Each person hired as an employee at the South Dakota Developmental Center, whose
primary duties include patient care or supervision, shall submit to a criminal background
investigation, by means of fingerprint checks by the Division of Criminal Investigation and the
Federal Bureau of Investigation. The Developmental Center shall submit completed fingerprint
cards to the Division of Criminal Investigation before the prospective new employee enters into
service. If no disqualifying record is identified at the state level, the fingerprints shall be
forwarded by the Division of Criminal Investigation to the Federal Bureau of Investigation for
a national criminal history record check. Any person whose employment is subject to the
requirements of this section may enter into service on a temporary basis pending receipt of
results of the criminal background investigation. The Developmental Center may, without
liability, withdraw its offer of employment or terminate the temporary employment without
notice if the report reveals a disqualifying record. Any person whose employment is subject to
the requirements of this section shall pay any fees charged for the criminal record check."
Thank you very much for allowing me to serve you this past year. It was one year ago today that
I walked into my office for the first work day as Governor, and it's been an honor every day
since then to serve this great state.
I am also honored to work and serve with the public servants gathered here today, and there is
one I would like to particularly mention today. Moments ago, we heard a familiar voice
announce my arrival in this Chamber. We've heard this same voice now for over 20 years. The
House Sergeant-at-Arms, Mel Chandler. This will be Mel's last year working for the legislature,
and I want to thank him for his years of service to our state. Will you help me - Mel!
Now Mel you still have to work this session!
It is my duty and pleasure today to report to you on the "State of the State", and I am pleased to
say South Dakota and her condition has improved since we last met at this time last year. South
Dakota is moving forward. It's not the best of times, but neither is it the worst of times. We
have reason to be hopeful.
Today, because of tough budget decisions you made, our state is on stronger financial footings,
and because of the hard work of the people of South Dakota our economy is also stronger in
spite of what may happen on Wall Street or Washington, DC.
Our unemployment rate is lower, and non-farm employment numbers are increasing, but we
have not yet returned those numbers to pre-recession levels, and there is still great uncertainty.
We are recovering, but we have not yet fully recovered. That is why, last month, I proposed a
conservative budget that departs from freezes and cuts, and returns to formula increases, but still
guards against a downturn. My budget spends 99 percent of the revenues we project to receive,
but still leaves money on the bottom line against uncertainties in case we need it.
Beyond economic progress, we have made efforts in other areas as well. Last year, in my first
State of the State address, I spoke to you about the problem of infant mortality in South Dakota.
Every year, on average, 80 infants die in South Dakota before their first birthday. The infant
mortality rate is one of the most important measures of a population's health, and we can do
better. Consequently, I convened a 27-member task force, led by our First Lady, to recommend
ways to address this problem.
The task force identified four key improvement opportunities. First, we need to ensure access
to early and regular prenatal care, which is vital to a healthy pregnancy. Second, too many South
Dakota mothers smoke during pregnancy which puts the health of an infant at risk. Third, safe
sleep practices, like having a baby sleep on its back in a crib without loose blankets, that makes
a difference. And fourth, we need to address these disparities within Native American
You will be hearing more in the coming months about these efforts, but today, I can announce
we will use available funds to expand the Bright Start Home Visiting program. Bright Start is
a voluntary program under which specially trained nurses visit high-risk pregnant women in
their homes. My budget proposes to expand Bright Start to four new communities beginning
with Pine Ridge and Cessation.
In addition, the state will be redoubling efforts to educate new parents on safe sleep practices,
and we will use existing funds for tobacco control to educate the public about the dangers of
tobacco use during pregnancy.
I would encourage you all to review the task force's report, and I know that Linda will be
presenting to both health committees about this work. I want to thank Linda and the entire task
force for their commitment and time. I sincerely hope their efforts will help more South Dakota
children live to see their first birthday.
Another task force that worked hard this year was the Medicaid Solutions Workgroup. We all
recognize the challenge that Medicaid poses to our state budget. Medicaid is second only to
education as a portion of our general fund budget. We face increasing enrollments, increasing
costs of those enrolled, and falling federal support of Medicaid as our personal income growth
is stronger than the nation's.
I formed the Medicaid Solutions Workgroup during the last legislative session to see what we
could do to control the growth of this expenditure category. Legislators, health care providers
from around the state, my staff, and others interested in Medicaid all participated - over 80
people in all, and the task force continued to meet through the session and into the rest of this
year. The task force issued its report last month.
What they found was that South Dakota's Medicaid program, first of all, is an efficient and
conservative program. We have never had many of the expensive options that now burden other
states, and there are not many things consequently that we could cut. The group focused instead
on key cost-drivers in Medicaid - care for people with chronic conditions, high cost services like
neo-natal care for premature babies, prescription drugs, institutional services, and emergency
room use. After much research and discussion, the workgroup developed a dozen key
Two of these recommendations have a direct impact on the budget I proposed for FY13. The
Department of Social Services budget includes a reduction of about $340,000 in general funds
as a result of increasing co-payments for prescription drugs and implementing an annual cap on
dental services for adults. Other recommendations will take longer to accomplish - proposals
to manage care differently for those with chronic conditions and to help people stay in their
homes longer or in their communities longer to avoid higher cost services.
