Tuesday, June 24, 2008
Picture Credit to Kevin Woster
I asked the following questions to Rob Skjonsberg, Vice President of Government Affairs at Poet.
Rob served as Chief of Staff to Governor Mike Rounds for five years and prior to that was Vice President and Community Development Representative for Wells Fargo in Pierre.
Q. What is Governor Mike Rounds single most important accomplishment?
A. As governor, without question, the transfer of the Homestake gold mine from Barrick Gold Corporation to the State of South Dakota and the National Science Foundation’s designation as the nation’s site for the Deep Underground Science & Engineering Laboratory.
Elected leaders before him certainly deserve great credit. And, our delegation’s support will be critical as the site moves forward. But, Mike Rounds was the guy that got it over the hump and frankly, kept it alive. I was in the room when that project could have been declared dead on several different occasions. The governor just wouldn’t give up on it. We always found a way to move forward.
A big part of that success was top-shelf people. Guys like Dave Snyder, Dave Bozied, Casey Petersen, Jason Dilges and others – they all played critical roles. We forget about the workers sometimes – but without them turning the wrenches, it never would have happened.
Those days will always be embroidered in my mind, as the most exciting, challenging, game-changing moments during my tenure in government. It’s very similar – I suspect - to the types of discussions that took place when Citibank came to South Dakota. Those opportunities don’t come along very often – maybe once or twice in a lifetime. So it’s important to have people in place that can close the deal.
Today, we can’t even fathom the magnitude of this project. It has the potential to improve the quality of life in every corner of our state and region. I look forward to the day I can take my sons to Lead and tell them the story of how it all came together.
Q. Part of your responsibilities at Poet is to lobby Government. When you were with the Governor’s Office you were on the receiving end of lobbyists’ efforts, are there any similarities in these jobs?
A. Public policy is public policy. Whether you’re an elected official, government employee, private citizen or industry representative – good government should be the goal. The process can get a bit messy and conversations can be fierce – but at the end of the day positive things will happen if those involved start and end with that basic principle. I think most of us involved in the process have that as a common viewpoint.
Q. The tax credits and subsidies for ethanol and ethanol plants were established when crude petroleum was $20 per barrel or less. Today oil prices are north of $130, setting aside the energy independence argument, with petroleum at these historic high prices how do you justify Government support of ethanol?
A. I’ve always been intrigued by this argument. Let me put it this way; if ethanol ceased to exist oil would be north of $150 and gas would be 60 cents more per gallon. Not only should those original lawmakers be commended for their vision when oil was $20 per barrel – current policy makers should be doing everything they can to strengthen the renewable fuels movement. Ethanol is the only immediate alternative to high oil prices. The country’s return on investment has been and will remain phenomenal as long as good policies are in place.
But, I think it’s important to understand the overall tax structure and how it really applies from an economic standpoint.
For example, South Dakota’s fuel tax code has numerous tax rates for different fuels. Jet fuel, off-road diesel, off-road gas, aviation gasoline, compressed natural gas, liquid petroleum gas, and E10 & E85 all have a different tax rate than unleaded gasoline. I don’t consider off-road diesel to get a “subsidy” because it’s not taxed the same as unleaded gasoline. Simply put, I don’t consider it a “subsidy” if the tax is different than a comparable, in this case unleaded fuel.
Actually, South Dakota has a myriad of tax rates, tax refunds, and tax exemptions for almost everything. Take residential, commercial and agricultural land for instance. If we tax residential property less than what we tax commercial property – should we abolish the “subsidy” for residential home owners and hike up everyone’s taxes across the board in order to achieve tax parity? Of course not, because it doesn’t make sense. That’s not good policy.
I’d rather just have the real discussion. If someone wants to make a case that unleaded fuel and ethanol blended fuel should be taxed the same – they should just say that and call it a tax increase on consumers at the pump. That’s a more reasonable approach and helps facilitate an honest dialog about the intent. I’ll gladly have that debate.
Secondly, as it relates to tax credits, at the federal level the blender currently receives a 51 cent per gallon tax credit. The ethanol and corn producer don’t receive that credit. And actually, the recent farm bill reduces that blender’s credit to 45 cents.
