(calm music) - [Announcer] This is a production of South Dakota Public Broadcasting.

(calm music resolves) (slow, rhythmic synth music) - Hello and welcome to "South Dakota Focus."

I'm Jackie Hendry.

Lawmakers debated 451 bills in less than 40 days of this legislative session, setting the tone for the future of our state.

A little less than half of those bills made their way to the governor's desk to be signed into law or vetoed.

Tonight we're reviewing the historic 2023 Legislative Session, from the state's largest tax cut ever to a noticeable shift in Pierre's atmosphere since the November election.

We'll start with some analysis of the session's key topics.

The 2023 Legislative Session began with Governor Kristi Noem's State of the State address, in which she outlined her policy priorities.

Several of the governor's key proposals failed this year, a theme not lost on Michael Card.

He recently retired from the University of South Dakota, where he taught public policy and political science.

The governor's priorities, wins and losses.

What stood out to you?

- Well, I think the things that stood out is the the governor proposed and made a campaign issue and said it was her major legislative priority was to enact a cut in the grocery tax.

And that as of our speaking here today has not happened, but nothing is over until the legislature adjourns sine die.

But I think that's the major, major policy that our governor had as an agenda item, and it hasn't come to pass.

She did get some successes in terms of a reduction in the unemployment insurance tax, we call it, that provides for re-employment assistance to individuals who have lost their jobs through no fault of their own.

There was an extension of family leave that didn't work out so well, although many in the legislature gave our governor credit for trying a unique manner of trying to provide this for all employees, not just state employees, for whom there is a degree of full family leave, but it was to be extended for a longer period of time.

But what the governor was proposing was to create an insurance pool with a certain amount of money to sort of seed the system so that then we could get a real insurance pool that premiums would replenish to pay out family leave, family medical leave, for individuals upon the birth of a child in the private sector.

I think that the more conservatives among them didn't want to go that route, that that would be more state government and expanding the size of government.

But that didn't pass.

- [Jackie] Another priority for Governor Noem this session was creating a committee on foreign investments to oversee ownership of South Dakota Agricultural Land.

The goal was to prevent any potential for national and state security risks but lawmakers defeated this proposal as well.

Two bills focused on the state's LGBTQ community did not become law, but they inspired heated debate among lawmakers and made headlines.

House Bill 1125 included drag performances in a part of state statute that protects minors from obscene conduct.

The bill's definition of a drag show included the phrase, lewd and lascivious.

Another proposal, House Bill 1116 prohibited lewd and lascivious content in public schools and universities.

Though drag performances were not mentioned specifically in this bill, they featured heavily in debate.

When the South Dakota Broadcasters Association asked why Republican leaders didn't mention these bills during a February press conference, House Majority Leader Will Mortenson said they made up a small portion of Republican-backed bills.

- And I would actually say that what's happening is that some of the media outlets choose to cover them all the time.

I mean, there's a lot more stories about than there are bills on a lot of these topics, and so you all get to choose what you write about, and my members get to choose what they put in bills about.

And so is this the most important thing facing the state, or is this the top priority of our caucus?

What I'm here talking about today, those are the things that are the top priorities of my caucus, which is taking care of the fiscal health of the state, setting us up for continued prosperity and growth in the state.

- This is not the first time that bills targeting LGBTQ residents have drawn attention away from more traditional Republican priorities.

What's the role of leadership in reigning in some of those minority outliers when it comes to the bills that move through?

- Well, I think the leadership in both the House and the Senate viewed that their primary task this year especially as compared to the prior year or prior two years is to keep the conflict at a minimum, and to focus on what people agree on.

And if there are things that people don't agree on, let them hash that out either in committee or in session, but they're not going to give priority to it.

And again, this often leads to an escalation of conflict.

And you know, when there is conflict, that's what gets people's attention.

That's how changes eventually get made in law.

- We'll hear more about Republican and Democratic priorities, wins and losses throughout this program.

They include the state's largest sales tax cut in history, increased funding for public schools and Medicaid providers, and millions of dollars in infrastructure development.

But at the end of a live broadcast in the final days of session, Democratic Representative Linda Duba offered a highlight that caught me by surprise.

We have just a few seconds left.

In a sentence, what was the big win for you this session?

- Decorum.

- Decorum, interesting.

- Yes.

- We'll have to unpack that a little later, I think, Representative Duba.

- I think so.

- [Jackie] The more courteous nature of this year's legislative session is a theme many have noticed.

- That whole notion of decorum though is really one of people where we're very civil towards each other, at least in public.

They may have been not so civil in private.

But I think that really leads to probably the most defining characteristic of the legislature.

