February 2025

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The 1st Amendment and the Sioux Falls City Council

l3wis February 6, 2025 1Comments

It seems I am spending a lot of time these days talking about the role of the council and the 1st Amendment. The thing that always puzzles me is that the 1st Amendment is NOT complicated, but folks struggle with it.

So today HB Bill 1050 got killed, by a ONE VOTE in taxation committee. Several folks were instrumental in killing this bill. It would have pretty much put a $450M tax debt on the citizens of Sioux Falls if passed. I posted Greg Neitzert’s written testimony after the hearing. I truly believe that testimony changed minds, and Cathy B’s telephone testimony cinched the deal. I also emailed the committee suggesting amendments and solutions (I think it would be good for small towns, but NOT SF.)

After this I assumed city hall was reeling, trying to figure out their next steps (I will post later about the future of the Riverline District).

But things got really interesting.

I’m going to leave the constituent’s name out of this for privacy reasons, and the city councilor, because I think it applies to the ENTIRE council.

Their is a constituent that emails the mayor and the council quite a bit, he is very involved in local politics, and I don’t always agree, but he always CC’s me in the emails so I am a media witness (I think I told him to do this). I have several concerned citizens that CC me when sending emails to the city council and I encourage you to CC me, witnesses are important.

fb.art@sio.midco.net

I sometimes do a reply all to their emails if I feel something needs to be clarified or piled onto.

After I posted Former Sioux Falls City Councilor Greg Neitzert’s* submitted written testimony to the taxation committee on the blog this constituent emailed the council with Greg’s testimony and a brief statement about his work. This person called the council ‘CORRUPT’ three times, but in fair context and NOT harassment. Then he said that Greg has ‘LARGE BALLS’. Trust me, I spit out my coffee when I read that, but it’s NOT a threat or harassment. In fact, Neitzert saw the email and thot it was funny. So a newly elected city councilor wasn’t having it and reported the email to Human Resources as harassment. HOGWASH! Not only is this constituent completely harmless they wouldn’t hurt a soul, but that doesn’t matter. This NEW councilor seems to think that he is a city employee and has the same protections, he does not, YOU ARE ELECTED and must follow the constraints of the 1st Amendment and the US Constitution. Now if such an email was sent to an unelected city employee, that would be an issue. So the city’s HR department warned this constituent if they send anymore ‘Harassing Emails’ they will be blocked. First off, they don’t have that authority because this person is NOT a city employee, secondly, sending an email about concerns is NOT threatening. It often puzzles me that they put their hand on a bible and swear an oath to the Constitution but have no idea what is in the document. If you can’t handle the heat in the Carnegie Kitchen may I suggest resignation. Nobody will miss yah. The irony of all this is this councilor was in a similar situation at a former employer. Kettle meet Black.

*Full disclosure, I worked on Greg’s first term campaign coordinating his messaging, graphic design, marketing and direct mail, it was one of the most successful campaigns I was involved with, we kicked ass and took names!

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3rd Penny gets killed in the Legislative Committee

l3wis February 6, 2025 9Comments

Gotta admit, I was a bit worried about this, but former city councilor Neitzert nailed it in submitted testimony:

To: Honorable members of the House Taxation Committee

From: Greg Neitzert, Sioux Falls, SD (District 9 resident)

RE: HB 1050 (2025 legislative session)

Hello,

I am a citizen of District 9 in Sioux Falls. I am also a former City Councilor for the city of Sioux Falls having served from 2016-2024 until I was term limited after (2) 4-year terms. You are going to consider in the House Taxation committee bill HB1050 which is titled “authorize municipalities to impose a new tax to fund capital improvement projects.”

This is not a new idea. This has come up in the legislature in the past and has been defeated. I urge you to reject it again.

I can speak to it from the perspective I am intimately familiar with, Sioux Falls city government. We do NOT have a revenue problem. If we have any problem, it simply comes down to priorities. I am a big supporter of quality of life, in general, but core infrastructure must always be the priority. And quality of life can mean a lot of things – in city government we have a lot of it – and we are proud of it. Parks, libraries, etc. But in a city like ours “quality of life” also includes some things that can be very controversial, and very expensive. Events centers, convention centers, baseball stadiums, etc. Each has their pros and cons, and I don’t mean to imply that I am necessarily against any of those. They are highly dependent on several factors – cost, priorities, etc.