Lastly, as it relates to taxation I have a very simple philosophy. We don’t tax chewing gum and chewing tobacco the same, we shouldn’t tax foreign oil and homegrown, clean, renewable ethanol the same either. One costs Americans nearly $2 billion a day and one is reducing the price of gas by 60 cents per gallon. Again, good tax policy takes all things into account.
Q. The Chief Operations Officer of Smithfield Foods (owner’s of John Morrell and Company) recently blamed Smithfield’s extreme drop in profitability (profits plunged 94%) on the consumption of corn for ethanol saying ethanol “is having a substantially adverse effect on our business… and it’s going to cause food prices in this country to go up.” How do you respond to the growing claims that corn should be used for feedstuffs and not energy?
A. I empathize with ranchers who are paying the same prices that we are for corn and we’re constantly looking at partnership opportunities from that standpoint. I have less empathy for folks like the Grocery Manufacturer’s Association that have yet to actually defend their stance. When Senator Grassley attempted to meet with them to discuss their position only one CEO agreed to meet. To me, that speaks volumes about their weak position.
Let’s talk about the facts. The President’s Council of Economic Advisors has stated that ethanol accounts for between 2 and 3 percent of the overall increase in food prices. That means 97% of the inflationary factor is being caused by something else. If this gives you additional insight, in 1947 a bushel of corn and a barrel of oil were priced the same at $2.16. It’s not that hard to figure out what’s driving price increases.
A farmer receives less than 20 percent of the total food costs paid by consumers. More than 4 out of every 5 cents of the cost of food, including transportation, processing, packaging, marketing, distribution and retailing are added to the commodity after it leaves the farm.
That’s why, in an 18 ounce box of cereal priced at $4.95 the farmer gets about 16 cents. In a one pound sirloin priced at $7.99 the farmer gets about 85 cents. Somebody is making money at those prices and it surely isn’t the farmer.
Ethanol has been blamed for everything from the increased price of gummi bears to male pattern baldness. And, I’m only half joking. Saying that ethanol is primarily responsible for increasing food prices, is ludicrous.
Q. Several years ago you were mentioned as a possible candidate for public office, is that something that could still be in your future?
A. I was humbled by the suggestion. But, it just wasn’t practical at the time – I’m pretty sure I’d have lost the popular vote in my own home.
Right now, my hands are full with two young boys, a new career and a new community. Once I’ve mastered those priorities, I’ll worry about the next chapter.
I’ll always be involved to some extent – I imagine.
Q. What would we be surprised to know about you?
A. My mother is a Sisseton-Wahpeton tribal member. With a name like mine – most people are surprised to know that. As unoriginal as it sounds, my family literally has deep ties to this state and I just can’t imagine being anywhere else.
Thursday, May 22, 2008
Scott is a strong leader and has been the catalyst of bringing people together to solve problems. He is a leader in not only Brookings development but also in regional development. His latest effort is the recently announced I-29 Corridor Economic Development effort.
Scott a native Minnesotan is a Chiropractor in Brookings.
Q. Why is Brookings the best City in South Dakota?
A. Asking me that question is a little bit like asking me which of my five daughters I like the best! I truly believe each community in South Dakota has a set of qualities they can proud of. I also understand the importance of the role larger communities like Brookings must play in the development and investment of the communities around us. We are only as strong as our smallest community, and with that statement came the action behind developing our regional partnerships.
Q. What are your two biggest accomplishments as Mayor?
A. As a team, we have brought Brookings from a poor financial position to a position of strength. Our fiscal management, the accountability we have set up with our outcome based budgeting over the last 5 years has proven successful, in conjunction with a focused investment of time, energy and finances in economic development has carried the day. Seeing our community and region forge ahead on solid ground as we enter into the ‘new knowledge-based economy’ is a great accomplishment I share with many in Brookings who have worked together to make it happen. In 2001, when I took office, I made a presentation on Establishing a Vision for Brookings, still found on our city website. We have brought this to fruition.
