Some question South Dakota’s best for business report

Gordon Garnos

AT ISSUE: South Dakota was recently named the Number One state in these united for our tax system being the best for small businesses and entrepreneurs. While union officials grumble at this, Governor Mike Rounds says our state’s taxing system has been, is and will be a great drawing card for businesses in other states wanting to find a business-friendly climate in which to move.

ONCE AGAIN South Dakota has been put to the top of a list. This is important because while such lists and surveys don’t always tell the entire story, they do have meaning. The list we were recently selected for was that South Dakota has the most attractive tax system among the 50 states and the District of Columbia for small businesses and entrepreneurs.

The list was compiled by the Small Business and Entrepreneurship Council in its Business Tax Index 2009. What this did was combine 16 state tax measures into a commonality for ranking.

A recent newspaper article quotes Governor Rounds saying our high ranking is because South Dakota is trying its best to attract businesses that may be having problems in other states, especially during the recession.

Rounds said, “We’ve just simply indicated that rather than leaving the country and rather than outsourcing the jobs to other countries, to take a look at South Dakota. In order to be successful and to bring jobs and businesses to the state, you have to be seen as recognizing that profit is not a dirty word.”

ADDING TO THE state’s business-friendly climate is a work force willing to accept relative low wages. Only Mississippi and West Virginia workers are paid a lower median hourly wage than South Dakota’s $12.82.

At the same time, one union official from Sioux Falls said, in effect, hold on a gosh-darn minute. Mark Anderson, president of the South Dakota Federation of Labor AFL-CIO, responded by saying businesses that pay low wages aren’t much help. He claimed the state’s tax structure doesn’t make any difference.

“If you’re not putting enough money in your pay check to take home, you end up somewhere below a living wage,” Anderson said.

The governor countered, “The most important factor is how much you have in your pocket after you figure in local and state taxes and once you factor in the cost of living.”

SOUTH DAKOTA is actually rated 10th in the nation in terms of disposable income once you adjust for the cost of living.

While I’m reading all of this, I am reminded of and wonder about another list I have seen. Isn’t South Dakota at the top or near the top of that list about the number of both spouses working to make enough money for survival? There’s a reason for that.

At the same time, South Dakota’s search for new businesses, often called economic development, has had various points for out-of-state businesses to look at. Low salaries as well as a favorable tax system are drawing cards for us, especially when we consider those who have lived east of us, but are now our close neighbors.

As I have touched on in the past, South Dakotans generally have agreed to work for lower wages so they didn’t have to leave home. At the same time, Anderson of the AFL-CIO is right as well when those wages put us below a living wage. Unfortunately, too many young South Dakotans have been forced to leave their communities as well as their state to make what they think is a decent living.

THERE’S NO QUESTION that South Dakota has been courting out-of-state businesses, this includes industries as well as retail, for many years. And saying that, I’m reminded of an incident from the early 1980s when Minnesota Governor Rudy Perpich mentioned another list South Dakota was on. However, we weren’t even near the top.

In a squabble with then Governor Bill Janklow about us stealing Minnesota businesses, Perpich said South Dakota was “50th in everything.” This was irritating to a lot of South Dakotans back then, especially me, the editor of the Watertown Public Opinion, for my community had by then plucked a number of businesses out of Minnesota and had them settle here.

So, on page one every day for the next several weeks I put a little squib reminding every reader of the number of positive lists our state ranked at the top or near the top. They were titled, “Rudy, Did You Know?”. Believe it or not, folks cut out those squibs and mailed them to the Minnesota governor to the point one day my phone rang and the voice at the other end asked, “Are you the guy putting all those ‘Rudy Did You Knows’ in the newspaper?”

I admitted I was that guy. The voice at the other end said, “Well, this is Rudy? He then, in effect, hollered “Uncle!” He had had enough mail from this part of South Dakota. Aren’t lists grand!….

Gordon Garnos was long-time editor of the Watertown Public Opinion, retiring after 39 years with that newspaper. Garnos, a lifelong resident of South Dakota except for his military service in the U.S. Air Force, was born and raised in Presho.

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