In Sioux Falls, we generate an enormous amount of sales tax revenue. The first penny pays for operations (which is matched by property tax that also contributes to operations). The second penny pays for our capital improvements. We have a 5-year capital improvement plan. We also obtain significant revenue from the 3rd penny entertainment tax (bed, booze, etc.) that helps to fund operations and some capital at our entertainment facilities. We have a lot of needs, and a lot of wants. We had to prioritize every year when we did the budget. We had to say no at times. But we certainly could figure it out. The city is in a very strong financial position. It has a reasonably low debt load on a per capita basis. We aren’t even close to our statutory debt limit. We have a very large reserve fund. We are proud of all those things. At any given time, about 20-25% of our 2nd penny is obligated for debt service for large capital projects (pools, libraries, major city buildings, etc.). Notably, we also have a 9-million-dollar debt service payment for the events center obligated to our second penny as the 3rd penny didn’t generate enough to pay that debt service on its own, even though it is an entertainment venue. So, operations and capital improvements come from the entertainment tax, but the actual bond (the “mortgage”) comes out of our second penny. We cash flow all our road projects. We don’t bond unless we really must, and the project is something that would not be possible to do in one year. We know that getting in the business of bonding for infrastructure that deteriorates the day you complete it is a bad idea. If we ever get there we will be in trouble. The city is growing, “sprawling”, and a lot of it is being allowed to be done in growth patterns that are too low of a density and property tax base to sustain itself. That is a problem of our own making and is not a problem that should be papered over by just getting more tax authority. We need to address our own structural issues. You will be told that we need the funds for critical infrastructure. Keep in mind, in Sioux Falls all the following are enterprise funds and are 100% paid from user fees – NO TAX DOLLARS: Sewer, Potable Water, Landfill, Electric Light and Power, and our Parking Ramps. None of those depend on sales tax revenues. It comes down to roads/bridges, parks, libraries, fire stations, and most notably for this discussion – entertainment venues.

Which leads me to the real reason behind this bill, at least from the Sioux Falls perspective. The current Mayor has proposed and set in motion what would be the largest spending spree in city history – by a factor of 3 to 5. That being the combination of a convention center – which his own proponents say could be in the 200 to 400 million-dollar range, and if that happens, they would then propose to remodel our current convention center into a large indoor recreation facility. It was well known and an open secret in city government, and those of us in the “know” are aware of this, but it isn’t shared publicly that the only way to possibly pay for the new convention center idea is with a new tax. There is no other way. Conveniently, our mayor and the proponents of this plan have yet to disclose this proposed funding source to the citizens. They’re hoping you pass this, and then they’ll reveal it – not very transparent.

A new penny sales tax would be the first new tax imposed in the city in many, many years. The last time we had a new tax was probably 20 years ago when we as a city decided to round out our second penny from .92% to 1.00% – the state limit. That .08% is dedicated by our own Council/city policy for arterial road expansion.

At the end of the day, a major proponent of this bill is the city of Sioux Falls, and while the Municipal League and/or our mayor or city leaders may testify to you about “critical infrastructure” like roads and bridges, make no mistake – this is about a massively expensive dream, which no one asked for, that would be the largest expansion in our tax authority in probably my lifetime. At a time when people are groaning under the weight of property tax load, allowing another penny of sales tax on citizens is not the right choice, particularly when it is based on wants, at least in our case. If smaller towns with different dynamics have a real need, consider how you could limit or revise this. Don’t take comfort in public votes and 5-year sunsets. New “temporary” taxes eventually become permanent, whether by amendment or by it becoming what is just done every 5 years it becomes regular. Allowing another penny will allow for more growth of government, and more structural obligations such as capital that must be serviced and paid to operate. It will not end here.

I urge you to oppose this bill, and to encourage cities to do what we all do, prioritize based on the constraints we have, and to live within our means, and to say no to wants. No person’s legacy is more important than the long-term health of a city.

Thanks.

Greg Neitzert

Former Sioux Falls City Councilor

1st Amendment Parody Political Satire religion Satire Separation of Church and State South Dakotans State Legislature

10 Commandments in Schools to be printed on edible paper

l3wis February 6, 2025 3Comments

IMAGE: Amazon.com

I guess the legislature figured they could kill two birds with one stone. Not only will kids be able to read about the moral high ground on their classroom walls if their parents don’t pay their school lunch bill they can just eat the 10 Commandments poster. I kid of course, but this article about failing to fund school lunches puts it in perspective. Since schools will be mandated to display the posters and ‘teach’ about the 10 commandments there will be incurred costs, and I can guarantee they will be well North of the $616K wanted and needed to help fund school lunches. I actually think you will never see one single poster in the classrooms because there will be a lawsuit and the law will be thrown out.

Developers Downtown Sioux Falls Sioux Falls

Tifilicious in Sioux Falls

l3wis February 5, 2025 2Comments

With the recent passing of a major developer many readers have been asking me the question,

How much did his company get in TIFS just in Sioux Falls?