Q. What is your biggest disappointment?
A. My biggest disappointment was also my biggest surprise: the State of South Dakota. I anticipated our approach in state government would be more involved in what goes on in communities from a strategic development perspective. I was wrong. Cooperative efforts and synergy between all partners in the future of South Dakota, including local and state government, are not what they could, or should be. There are many cooperative efforts in place but there is still much room for improvement. In a state the size of South Dakota this should be viewed as a priority for successful development. As a matter of fact I found it difficult to communicate to the state level the needs of our community and the region in a variety of ways; it is as if there is a huge disconnect between communities and the function of state government. Why do we not have a strategic plan that addresses development from the bottom up, a ‘community focused’ approach? Why do we move towards driving people out of smaller communities without including them in a regional and statewide effort to build them up, integrating them into our long term plan for the entire state? It is sad to say this, but I never once received a call from the administration of our state to find out what our plan is, what we needed to help us out; the effort was always one sided on our part. Brookings is the fifth largest community in the State of South Dakota, if we have these issues, what about all the other communities smaller than us? Please understand, I don’t say this to be critical of any one person in our state government, it is just the way we have done things. We need to think differently and transform our model if we want to create significant impacts.
Q. Brookings is often referred to as the People’s Republic of Brookings. The City owns the utilities, telephone service, is the franchise holder for Sprint Cell Phones for much of Southeastern South Dakota, even the hospital. Scott, as a strong economic conservative in your role as Mayor how do you reconcile your personal philosophy with your public responsibility?
A. Easy. Brookings is an entrepreneurial community. It is a conservative community. Like many other communities, owning your own utilities and telephone service was an important piece in the development of our community. Having control in making investments to expand infrastructure when a private company probably would not (they answer to share holders, not to the electorate) at critical times is a great plus. Our county and city started the hospital when no one else would have, we have maintained it to this point to bring much needed services like kidney dialysis, a loss leader but deemed important to provide. The success of our enterprises adds to the bottom line in our city budget – a budget focused on improving the quality of life for the people of Brookings.
Q. Briefly explain your I-29 Corridor Economic Development initiative?
A. Regional development is simply working together for the common good. We think nothing of seeing farmers helping each other in the field, or borrowing a tool or getting advice from our neighbor. The I29 Corridor project are communities coming together to strategically develop our region as a whole – together we have many resources and we can use them in a synergistic and collaborative way within a regional growth strategy shared by all connected in the region. We are currently developing a memorandum of understanding (MOU) that will unite communities together on this project, we will seek funding from local communities, local economic development entities and the state – (who ever would like to come on board in the endeavor) and we will then commission a detailed study to assist us in developing our regional growth strategy. What will this accomplish? It will allow communities to better understand how we can strategically invest in economic development (and education) in a way that will make an impact in the new economy for generations to come.
Q. How do you see this working better than economic development programs being initiated by State Government?
A. The state has done a good job at identifying target industries for recruiting purposes; but have not initiated the next step: a deeper analysis of industry cluster development. We must as a state make a strong willed effort to strategically develop our whole state, engaging even the smallest communities.
Q. Brookings employers, like Daktronics are opening plants in other cities because they cannot get enough employees, what is the City doing to attract more people to live and work in Brookings?
A. Our growth model is progressing at a strong pace. Brookings has needed affordable housing. We now have several developers stepping up to the plate and this very important piece will be in place to enable us to continue to grow our region. I say region because the key areas (most affordable) to be developed for housing are our neighboring communities who are our regional partners. Additional growth strategies are underway and in the development stages.
Q. What was the population of Brookings in 2003 when you became Mayor? and what is the population today? What were the annual sales tax receipts for 2002 and 2007 respectively?