- Above all else, conversations about tax cuts dominated most of this year's legislative session.

Proposals focused on food, property, and overall sales taxes.

After a handful of bills battled it out, the winning deal is the crown jewel of a productive session for the Republican super majority.

Let's review.

A press conference with Republican leaders on the last regular day of the session felt like a victory lap.

- You know, I think the state of South Dakota should be really proud of the product delivered from the legislature this year.

I think they should be proud of what we accomplished and how we accomplished it.

- [Jackie] Representative Will Mortenson is Majority Leader in the House of Representatives.

He's part of a new leadership team for the Republican caucus, which saw another year of historic revenues and big promises to fulfill.

The most notable of these promises was Governor Noem's push to eliminate the state sales tax on food.

That proposal died in the House Appropriations Committee.

Shortly after, the governor released a video implying she might veto the state budget, if it includes a temporary and less meaningful tax cut - As we go into the last two weeks of legislative session, my hope is that policymakers remember that they work for the people, and that they will be accountable to the people.

They'll present me a budget soon, and I will have to decide if it is worthy of my signature or not.

I've proven in the past that I am willing to make hard decisions, and I will again.

- [Jackie] But Republican lawmakers were undeterred.

Instead of banning the food tax, they passed an overall sales tax cut, reducing the rate from 4.5% to 4.2%.

Before lawmakers finalized the details.

Representative Mortenson joined Lori Walsh on "In the Moment" to discuss the process, including the Governor's apparent disapproval.

- I'll be the first to admit that we might be taking a different path to the end goal than she would've preferred, but I want people to know for sure, the goal is the same.

And so, you know, we're looking at tax cuts in large part because the governor didn't spend every last dime available.

And so we've had a a good working relationship with she and her team.

I'm still talking to them daily to try to get the plane landed on the South Dakota budget, and looking at a lot of these tax cut proposals that, again, we wouldn't be looking at if she wouldn't have put it into her budget.

So I think she's due a lot of credit for that.

- Do you have the votes for a veto override if necessary?

- You know, I'd have to go back and look over the last several years about how many members voted for the general bill.

But going back for decades, that's usually a pretty consensus item by the time it gets to the floor.

And so will we have two thirds in a little while?

I think based on historical standards that have been set by leaders that came way before me, the answer to that has almost always been yes.

- [Jackie] That expectation held true.

The Senate eventually approved the tax cut with a veto-proof, two-thirds majority, but the cuts are only temporary since the bill includes a sunset clause.

The cuts end in four years.

The House of Representatives had the final say on the proposal.

Representative Chris Karr has spent four years arguing for this overall sales tax cut.

While he doesn't agree with the sunset clause, he understands it's a necessary compromise.

- But I'll be here the next four years like I was the last four years, saying the same thing: That we can afford to do this, the numbers are going to keep coming in and I'm going to keep fighting to get rid of that sunset, make sure that this is a meaningful, long-lasting tax cut for us in South Dakota.

So I hope you'll all support me in voting for the largest tax cut, the largest tax relief, in the history of the state.

Thank you.

- [Jackie] The House indeed supported him by by passing the 0.3% tax cut unanimously, prompting a standing ovation from representatives.

Lawmakers showed the same kind of enthusiasm for the state budget.

It increases funding for the so-called big three: education, Medicaid providers, and state employees.

Lawmakers approved a 7% pay increase for public school and state employees.

They also approved a 5% funding increase for Medicaid provider salaries, plus a 100% reimbursement rate for certain facilities like nursing homes.

That's expected to slow down the chronic closing of nursing homes, but lawmakers anticipate a legislative study on long-term care later this year.

Another big issue for some Republicans this year was increased funding for water-related projects.

Senate Majority Whip Helene Duhamel took the lead on a bill to dedicate federal aid dollars for water pipelines.

The money is left over from the Federal American Rescue Plan Act or ARPA.

- So we have these ARPA dollars sitting there.

We have a hundred million that have yet to be allocated.

And these are like a ticking time bomb.

They have to be spent, allocated, by December of 2024.

So that's next year, December, 2024.

And then fully allocated and already spent by December, 2026.

So we have to allocate them by '24, spent by '26, and they're sitting there.

We saw these hundred million dollars, and we said let's move those into water.

That's really how the ARPA dollars are supposed to be spent.

There's only a few eligible projects, and in South Dakota, the big money has gone to broadband and water.

- Senator, when we're talking about these pipelines, just to clarify for folks, and correct me if I'm wrong, these are all pipelines that are sourcing water from the Missouri River and spreading out to increase development throughout our state.

Do I have that right?

- Yeah, that's correct.

