Joshua Haiar, South Dakota Searchlight
PIERRE — State Sen. Chris Karr didn’t like the way former Gov. Kristi Noem’s administration spent money without legislative approval or oversight.
Neither did his colleagues, judging by the support he’s received for a legislative package he dubbed “three big, beautiful bills.” The package, which is headed to the House after its unanimous approval by the Senate, would establish new restrictions on the kind of state government spending, leasing and fund transfers that Karr said the Noem administration abused.
“There was a pattern of saying, ‘We don’t need to get permission — we’ll just do it,’” Karr said. “These bills make sure that doesn’t happen again.”
The Sioux Falls Republican has served in the Legislature since 2017. He spent much of that time on the main budget committee, sometimes butting heads with fellow Republicans in the Noem administration over spending. He was elevated to the position of Senate president pro tempore this legislative session.
Large GF&P expenditures
The first bill would mandate that any Department of Game, Fish & Parks projects over $2.5 million receive legislative approval.
Karr said the department’s $20 million shooting range complex north of Rapid City proceeded despite lawmakers rejecting funding requests. He said the department is building the shooting range using a mix of its own budget, donations and a discretionary fund controlled by the governor, thereby bypassing legislative approval.
“We have to strike a balance,” Karr said. “Nobody wants to call a special session to approve picnic shelters or boat ramps, but when taxpayer dollars are going toward multi-million-dollar projects, the Legislature should be involved.”
Oversight on long-term leases
The second bill would require any lease exceeding 15 years and $5 million – or costing more than $50,000 per month – to receive legislative approval.
Karr highlighted the controversial One Stop government service centers in Sioux Falls and Rapid City as examples of why the measure is needed. The Noem administration entered into 30-year lease agreements that will ultimately cost the state hundreds of millions of dollars to consolidate state offices and employees in the buildings, without legislative approval.
Skirting legislative approval, not owning the building despite the large investment, and the long-term spending obligation have some lawmakers upset.
“Not a good process,” Karr said. “I don’t think anyone thinks that’s a good process.”
Blocking budget transfers
The final bill would tighten restrictions on budget transfers within state agencies. Currently, agencies have the authority to shift funds between budget units in the same fund, with approval from the Bureau of Finance and Management – which is part of the executive branch. The bill would additionally require legislative approval.
Karr referenced an instance when the Department of Corrections transferred funding and staff positions between prisons without informing lawmakers. Under the legislation, such transfers would have to receive approval from the Legislature’s main budget committee.
“This ensures that the budget we pass is the same one we come back to next year,” Karr said. “It prevents agencies from shifting money around after the fact and fundamentally altering the budget we approved.”
The Future Fund
Karr has also been a vocal critic of Noem’s use of the Future Fund, which is under the governor’s exclusive control.
South Dakota employers pay a fee to the Future Fund when they submit payroll taxes to the unemployment benefits program. State law says the Future Fund must be used “for purposes related to research and economic development for the state.” Unlike other funds administered by the Governor’s Office of Economic Development, Future Fund expenses don’t go through a board of citizen appointees for vetting or approval.
Noem’s uses of the Future Fund included $13 million to help construct the Rapid City-area shooting range, $2.5 million to promote and conduct a Governor’s Cup rodeo, and up to $9 million on a workforce recruitment campaign starring herself.
Frustrations with Noem’s controversial uses of the fund motivated the Legislature to pass a bill last year requiring the administration to present twice-a-year reports on the fund to the Legislature.
This year, Rep. Liz May, R-Kyle, introduced a bill to do away with the Future Fund altogether. She and others, including Rep. Marty Overweg, R-New Holland, said the fund undermines the Legislature’s power of the purse.
“This is taxpayers’ money,” Overweg said. “This isn’t some magic money.”
The bill failed 32-36 in the state House of Representatives.
Opponents of the bill said the state’s new governor, Larry Rhoden, should be given a chance to use the fund appropriately.
Rhoden, the former lieutenant governor, was elevated earlier this year when Noem left to serve under President Donald Trump as his secretary of the Department of Homeland Security.