A. Population for Brookings has been up for grabs. The census in 2003 showed 18,751 and in 2006 18,802. During that time, Brookings added 400 new housing units. A recent housing study we performed in 2007 suggests the census may be short as much as 1500 people. In regards to sales tax revenue: Calendar year taxable sales for city of Brookings were: $285,897,905 in 2002 and $492,059,360 in 2007. This would include retail, manufacturing equipment, and other sales, etc. Sales tax receipts for 2002 - 5,314,220.34 and 2007 – 10,636,781.77. Our general budget expenditures are capped at a growth rate of the CPI, allowing the city to capture surplus budgets the last several years. As I mentioned before, strong fiscal management with strategic investment in economic development/education yields an enviable financial position of strength; the formula for a successful government model – in my opinion.
Q. What three items in your refrigerator might be considered unique or unusual?
A. Okay, I had to ask my wife. Here it is: homegrown horseradish, capers and fish sauce.
Wednesday, May 21, 2008
Patrick Byrne was in Sioux Falls on Thursday talking to Civic and Business Leaders about Initiated Measure 9 – South Dakota Small Investors Protection Act (I will post on this later) and I had the opportunity to speak with him. Byrne is a dynamic individual, very engaging and is a big thinker. One thought that impressed me is that that most of America’s problems can be solved by reforming our Education System and the Capital Markets. His ideas embrace competition and are in the Spirit of America – they worth considering.
Patrick M. Byrne is Chairman of the Board of Directors of the Internet retailer Overstock.com. In 2002 he was named to Business Week’s list of the 25 most influential people in e-business. In the public policy arena he has campaigned against the practice of naked short selling of securities and is a strong advocate of Education Reform. Byrne is a graduate of Dartmouth College, Cambridge University, and holds a Ph.D. in philosophy from Stanford University. Byrne serves as the Chairman of First Class Education, an organization that advocates that 65% of all education monies be spent in the Classroom.
Q. Why do you believe the 65% Solution is the most important reform of Public education?
A. I actually believe that vouchers or school choice is the most important issue. Society has to have a deep conversation about how to deal with the public education system. While that is going on we have to keep things from getting any worse. The 65% Solution is a tourniquet to keep things from getting worse. In many states and many cities the share of the funding that is going to the educrats is getting bigger and bigger and the share that is going to the kids in the classroom is getting smaller and smaller. It (money to the classroom) is basically shrinking every year. That basically is the nature of bureaucracies. They expand. Jefferson said liberty contracts and as I would say now education contracts. We have got to stop that while we have an adult conversation about the way education is organized. I think the right solution at that point is to do some sort of school choice, whether it charter schools, vouchers, tax credits, scholarship grants, etc.
Q. Many educators believe that our culture and lack of parental involvement is the prime cause of the decline of education excellence in America, do you agree?
A. Well there is some statistics and data that supports the view that parental involvement is important. But that really is a way for people who are selling an inferior product for a higher price, mainly our public school system to blame the parents. They don’t want to have to reason how they are doing things so they are just blaming the parents.
Q. Is testing alone the key to educational accountability?
A. My answer to that is I don’t know, and I respectfully say you don’t know and none of your readers know, nobody really knows what is going to fix it. The only thing that is in my view to find out what is going to fix it is to have a system where there can be innovation. Where you can have one hundred flowers bloom, where you can have competition and people testing out different theories. Maybe it’s more mandatory parental involvement, maybe it’s more focus on math, maybe it’s more focus on whole language learning, maybe it’s more focus on cultural studies. I don’t pretend to know the answer. You need a school system that permits there to be a wide variety of experimentation and not a one size fits all. And then the better solutions will float to the top.
Q. Higher education costs have skyrocketed. What can be done to get them under control?
A. I actually think that we are getting good value for our money. The U. S. higher education system is the envy of the world. It is our K-12 that is a disaster. We actually do pretty well up through the 4th grade. By the time kids are sixteen years old, we are at the bottom of the heap as a nation. We are at 25th out of 30 industrial countries. Our primary and secondary is at the bottom of the heap. Our higher education is the envy of the world. Now the reason for that is that the higher education system allows competition. The G I Bill, Pell Grants, etc. – people get to choose their school. So the providers have to be responsive. Higher education is getting more expensive and it is getting more expensive at a higher rate but I think it is still probably and underpriced good. The K-12 system is a terribly overpriced system and an over priced good, probably overpriced by a factor of two or three times. The higher education system is still a good value for the money.