The Workgroup recommendations provide solutions that make sense for South Dakota, and I
appreciate the efforts of everyone who has participated. I especially want to thank Senators
Corey Brown, Jason Frerichs, Jean Hunhoff, Deb Peters, and Bruce Rampleberg, as well as
Representatives Suzy Blake, Justin Cronin, and Scott Munsterman for their efforts on the task
This year we've also seen and addressed the severe mountain pine beetle epidemic in the Black
Hills, which has left large swaths of dead trees in its wake. Over 400,000 acres in the Black
Hills forestland are infested with this pest, which has spread from federal land onto state land
and private property. As a result, the potential for massive forest fires is very high. Through the
Black Hills Forest Initiative, state crews working with private landowners, are taking on this
threat by identifying and marking tens of thousands of beetle-infested trees and providing
50 percent cost-share for their removal. The response to the program has been huge, in fact, over
double what we anticipated, and it has encouraged local governments, as well, to participate in
other cost-sharing arrangements.
In addition, state staff, private contractors, and inmate crews are working to address this
infestation in Custer State Park and other state lands. Of 142,000 identified trees that are in
infested, more than 30,000 have already been cut down. All 142,000 trees are scheduled to be
cut down by March 30th. Further activities will re-commence next fall. The pine beetle
epidemic remains a grave threat to the Black Hills, but our continuing efforts will slow the
spread of that epidemic.
This summer I also announced a "Better Government" initiative - an ongoing focus on making
state government more open, more efficient, and more accessible.
I asked my cabinet to conduct a Red Tape Review, to eliminate regulations or statutes that are
out-of-date or unnecessary and to simplify those that are too complex. I am proud to say that
they exceeded my expectations in this first year. We will be bringing 22 bills, totaling 168 pages
in length, to repeal unnecessary regulations and statutes. Through these bills, as well as through
the rules process, we will propose eliminating nearly 1,100 rules and 200,000 words from the
Administrative Rules of South Dakota. Additionally, we will recommend the repeal of over
400 sections of codified law. This is the first year of our effort, but it won't be the last. I hope,
as legislators, you will exert your own effort toward reducing the numbers of laws and
regulations which burden our citizens, equal to the effort you exert toward initiating new ones.
My administration has also sought to make government more open and transparent. We have
released the list for the Governor's Hunt and other economic development events. We've also
made public the names of those who sponsor those events. We've opened the Governor's
Mansion and Valhalla to regular public tours for the first time in our state's history. We've
released more information from the Department of Corrections. We've made the Governor's
Office of Economic Development more open than ever before. In fact, every recipient of a state
economic development loan or award administered by GOED is now available for viewing
online. Finally, we've added more functionality and more information to open.sd.gov and
created better search function to the state home page. If you haven't visited the state home page
in recent months, I encourage you to do that. I think you'll be pleased with what you find.
Finally, we've made great strides toward allowing our citizens to go online, rather than wait in
line to interact with their state government. I am proud to announce today that more than
20 permits and licenses can be obtained fully online for the first time, and that many more have
been identified for this upgrade. This saves time and effort for our state workers and again we
are just beginning this effort, which will be ongoing.
Of course, my top priority of the past year has been creating jobs and growing the economy, and
I am proud of the progress we've made this past year. We've added more than 5,000 jobs in the
last two years, and the number of jobs in South Dakota has nearly reached its pre-recession
peak. Our unemployment rate, which has been among the three lowest in the nation, has fallen
again to 4.3 percent.
When I started my term as Governor, I asked the Governor's Office of Economic Development
to redouble their effort and their emphasis on economic development efforts for businesses
already here in South Dakota. The statistics show and I truly believe that South Dakota's most
important job creators are the entrepreneurs and businesses that are already in South Dakota. In
2011, the Office of Economic Development assisted 61 companies with expansions through
financing or technical assistance. Of those, 73 percent are existing South Dakota companies.
So they are doing as I had asked.
I also want to listen to South Dakota business. Since I took office, the Lt. Governor and I and
the GOED staff have visited more than 250 existing South Dakota businesses to encourage them
to grow and expand in South Dakota and to listen. We asked them to tell us how can the state
help you be better, be bigger, have more jobs.
We've seen that businesses are expanding and adding workers all over South Dakota. In
Watertown, OEM Worldwide is undergoing an $11 million expansion that will add 150 jobs.
In Spearfish, TMone has opened an office that's already created 60 jobs and expects to add
more. Adams Thermal Systems in Canton is adding 50 jobs as part of its fifth expansion in
Canton since 2005. We've seen job announcements in Madison, Yankton, Sturgis, Mitchell,
Vermillion, Rapid City, and other places.
