two weeks a reconstructed section of road had $700,000 damage done to it. Now that’s a fifth of a penny for a whole year, statewide, in gas taxes. In two weeks, that road was destroyed—$700,000 worth of damage.

A scraper came across the bridge at the Missouri River, a construction scraper from this community, 60,000 pounds overweight. When they drove it onto the scale, it pushed the scale right through the asphalt. It cost you and me as taxpayers over $20,000 just to have the bridge inspected to make sure that we could let trucks go across the Missouri River Bridge in Pierre without falling into the river, because the bridge wasn’t designed to take 60,000 overweight on an axle. A deal was cut and the person paid a huge fine, but only half of the fine.

I’ve reached the point in my life where I think that when we cut deals for fines for people that are overweight, you must think your roads are fine, so you don’t need any more state taxpayers’ dollars and fixing the roads in your county. We’ll allocate it to the counties that don’t think it is okay to be overweight.

We’ve got a third problem, and that is that we do not now raise enough money in our gas taxes to fully fund the program that passed Congress, what’s called TEA-21, which is the replacement to the ISTEA program. We don’t raise enough money to fully match the federal funds. So, unless we find additional revenue sources for the state highway budget, we will be reverting in the future years some of the money that has been allocated to us. And, we’ve got three special projects—actually there are several special projects, but three that are unique—in the proposed four-lanes from Aberdeen to the Interstate, from Mitchell to Huron, and from Pierre to the Interstate. And those are in addition to the other issues that we have to deal with.

I can tell you frankly that I’ve not proposed a solution to this problem, because I know full well that, at least historically, when I’ve proposed things, virtually a whole party votes no. And that makes it terribly difficult to get a solution because, my friends, it’s going to take two-thirds vote of this legislature. And no party has two-thirds in both houses. I’m well aware that my party does in the House, but they don’t in the Senate. So it’s going to take a bipartisan approach of Republicans and Democrats working together to find the funding sources, or we lose them. It’s that simple. The second floor will be a player in this, but I do not intend to be the coach or the general manager. I think all of us together have a responsibility to figure out how to deal with finding the replacement revenues for the $1 million for the townships, finding funds for the county roads, finding the money necessary to match the federal funds to take care of what you see here in red, and moving forward with respect to making sure that people don’t wreck the roads.

I’ve had a video made. I asked the School of Mines to make it independent of me, so that it wouldn’t be tainted with Bill Janklow’s strong feelings on wrecking highways. The School of Mines has put together a 30-minute video that I’m going to have mailed. It isn’t quite done. I saw a draft of it about a week ago, about 24 minutes of it. They need to do about another 5 minutes or so. But I’m going to mail that to all 37,000 people in the state that have farm plates. We’re also going to mail it to all 30,000 people in South Dakota that have commercial plates. So, 67,000 people are going to get this videotape. I ask that they watch it. It’s going to be made available in every public library in South Dakota, and a copy is going to be given to every legislator and anybody else that wants one. It costs us a couple bucks apiece, but it’s cheap compared to what one overweight vehicle will do if it’s overweight enough driving down the roads of South Dakota. And it tells the story far better then I ever could using computer graphics and real life trucking to show what happens when we are overweight on the roads.

With respect to the Missouri River, I can just briefly tell you that over the course of this year we will be negotiating—with the assistance of Senator Daschle’s office and John Cooper and the folks at Game, Fish and Parks and me and the folks in our office— with the Army Corps of Engineers to implement this Missouri River Bill that Senator Daschle got passed in the budget amendment. I can tell you, Ladies and Gentlemen, it is one of the most significant things that’s happened to South Dakota in 50 years. And as it unfolds you’ll all see that.