Yeah, we're looking at population growth in West Dakota and prolonged drought, and we see trouble within 20 to 50 years.

Our streams and lakes will start drying up.

Our population is growing, and we need a reliable source of clean water ongoing to be able to grow.

West Dakota will not be like Sioux Falls without water.

And Sioux Falls would not be Sioux Falls without water.

And now Sioux Falls needs more water.

Our whole state is in an emergency situation, and this is the perfect timing for this money.

- This new spending is in addition to another $600 million in federal funds lawmakers put towards water projects last year.

While the Senate voted to put another 50 million towards these projects this year, the House couldn't reach an agreement.

Republicans highlighted several other victories in the closing hours of session.

$200 million in workforce housing infrastructure, a tuition freeze for the state's technical colleges and public universities, and approval for the governor's proposal to cover college tuition for members of the South Dakota National Guard.

Another victory was the relative efficiency of the session compared to years past.

House Majority Leader Will Mortenson praised his colleagues in the closing press conference.

- I was very proud that the House of Representatives had improved functionality, improved civility, and an improved work product to show that those two ingredients add up to a good result.

(rhythmic synth music resumes) - For South Dakota Democrats, This legislative session was a mixed bag.

They shared a few bipartisan victories but suffered some high profile losses.

Newly appointed Senate Minority Leader Reynold Nesiba started the session with three priorities: a balanced budget, protecting privacy, and focusing on what he calls real issues.

- We want to talk about issues that matter to South Dakotans.

We have a childcare crisis in South Dakota.

We have a long-term care crisis in South Dakota.

We have too many people that are addicted to drugs that need access to care and rehabilitation.

We need to address our mental health crisis here in South Dakota as well.

- [Jackie] Action on mental health is one of the wins for state Democrats this session.

10 of the 11 Democrats serving in Pierre signed on to a bipartisan bill, funding suicide prevention programs.

It passed both chambers with a veto-proof, two-thirds majority.

Another victory was a bill with bipartisan support aimed at preventing fentanyl overdoses.

Senate Minority Leader Nesiba and Republican Assistant House Majority Leader, Representative Taylor Rehfeldt, sponsored that bill.

It passed through both chambers by the middle of session.

- In terms of making government work better I'm proud to say that HB 1041 is on the governor's desk.

So this is a bill for fentanyl test strips, to decriminalize those, so that someone who is using drugs can use a fentanyl test strip to find out whether it's laced with fentanyl.

We have too many overdoses in South Dakota, and this is a harm-reduction strategy.

It had broad bipartisan support, and I'm hopeful that the governor is going to sign this, and that this is going to save lives.

- Governor Noem did sign the bill, which becomes law later this year.

But Democrats could not defeat legislation to ban certain medical and surgical procedures for transgender youth.

It continues a trend, focusing legislation on transgender rights.

This year, as lawmakers debated House Bill 1080, Assistant Minority Leader, Representative Erin Healy pointed out that many proponents of the bill who testified in committee were not even South Dakota residents.

- Well, proponents couldn't find anyone in South Dakota who transitioned as a minor and detransitioned.

And that makes me wonder why we're talking about this today in our body.

What really bothers me were the two proponents who did show up from out-of-state.

They are doing a tour of state legislatures right now.

They were in Montana last week with the same message.

- [Jackie] Other democrats say the bill is discriminatory, adding it will be the focus of lawsuits, cost taxpayers money and drive families out of the state.

- A very similar bill that came about in Arkansas is currently at over $2.5 million in litigation costs.

So I'm not asking you to pick a side, I'm not asking you to make a decision about our trans youth and their families.

I'm asking you to think about South Dakota taxpayers.

- Where's the parent in all this?

The parents are supporting their children who are trying to determine who they are as a true self.

So by passing this legislation, we are taking away parental rights, rights that a parent has with their child and with medical professionals.

- [Jackie] Despite these arguments, all but three Republicans in the House voted for the bill.

The Senate passed the measure as well and Governor Noem signed it within hours.

Democrats faced another defeat in the house when lawmakers voted against Senate Bill 191.

The bill would have created a task force to address the disproportionate number of Native American children in the state's foster care system.

It was a joint effort between Democratic Senator Red Dawn Foster and representative Peri Pourier, who worked with tribal leaders.

It passed the Senate but not the House.

Leaders from four of the state's nine sovereign tribes condemned the house decision.

Peri Pourier is the House Minority Whip.

We spoke earlier this month.

- We have to come together.

There's no way a around it.

We have to come together and deal with this issue together.

And we have to understand the baseline knowledge that, yes, there's a political jurisdiction here.