Q. In South Dakota we have our 4% state sales tax that generates about $700 million annually. Our elected officials and politicians estimate that we lose as much as $75 to $100 million annually to Internet Sales along with hundreds of Main Street jobs. Why should Internet Sales of goods not be taxed?
A. Internet sales do not put the same load on local infrastructure as say having a local Walmart does. To shop at Walmart you have people driving on the roads to get there, you’ve got kids going to schools, you’ve got power plants and water utilities infrastructure that has to be paid for. That isn’t the case when you order through the Internet that is showing up through the Post Office.
Q. You have been a reformer in the economic arena working to reform the practice of Naked Short Selling of securities. As a former CEO for a Berkshire Hathaway company, do you agree in principle that corporate compensation is excessive and the Boardrooms need reforming?
A. Yes. I think Buffet right on there. That young fellow is going to go places.
Q. What do you think are the best and worst things about living in America?
A. I am sort of a Jeffersonian Libertarian and old school. I am as about blue blood patriotic as you can get. I do feel at the risk of sound a little old that we are nearing the end of a 230 year old experiment. I feel very badly about it and I have been doing everything I could to try to do something about it. But I am feeling bad especially since the financial meltdown that has started that I think is going to continue and the sad part is we are fast on our way to becoming Britain 1961. It is not going to be like the recession of 79-82. This is going to be a generational thing. It is going to take us half a generation to get out of this and get back.
Originally posted on April 24, 2008
I sat down with former Senator and Democrat Presidential Candidate George Mc Govern today for a brief chat. Senator Mc Govern needs no introduction.
He was as glib, very with it and political as ever. He was more on his game today than even during his losing Senate campaign in 1980. He was very engaging and has aged well. He spends most of his days at his office at the Mc Govern Center in Mitchell.
Senator McGovern was candid. Particularly candid in speaking about Ethanol, his loyalty to the Clintons, and his belief in developing and using nuclear energy - as he put it for peacetime purposes.
Q. This year the South Dakota Democratic Party had a record year for legislative recruitment and is poised to make a strong challenge to Republicans for a majority of the State Senate in the 2008 election. As the Father of the Democratic Party in South Dakota what advice will you give the Party activists when they meet this weekend on Mc Govern Day to enhance their efforts to achieve the majority?
A. The first thing is we need to fill these slates at every opening with good candidates at the Court House level, Legislative level, and the Congressional level. We need a full slate of the best candidates we can recruit. A lot of that has been going on this year. I think the Democrats have a real chance of capturing the State Senate in terms of the majority. And they even have got a shot at the House level although that will be more difficult.
Q. You are supporting Hillary Clinton for President, why do you think she is the best candidate for America and For South Dakota?
A. I endorsed Hillary last fall in October because I have known her for 35 years. She and her husband Bill, before they were married were working for me and my Presidential effort. They worked night and day so I don’t forget things like that lightly.
Q. You are a champion for feeding the hungry and have been an advocate for production agriculture. Today demand for food has caused world food prices to skyrocket and is causing famine and food shortages around the world. Today approximately one third of U. S. corn production is for energy production; with many people going hungry how do you reconcile agriculture for food and for energy?
A. I wish we were working harder to find alternative sources of energy. I don’t know why we are moving so slowly on wind power. I have seen some of these big wind mills go up and that is a good thing, but we need to multiply that several times over. We need to do more to find methods of cleaning up the coal supply in the Country, of making it safe to burn with less pollution. We need to even consider the possibility of developing nuclear power for peacetime purposes.
There are various things that you can do on the fuel side other than going to Ethanol. For the time being I think Ethanol has been a great economic stimulus all across rural America and especially here in South Dakota – so I don’t want to knock Farmers and their supporters for developing Ethanol. There will become a time when that won’t be enough and we ought to be working now to find alternative sources of energy.
Q. Many Americans feel the government in Washington does not work. What one thing could be done as a big first step in correcting this?