Never again will we have to say, "Captain, may I" to the Corps of Engineers to build a marina in this state. Never again will it take five years to get approval to build a marina. We will be able to decide outside the boundaries of the Indian reservations and within the boundaries of the Indian reservations, the Cheyenne Sioux Tribe and the Lower Brule Sioux Tribe, because they’re the only two tribes that went along with this legislation. They will be able to decide how the land is put to use. We will have statutory control of the hunting, the fishing, the boating, and the recreation on the Missouri River, which, prior to this, was a grant given to us administratively by the Army Corps of Engineers. We will have returned to the state and the tribes approximately 177,000 acres of land up and down the river to be dealt with under our direction and our control. There are some exceptions to this on areas where the Army Corps needs it for the day-to-day functioning of their projects. This is written into the law. It does not affect Indian water rights. It doesn’t affect anybody’s easement for irrigation or anything like that, or water permits. But it is a phenomenal thing that we’re going to be implementing, and I can just tell you, we owe a serious debt of gratitude to the leadership of Senator Daschle that he provided in really getting this done. Forget the partisanship of it. I’m just telling you that it would not have been able to be done had he not been in that position and exerted the influence that he exerted.

We’re going to commission a study on wages. It’s not going to be all encompassing. Over a period, we are going to look at all aspects, but this first study, which I’m going to ask a bipartisan group of citizens to be involved in, will look at—not occupations because we all know that the lawyers make more then taxicab drivers even though they are both honorable professions. I’m not going to do that kind of comparison. What we’re going to look at is comparisons within the framework of the geography of South Dakota. We know that for those welfare recipients that are going to work, we know that the average wage is approximately $7 an hour in Sioux Falls. And statewide, the rest of the state, it’s about $6.25. So there is a disparity between our largest community and the rest of them. But what we need to do is look at, If we are low wage, why and where? Now I personally believe what it’s going to show is the smaller the business the lower the wage, and the more rural the business the smaller the wage. I believe that’s what it is going to show. But we need to get that information and lay it out to the public so we all understand it. So as we do the rhetoric of the future in economic development, we all at least know the underlying facts of what we are talking about. So by the time the fall comes, we will have had that study completed.

Let me, if I can, say one thing, and I’m not trying to be preachy with it, but I think it’s terribly important. For whatever reason, increasingly in South Dakota, we’ve got rhetoric arising that we don’t like corporations. That’s terribly dangerous to paint with a broad brush. By far, most of the new jobs created of consequence in South Dakota are brought by corporations from out-of-state. I can flat tell you, and I’m not arguing the results of the elections. I’ve always said, my whole adult life, Let me in the debate, and when the votes are counted, my side either wins or loses, and I’ll live with the results. Honestly folks I believe that, as you all do. But let me tell you. At the present time, we have one value-added agriculture company that is talking seriously to South Dakota. And, that’s all! None of the rest of them that we’ve been talking to are interested. They have told us, No, thank you. We’re afraid of where you’re headed. We’re afraid of you.

I tell them it is just political rhetoric. Don’t listen to that stuff. It won’t win. We’re afraid, Janklow. Someday they’re going to, and we’re going to have an investment in your state. No, thank you. We don’t want to be there. I can tell you that more then half of the nonvalue-added agriculture companies that we were in serious discussions with six months ago, we are not in serious discussions with today. It behooves us all—I realize there’s great political advantage in this. We all understand that. I fully understand what role rhetoric can play in political advantage. I also would like you to understand that we do this at our peril sometimes. It’s terribly dangerous. Twelve percent of the people employed in this state are employed in the financial services industry. Imagine an employment picture in South Dakota without Norwest Processing Centers, Dial Bank’s Processing Centers, First National Bank of Omaha’s Processing Center in Yankton, Citibank in Sioux Falls, Spiegel’s and Greentree and General Electric in Rapid City. Imagine what the employment picture would be like.