Yes, tribes have a responsibility in this, and so does the state have a responsibility in this, because we are dealing with native children, which is the future of South Dakota.

I am tired and I am heartbroken over the odds and over the statistics that native people hold in this state.

Poverty.

Poverty looks a lot like neglect.

South Dakota has 6 of the 10 poorest counties in all of the United States, and those six counties are all in tribal reservations.

Poverty to incarceration is a cycle that we have to break and it's not just going to take one people, it's going to take all people.

- [Jackie] That work is likely to continue in future legislative sessions.

Despite these high profile defeats, Democrats shared in the celebratory attitude that accompanied the general budget in the session's final hours.

House Minority Leader, Orin Lesmeister, thanked his colleagues across the aisle before praising this year's budget investments.

- You know, folks, we're sitting here on a historic day when we just passed the largest tax cut in the history of South Dakota, but yet on top of that, we're giving CSPs, nursing homes, critical care providers, schools- and we're just at the same time being fiscally responsible yet as we always have been here in South Dakota.

In my seven years of being in this body I have never seen these numbers.

Never.

And yet we're going pass this forward and really set the tone for the future.

- Governor Noem vetoed four bills this session.

Veto day is reserved for lawmakers to consider those vetoes and potentially to overrule them.

At the time we're recording this, we don't yet know the results of this year's Veto Day.

But you can find that online at sdpb.org/news.

But the chances of overruling a governor's veto are actually pretty slim.

In the last 20 years, lawmakers have overruled barely 1% of the vetoes they see.

That's according to former state senator Tom Dempster.

He joined the "Political Junkies" segment of "In the Moment" recently, and we talked about Veto Day and the selection of legislative summer studies from a former lawmaker's perspective - Jackie, I was actually pretty surprised to see how difficult it was because we do pay a lot of attention to veto day.

And for legislators, I mean, who've spent all of their lives, by that I mean all of their lives in the past two to two and a half months, in this fairly, in bootcamp.

- [Jackie] Mm-hmm.

- Now you've really, now you've come back from bootcamp, and you've realized there actually there is life outside of Pierre, and you kind of like that life.

And then all of a sudden, so about 25% of me was a little bit resentful that I had to go back to Pierre.

The other 50% of me was, "Hey it's really fun to see my peers and my friends "and my enemies, and I get to work with these guys again."

And then 25% of me was steeled to the duty of Veto Day.

So it's quite a special day.

But I have to tell you, one of the things that happens when when the vetoes are done the sine die, and that's when the legislature is formally adjourned, I sat exactly right- I sat at that formal adjournment, heard the votes being cast, because of course the Senate, just, it's a voice vote.

It was almost like a bell was tolling in the distance.

(Jackie laughs) Work is done, duty is done.

Huge amounts of satisfaction.

Time to go home.

- Yep, almost like the school bell at the end- or at the beginning of summer vacation.

- No, I wouldn't know.

(Jackie laughs) No, I wouldn't call it a school bell; I'd call it a church bell.

(both laugh) - [Jackie] In our last just couple minutes together, another thing that I am waiting for is the formal announcement of those summer study topics.

- Oh, sure.

- I'm sensing a strong hunger for a long-term care summer study and potentially a hunger for a childcare study.

If you were a betting man, does that sound about right?

How do those decisions get made, or are you anticipating any surprises this year?

- Well, summer studies can be one of two things.

- [Jackie] Mm-hmm.

It can be a way to dismiss an issue.

- [Jackie] Mmm.

- But we didn't want to deal with it this legislative session, and we don't ever really want to deal with it, so let's do a summer study.

But I'm more of a true believer in that, and whatever the summer studies would be, it would certainly be issues of relevance and importance.

But I have to tell you this, and I think all of the reason that I would take a summer study seriously is anyone who followed this year's legislative session, has to take a great deal of satisfaction in the success of the legislative session, and their process, and their procedure.

I had a lobbyist who follows the legislature very closely and has seen some of the sessions that we've had in previous years and be profoundly disappointed in how our democracy in South Dakota acts, if you will.

I had this- I think you'll like this, Jackie.

(Jackie laughs) I had this legislator tell me, and he's one who not cynical, he's one who still believes in our capacity to govern, he was overlooking the Senate floor and one of the particular debates that he heard, he says, "I was just so joyous, I wept."

That's the successful legislative session we've had this year.

- [Jackie] Wow.

- Yeah, it's pretty cool.

(rhythmic synth music resumes) - That's our show.

Join me again on Thursday, April 27th.

We'll learn how two of the state's largest cities are responding to rising rates of homelessness and hunger.

Until then, I'm Jackie Hendry.

Thank you for watching.

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