I could only find numbers back to 2005 (TIFs were introduced in 1989). Since 2005 the developer received around $40 million in TIFS. The developer also has received TIFs in other SD communities, including RC and Madison and I think out of state. This is $40 million taken from property taxes over decades while residential in this town pay 80% of property taxes while these developers skirt their taxation duty. The developer has also received tax rebates from the city. Oh, and let’s not forget paying the mayor $1M over value for his DT building.

I will admit he did a lot to develop downtown, but we paid for a good chunk of it. I have never spoken with him, but I still remember the council meeting before the 2008 recession where they were promoting another tax scam on the residents of SF, and when we crashed, none of the promises were met by the developers. Shocker, I know. Or how the city sat on the Phillips Loft land for 10 years tax free then sold it to him after he received a TIF.

My condolences to the family, I’m sure his legacy will carry on, oh I know it will, some of these TIFs don’t expire until 2035.

Sioux Falls South Dakotans State Legislature Taxes

UPDATE II: SD House Bill 1055 needs to be killed

l3wis February 5, 2025 4Comments

UPDATE II: I emailed the committee members and told them this was a bad idea. The sponsor was the only one to respond after I told them I think this bill was written for Sioux Falls;

Not written for Sioux Falls.

So I asked WHO it was written for;

Written for all cities.

Well, Mike, that means it was written for Sioux Falls. I find it ironic that city hall recruited a legislator from Ft. Pierre who has a close relationship with our city attorney. I am just speculating here but it just seems odd that they purposely recruited a small town legislator to pass this instead getting some Sioux Falls legislator sponsoring this, it would have had a bad look. And here’s a kicker, two Democratic legislators from SF also say they support this. Baffling that our legislature wants to have a $400 million dollar tax increase on the residents of Sioux Falls. Each penny in Sioux Falls nets $91.5M a year (end 2023 is their latest for this data). So it appears SF really could build it in 5 years if the tax was implemented which would net $457M which is very close to the estimated costs to build a CC. And this bill wasn’t written for SF. They are full of it.

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Or amended to only include smaller towns who may need to build a fire station;

authorize municipalities to impose a new tax to fund capital improvement projects.

This is a 3rd penny tax move so we can borrow $400 Million for a Convention Center. The committee hearing is Thursday morning, I encourage anyone who may be there to speak against this bill, it could cost taxpayers in Sioux Falls $400M.

Advocates,

Please help oppose HB1050. It would allow cities an extra whole percent sales tax for special projects.

The problem: It takes food off tables. That should be enough said.

• Food insecurity is on the rise in South Dakota. It is already a herculean effort for non-profits to meet the need. Feeding SD saw increases last year in families coming for food, student backpacks with weekend food, school pantries, and senior boxes.

• Sales tax is harder on lower-income households than on those with upper-incomes. South Dakota has the 6th most regressive tax structure in the nation.

• Sales tax is very regressive, especially where it’s on groceries. Lower-income households pay a bigger portion of income on food. We have the nation’s 4th highest grocery tax.

• Already, the total(state+city) food tax you pay over a year could buy all your food for over 3 weeks.

• This one percent would be a 50% increase in city sales tax.

• South Dakota is a low-tax state, but not for the lowest-income group. [https://itep.org/whopays-7th-edition/ ]

Other background info:

Legislators console themselves by noting that the bill requires a public vote, has a 5-year limit on the special tax, and a 2-year gap before the next one. But is a short-term hunger increase ok?

Cities are already allowed 2% sales tax. Cities are not allowed to have a different rate on food. States may, but not cities. So there’s no use suggesting that amendment. [Streamline sales tax rules]

No matter how much we might appreciate the legislators who are on this bill, HB1050 is one of this year’s bills toughest on our low-income neighbors. A legislator’s name on a bill doesn’t mean he/she will continue to support it. Feel free to ask them to vote No on it.

What I don’t know is whether this would be useful for small towns. But for sure, Sioux Falls city leaders always have expensive projects they would love to fund, even projects that aren’t necessarily accessible to low-income residents.

Thank you for speaking up. Low-income people don’t have lobbyists.

Cathy Brechtelsbauer for the Advocacy Project

“No other tax so directly takes food off tables.”

On sales tax by long-time director of Feeding South Dakota, Matt Gassen

The 1st Amendment and the Sioux Falls City Council

3rd Penny gets killed in the Legislative Committee

10 Commandments in Schools to be printed on edible paper

Tifilicious in Sioux Falls

UPDATE II: SD House Bill 1055 needs to be killed

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Is Jamie Smith running for Mayor of Sioux Falls?

UPDATE: What’s going on with promised Apartment Complex behind 8th and Railroad?

Nepotism run amuck at Sioux Falls City Hall

BUY LOCAL! BUY IMMIGRANT!