I want you all to know that I’m going to embark on discussions over the next couple of weeks. I have not done it yet. But I’m going to embark on discussions to try and settle the litigation that’s going on with Citibank. I have not been asked by them to do it. I’m doing it on my own volition. A company that has paid over $300 million into the treasury of the State of South Dakota; a company that has paid over $1.2 billion in wages to the people of this state; a company that employs over 3,000 people, over 96 percent of whom, when they applied for the job, gave a South Dakota address; a company that’s paid over $10 million in property taxes and has given over $6 million away, including, in addition, $500,000 to Sinte Gleska University on the Rosebud Reservation, is not here to rip anybody off. And we all ought to understand that. Yes, it is easy to beat up on somebody like that, but we’re nuts.

I was Governor in the days when we begged that company to come here. We begged for jobs. And now we’ve become so successful with this that we’ve become cavalier. I know I’m sounding harsh and lecturing when I say this, but please let me tell you how much of my life I’ve dedicated to trying to bring more and better jobs, and we can’t ruin it by being stupid. They pay at the 75th percentile. You want to know why they don’t pay more? Because the South Dakota Farmers Union demanded that they not pay more then that. I was at the meeting in the discussions years ago. The Farmers Union said, You’ll come in here with your high wages and steal the workers from the other people. Listen to that for a lecture. You’ll steal the other people with high wages. So Citibank agreed to pay at the 75th percentile.

I realize the State of the State isn’t necessarily the place to talk about a single company, but I want you to know they’re systematic of a bigger problem. I can tell you there’s another major financial services company in this state that employs 1,000 people that is now in the process of getting a bank franchise in the State of Nevada. Folks, if you want to continue the rhetoric, fine. But lets think about what we are saying and the impact it means to a state that needs all the development that it can get. It needs all the good jobs that it can get. And if we’re going to drive somebody out of here and force them to leave, then have the guts to stand up and say you want them to leave—have the courage to face the consequences.

With respect to agriculture, I’m going to have a group, over the course of about the next 100 days, take a look at the pricing of meat. Now I’m doing this because of what Agriculture Secretary Glickman said last summer at the Governors’ convention. Because, when he was on a panel and I was one of the Governors questioning him, I questioned him about the price of meat and he said the US Department of Agriculture monitors meat wholesale to retail. That the margins, the spread, the gross profit, the markup, whatever you want to call it, the markup was the highest that’s it been in the 40 years they’ve been keeping records. This is true for beef and pork. Now he was speaking nationwide. I asked the U.S. Department of Agriculture again about a month ago if that was true. They said it’s still true.

Now everybody denies it’s them. As a matter of fact, I made some comments in Aberdeen at a chamber meeting, and I got a letter from a grocer in Aberdeen who’s a friend of mine and a grocer in Mobridge who’s a friend of mine and a grocer from Watertown whom I don’t know. All three of them actually sent me their fiscal records, one of them for six months, one of them for two months, one of them for 30 days. All three of them showed me that they were actually losing money at their meat counters. And I assumed the validity of those numbers that they gave me. They had no reason to—I mean they didn’t think I’d ever release it, and I’m not going to reveal who they are. But I’m just telling you that we need to get the facts. I’m again a believer. I’ve always been a believer. If you give the jury the facts, they make good decisions. If a jury doesn’t get all the facts, then they can’t make a good decision. Our public is a jury, so we need to give them the facts, because we’re all debating and discussing and talking about these things all the time.

[Chart 7—Tobacco Settlement]

If I could, let me cover for a second the tobacco settlement. This continues to come up. We’ve received nothing. But, the negotiation that the Attorney General was engaged in that culminated in an agreement to pay money to our Treasury is not to reimburse a single citizen or organization in the State of South Dakota. It’s to pay back the State Treasury, which are the people of South Dakota, for the state providing for the medical care for prisoners, and that portion of that medical budget that’s attributable to tobacco in the past and in the future. This settles future claims. For Title XIX—we have 60,000 people in South Dakota where you and I as taxpayers and the federal people, the rest of the nation through their matching funds, provide the medical services for over 60,000 people in this state—for the patients that have historically been and in the future will be in the Yankton State Hospital and Redfield, and state employees, because you, Ladies and Gentlemen of the Legislature, fund the moneys that are necessary to provide the medical insurance or a significant portion of it for state employees and their benefits and their dependents. That is what that money is for. The federal government still claims that they’re entitled to their money back. For our purposes, it would be the Title XIX, because as I think all of you know, for every dollar, basically, we put up in Title XIX, the Feds put up two. So we’re spending about $330 million this year in Title XIX, and about $110 million of that is state general funds. The remaining $220 million are federal funds.