A. Maybe to develop Voters that choose a little more wisely. I was on an airplane the other day and a fellow after 3 martinis reached across the aisle and tapped me on the shoulder and he says you’re Mc Govern. I said that’s right. He said I want you to know that I don’t respect you politicians. I said that is interesting because I had days when I don’t have too much confidence in the voters.
So I think raising the level of knowledge about what is going on in the world and what our needs are and how best to meet them has to begin with the Voters.
I think we pretty much get what we deserve from the people we elect to high office. I would like to see Office Holders performing better but this is a democracy. Perhaps it is not too harsh to say people get pretty much what they deserve.
Q. What is the best thing that you are doing at the McGovern Center?
A. Making students aware of the importance of service in their lives. No matter what occupation you go into there are opportunities for service if you are oriented in that direction. In other words we need to think beyond our own immediate selfish interests to what would help the greatest number of people. To me that is the biggest emphasis that can come out of the Mc Govern Center.
Q. At this time in your life where do you find the most joy?
A. With my grandchildren and with my daughters and with my son. I was always so busy during those 22 years I served South Dakota in the Congress, running for President, running for the House, running for the Senate. Now I have got more time and I have a little better perspective on what is important. As you get up in years as I have, I am now 85; you begin to think what do I most want to do?
And I think whatever years I have left, spending more time with my 3 daughters, my son, and my grandchildren and great grandchildren, those are the things that give me the greatest pleasure.
Originally posted on April 17, 2008
Saturday, April 12, 2008
He practiced law in Denver for a few years and for the past 15 years has been a business executive with his family business. He served as vice chairman of the Ellsworth Task Force that successfully worked to reverse the closing of Ellsworth AFB. Chris,his wife, Julie, and 7 year old daughter reside in Rapid City.
Chris is the real deal and presents a real opportunity for the GOP and a real challenge to the incumbent.
South Dakota Q & A will be a periodic feature of South Dakota Straight Talk.
A. Many people have told me that I listen very intently when communicating. In addition to this, I always strive to take time and analyze every option before making a decision. Most importantly, I am proud of my family’s past and future in South Dakota. My daughter Annie is a 5th generation South Dakotan.
Q. What is your greatest weakness?
A. My wife has told me that my enthusiasm for this race causes me to talk too fast some times. Thus giving people the appearance that I'm nervous.
Q. Why are you running?
A. Because I love South Dakota and this Nation and I believe everyone should serve both in some fashion. Running for this office is the choice I made to do just that. Further, I want to be a part of a body that debates and deliberates for the sake of good legislation rather than gaining individual credit or headlines.
Q. Why and how will Chris Lien be different in making progress on the nation’s problems?
A. Because my approach has been, and will be, to analyze each issue and make my decision based on long term solutions rather than the hope of being reelected in two years; listen, do your homework, know the facts and talk with not only your colleagues, but your opponents as well.
Q, Would you have supported the stimulus package that was recently adopted and what effect do you feel it will have?
A. I found it very interesting that Congress, when faced with a need to improve the economy relied on the judgment of the people by giving back some of their money. With this decision, Congress admitted the right thing to do, when confronted with an economic dilemma, is let individuals keep more of their money rather than send it Washington.
Q. What specifically is your position on the War in Iraq?
A. Finish the job.
The justification for being there and the wisdom of our entry into this conflict are worthy of discussion and debate. However, debating our entry should not drive decisions regarding our future course of action. We are there now and need to make decisions based upon the current state of our actions and the potential implications of our actions going forward.
This is one of the most critical periods in American history. We have a faction of radical Islam that has a single mission of destroying the American free enterprise system and our way of life. Our decision to defend America and Freedom has made the United States a focal point in the world today. Therefore it is critical to show that when we start a job we finish it. More specifically, in terms of the people of Iraq, that job is to give them the ability to put down the guns of war long enough to learn how to pick up and run with the baton of democracy. With respect to the American servicemen and women and their families who have already paid the ultimate price for every one of us; finishing the mission must honor their sacrifice. Our responsibility moving forward is to complete this duty as quickly and honorably as possible.
Q. Name one little known fact about Chris Lien.
A. I have being flying airplanes since I was 14 years old.