South Dakota

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For the fiscal year that began in July, Illinois assumed a revenue boost that it and most states have long been waiting to get on the books — tax collections from remote sales. The state’s assumption is $150 million, based on the nine months that those collections can begin after Illinois’ “economic nexus” law takes effect this fall. (Spread over the course of a full fiscal year, the estimate rises to $200 million.)
In the years ahead, this revenue source is expected to be part of budget estimates and collections in every Midwestern state, thanks to the U.S. Supreme Court’s June 21 decision in South Dakota v. Wayfair(unlike Illinois, most states did not include an increase from online sales tax collections in their FY 2019 estimates).
By a vote of 5-4, the justices overturned a 1992 ruling, Quill Corp. v. North Dakota, that had barred states and local governments from requiring vendors with no physical presence in the state to collect sales taxes. In the years since Quill, online transactions skyrocketed, calls among brick-and-mortar businesses for sales-tax fairness intensified, and multiple attempts at congressional action (always an alternative to a new court decision) failed.
“Hooray for South Dakota,” John Hicks, executive director of the National Association of State Budget Officers, said, noting the state’s passage of legislation in 2016 that became the basis for challenging, and eventually overturning, Quill.
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For the first time in 20 years, South Dakota legislators are in line to receive a pay raise — big news in a state that has had one of the lowest legislative compensation levels in the nation. Starting next year, the salaries for South Dakota’s 105 part-time legislators will be adjusted annually to equal 20 percent of the state’s median household income. That means a jump in annual pay from $6,000 in 2018 to an estimated $10,200 in 2019.
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During the first year of a South Dakota law that raised the state’s sales tax rate in order to boost teacher pay, average salaries increased by nearly $5,000 — to $46,979 in 2016-17. This change means the state no longer has the lowest average teacher salaries in the country; it now ranks 48th, according to the most recent study done by the National Education Association. South Dakota Gov. Dennis Daugaard notes, too, that his state ranks 29th when the these averages are adjusted to reflect state and local tax burdens as well as regional price parity data.
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The U.S. Department of Commerce reported that real gross domestic product increased 2.3 percent nationally between 2016 and 2017, but agriculture subtracted from overall economic growth in every state in the Midwest — most notably Iowa, Nebraska and South Dakota.
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Since 2015, a big change has occurred in how South Dakota handles young people in its juvenile justice system. “Some of these kids didn’t need to go to a juvenile detention center,” Rep. Julie Bartling says about the thinking behind the legislation passed that year (SB 73). “They just needed a little more support.”

Three years later, the state is starting to see results from this shift.
According to Kristi Bunkers, director of juvenile services for the Department of Corrections, the greatest advance has been the statewide expansion of three evidence-based programs that allow young people to receive treatment in the community rather than being detained at a residential facility or correctional center. For example, through a three- to five-month-long intervention program known as Functional Family Therapy, a young person and his or her family work through family conflicts while addressing problems of drug abuse or a range of antisocial behaviors. Of the South Dakota families who completed the program last year, 92 percent demonstrated positive behavioral change.
Like South Dakota, many states have been re-examining and, in some cases, overhauling their juvenile justice systems in recent years.

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