I don’t know what the outcome is going to be of the federal action. We don’t know when we are going to get the first check. It’s only after all 50 states, or those that were involved in litigation, have had it through their court systems to get approval for their various actions. Now in South Dakota, that won’t be difficult, because the Attorney General had filed a lawsuit, and with the agreement of the other parties, the other side, and the judge they put it on a shelf. It just sat there at the courthouse ready to be activated if the negotiations failed. But it protected us, under the statute of limitations, from having a statute of limitations run. Once the settlement is reached, it has to be run through a court system. In some states you can just move to dismiss it, and dismiss it. In other states, it takes the court’s permission, depending on what one state’s laws provide. In our state, the Attorney General has this power to do it. But in some states, it takes other powers. So my point is we don’t know when we’re going to get the first $8.3 million—maybe this year or not. We will get the second year nothing. Then the third year, we’re supposed to get $22.4. I put a question mark after them, because I personally believe that once all the deals are cut in America, they’re going to go into bankruptcy and wipe their debts off. That’s what I think, but I’m a minority of one.

But all I’m saying is I’m getting letters from the Cancer Society and the March of Dimes and every organization you can imagine wanting a cut of this. This money belongs to state government. And, you, Ladies and Gentlemen of the Legislature, are the ones that will be appropriating it out. And at the appropriate time, we will probably be recommending that we deal with providing health care to people. For those that want smoking education, this agreement also provided nationally over $2 billion to be spent by the tobacco companies in anti-smoking campaigns aimed at young people—aimed at you.

[Chart 8—Historical Canadian Exchange Rates]

As a matter of fact, Japan has over a 20 percent duty on American beef. When we were at that same conference, Secretary Glickman said, I’m proud to report to all of you Governors that the tax that the Japanese have on beef, we’ve negotiated an agreement for it to go down at the rate of 1 percent a year until it’s gone, and then he went on with his speech. And when he’s done, I said, Just a minute. I’m glad it’s going down 1 percent a year. What is the current tax that the Japanese have on our beef? He said, Well it is 22 percent. I said, Oh, I understand—so, at the year 2020, we will have a level playing field. He said, Yeah, that’s about right. How many of you know ag producers that can wait to the year 2020 to have a level playing field with the Japanese? It doesn’t bother them to send cameras to America or Toyota pickups or Nissan automobiles. It doesn’t bother them to send Sony products. They send value-added. We send them commodities. The commodities we send them are taxed at 22 percent. You haven’t lived long enough to see a tax of 22 percent coming in on a Sony television set or a set of binoculars. Our national government has to deal with this. And I just want you all to understand what the underlying problem is. Now this is Canada.

[Chart 9—Historical Mexican Exchange Rates]

Do you want to see our other trading partner to the South? This is the Mexican peso versus the dollar. A funny thing started happening in about 1984. Try and sell them commodities. So that’s our two neighbors to the north and south, our two largest trading partners.

[Chart 10—Y2K—Year 2000]

The next chart deals with Y2K, the year 2000. I stand here before you today and talk about all these commissions I’m going to put together, and I had a dear friend of mine tell me one time when I asked him to head up a commission to put on the World War II commemorative events at the State Fair which turned into a fabulous deal for all of us. I said, Would you be the chairman of this committee? He said, Janklow, for God so loved the world, he didn’t send a committee; no I won’t serve on a committee. But he did a marvelous job of helping.

But I am going to appoint a task force to really deal with this question. The unknown can be as dangerous as what we know. I’ve deliberately bit my lip for the last two years on this subject matter, and now we are down to 12 months. We face an absolute catastrophe in the world because of this problem. On the other hand, it may not be much of anything. The biggest problem is, we don’t know. But don’t take anybody lightly that tells you that the roof could come falling in. I can tell you today that if year 2000 hit today, the electric grid that serves South Dakota would go down. It would not stay up, and don’t believe anybody that tells you it would. Now, by the year 2000, it might, but today it will go down. Year 2000 doesn’t come in the middle of June when the temperature is decent. It’s coming on December 31 in the middle of winter.

We can’t take the risk that our telephone and telecommunications companies won’t operate. We can’t take that risk. They have to function. We must have hospitals where they’ve got electricity and gas. It has to work. There’s no program Bill Janklow or you folks together could implement on December 31 to take care of telephones, medical, law enforcement, and the utilities. They must work. We must let the public know, every step during the course of this year, what is Y2K compliant, and what isn’t. We must let the public know that. I can tell you that I’m absolutely, positively, unequivocally assured by our folks in state government, we will be ready. Our percentages now are in the 15-30 range. But we are going through over 100 million lines of code with our programmers. And as we approach certain thresholds, all of a sudden we’ll start taking quantum leaps. When I say we’re ready—unlike most other states, where you hear a neighboring state is 80 percent ready, they’re only dealing with critical systems—we’re dealing with all our systems! Not critical, they’re all critical. We’re dealing with 100 percent of ours. And we don’t count ours ready until we have taken it to the mountain in Colorado where our backup center is, put it on their computers and run the whole thing on their computers without any tape from ours. And it works. And if it doesn’t work, we don’t count it as ready. But I’m assured we will be ready by July 1 of this year, and we spent a few million bucks doing it. Then from that point on, we will be testing and retesting until the end of the year.

But our citizens have to know where are the telephone and telecommunications companies. We have 60-some phone companies in South Dakota. They all have to be ready. Every hospital has to be ready at least with respect to feeding and caring for the people that are there. Their equipment has to work, or the public should know that. We can’t make them make it work—anybody. But the public has to know who’s going to function, and who isn’t.

The law enforcement and the fire departments, their equipment has to function—911—I can tell you that the task force that this Legislature mandated be put together in legislation last year that’s completing its work got a report last Thursday. I believe that says the top eighteen 911s in South Dakota are not Y2K compliant. As a matter of fact, one of the major vendors that provides equipment says, If you bought it from us before, get this, 1997 we’re not going to make it compliant. If you bought it afterwards, we will. So they are faced with the prospect of buying new equipment that may have been purchased in 1996. But right now the top 18 are not compliant, but they are working on it.

We’ve got to make sure that we have municipal water and rural water. Have to have it. No other choice. We’ve got to make sure that sewer systems—municipal water is meaningless if you can’t flush it or let it go down the kitchen sink or the bath drain. The sewer systems have to work. We have to make sure that those places that live on natural gas, the natural gas has to work. And the electrical generation—our power companies, our various investor-owned utilities, our public power systems—those that generate, those that distribute, those that do both, they have to function, because one of them going down can suck the whole system down on the grid. So we are going to put together a group of people, and they will be making reports with regularity to the public with respect to these specific areas—state government, for those local governments that choose to be involved, fine. I’ll not attempt to force them to do anything. But all the rest of them I’m going to use the gubernatorial powers that I have that deal with emergencies and crises to get the information and make it available to the public. I do know the Public Utilities Commission has met with respect to—electrical utilities had a meeting and I believe telephone utilities, so far. So they’re also working on this endeavor. But, folks, this is terribly critical, and so, rather then being an alarmist, I’m just going to tell you that we will try and get the information to the public as fast as we can intelligently and effectively assemble it. And we will be prepared, at least to deal with, hopefully, those limited emergency situations that we have to deal with December 31. There could be some disruptions in April, and there could be some disruptions on September 9. This is obviously out of my bailiwick, but they tell me that programmers used to end their programs with 9999, four nines. Well, that happens to be also 9-9 of 99, and the computer doesn’t know the difference. So, for some, it may trigger when it gets to that. When it sees that date it may trigger and say that’s the end of the program, shut it off, and shut it down. For some it may erase it. The problem is nobody knows where all those 9999s are. That’s the problem. If they knew where they were, because they were long ago put in place by people who’ve long since passed away, moved away, gone into other occupations, or won’t tell you, whatever the case is.

I know that this is taking me some time today, but we talk a lot about bipartisanship. Bipartisanship really isn’t complaining. It’s working together. Let me say this as I close. There isn’t a single one of you that ran for office saying elect me and I’ll never talk to the Republicans. There isn’t a single one of you that didn’t ask for Republican votes. There isn’t a single one of us Republicans that ever said elect me and I’ll never deal with the Democrats. And we all sought Democratic votes and Independent votes.

I fully realize there are fundamental differences between our parties and within our parties, there are philosophical differences. But I also realize we will get nothing done if it’s partisan in every sense. Now, frankly, one party has enough power to get done whatever it basically wants except raise taxes. It’s got that power. I can also tell you I’ve never seen them use it in all my years in government. And I’ve never served as Governor when my party didn’t have a majority or two-thirds in both houses. It’s always been bipartisan, sometimes more sometimes less. Bipartisanship is not all of one party voting to seat their people and the other party giving 18 votes in the other direction. That’s not bipartisanship. That’s not a way to start it. But it’s done. It’s behind us.

I can tell you that in every issue that I talk about, whether its helping children with education, whether it’s parenting, whether it’s dealing with drugs, whether it’s dealing with highway reconstruction, whether it’s dealing with carrying on the day-to-day affairs of government or the Y2K problems, there is no unique Republican solution. There is no unique Democrat solution. Between us, we can find a solution that’s acceptable to our people. I chide everybody on the national level, and you folks hear me all the time. You will be here for 40 days. You’re already in your second day. You’ll be here 40 days, and when you go home, you’re going to have decided how much government do we have in South Dakota beginning July 1. You’re going to have decided how much we are going to spend on it. You’re going to have decided who we take the money from to spend. And four, you’re going to do it in 40 days or less. Last year, you didn’t even use all your time. You’re going to do it in 40 days or less. What you accomplish in that period of time, just imagine what we can all do if we had Mozart’s music with us. Just imagine.

But, I wish you good luck, and I wish you Godspeed. I want you to know our doors are open for all of you. Our administration, the entire cabinet, our team, we’re going to work with you. We don’t just want to work with you. We’re going to work with you. You folks call an awful lot of shots. We need your help. We need your direction. We need your guidance. And then we need to implement and do in an effective way what you’ve mandated in your laws.

Nothing in Democracy—nothing—is more important than an independent judiciary—nothing—that truly treats people equally before the law.

Nothing in Democracy is more important than citizens who pick other men and women to come to the seat of government and make laws for them that affect their life, their liberty, or their property. That’s a powerful lot of trust folks. It’s not just that you were not challenged in the election and you got a walk. It’s not that you had a cakewalk or you had a lousy opponent. Folks have put an awesome amount of trust in you. They’re out there retired today or they are in a nursing home today or they’re in a developmental disability center someplace or they’re working today or they’re whatever. But, we’re here because they sent you here to do their work. And as long as we keep that in mind, we’re going to bring out favorable, beneficial results for the people of South Dakota. There’s no greater challenge. There’s no more awesome responsibility. And, frankly, there’s nothing more enjoyable.

Godspeed to each and every one of you, and God Bless South Dakota! Thank you.