There's also been good news in the financial services industry. When the federal credit card
regulation scheme changed, and that caused job losses in this industry, many of us feared that
we would never get those jobs back, but we are seeing promising signs. This fall, Capital One
acquired the HSBC credit card business and announced they would not only retain the 400 jobs
there in Sioux Falls, but add 400 more. They've already begun hiring at a pace of 50 a month,
50 a month, and then 100 a month, 100 a month and plan to fill all jobs before summer.
Even as the national economy continues to struggle, South Dakota is bouncing back because of
our strong business climate in South Dakota. The Small Business and Entrepreneurship Council
ranked South Dakota #1 in its Small Business Survival Index. The Tax Foundation ranked
South Dakota #1 for our State Business Tax Climate, and we continue to have the lowest
per-capita tax burden in the nation.
I have to tell you - I attended the Western Governors Association meeting in California last
month, and Pat Costello went with me. We stayed an extra day and half and met with business
leaders in Southern California about opportunities in South Dakota. We put together a slide
presentation that compared South Dakota's business and tax climate to California's, and it almost
felt unfair. It was like shooting fish in a barrel. California has taxes we've never even heard of,
and like many states, they are looking to raise them again.
We are lucky to live in South Dakota, where we still understand the role of government and the
importance of a balanced budget. Over the past year, we have moved South Dakota forward in
these and many other areas - many, many, too many to recite today. I want to thank my cabinet,
my staff, and all others who helped achieve these successes and for your support to make them
I would like to spend the rest of my time now to talk about two important issues that we must
address in order to keep South Dakota moving forward. The first of these issues is Workforce
and the second issue is Teaching. First, let's talk about Workforce.
I mentioned a moment ago that I've been visiting existing South Dakota businesses to encourage
them to expand here in South Dakota. I've heard good news on these visits. Many South Dakota
companies have expansion plans. They appreciate our business climate because they don't face
the barriers to growth they see in other states. Many of these businesses are in multiple states,
so they have a basis for comparison, but I did hear about one major barrier we need to address.
One of my visits was to Raven Industries, a technology firm that employs more than
1,000 people in our state. Business is good at Raven, and in 2011 they added 200 jobs in Huron,
Madison, and Sioux Falls. They told me they are planning to add another 100 jobs in
engineering and other skilled fields. I was excited about what that meant for South Dakota until
they told me they were planning to add those 100 jobs in Texas. They didn't believe they could
find another 100 engineers in South Dakota.
I've heard similar concerns from other South Dakota employers about the difficulty of finding
skilled workers, and the numbers bear them out. Our Department of Labor and Regulation has
nearly 10,000 job openings in our employment system. Many of these job openings are for
skilled or professional positions, welders, engineers, and accountants - jobs like that.
Meanwhile, fewer than 100 welders, engineers, IT specialists, and accountants are receiving
unemployment benefits in South Dakota today.
This is a significant barrier to employers who want to expand in South Dakota. We have
incredible professionals and technicians, but we need more of them. We need more of them.
South Dakota is better positioned in terms of our climate than almost any other state in the
nation, but we must do more to address our workforce challenges.
So today, I am proposing an effort we're calling "South Dakota WINS", short for "South Dakota
Workforce Initiatives." South Dakota WINS is a twenty-point plan, in four categories to get
more South Dakotans trained and ready to work in a rapidly growing and changing South
The first category involves preparing our children. South Dakota WINS when our students are
prepared to compete in a modern, high-tech economy.
It's hard to overstate the importance of science, technology, engineering, and math in this
modern economy. Nearly every high-need career field relies on a strong foundation in these
areas. The first component of South Dakota WINS emphasizes science and math education by
rewarding math and science teachers for teaching in this high-demand field. This is very
important, because nothing lights a spark better than an effective and outstanding teacher. I'll
speak more about that in a minute.
We also want to provide opportunities to inspire future scientists and engineers outside the
classroom. Hundreds of South Dakota students have experienced "scrubs camps" organized by
our state Department of Health. Scrubs camps are free, one-day, hands-on health career camps
for high school students. Scrubs camps successfully introduce challenges to students in
incredibly important medical fields. Our experience has shown that students participating in
these camps are highly likely to pursue careers in medicine and other health fields.
We need to expand the scrubs camps concept into engineering camps, technical camps, and
math camps. The scientists, engineers, nurses, and doctors of tomorrow are already in our
K-12 system. Tonight as they go to bed, they may not understand the value and importance of
math and science, but over the next few years we'll use the tools at our disposal, in and out of
the classroom, to show them the possibilities. There are more elements in that first category but
I ask you to look at the plan later. I am going to move onto the second category.
The second category involves training for skilled jobs. South Dakota WINS when our workforce
is qualified and prepared for all types of careers.
An economy needs more than engineers and doctors to flourish. We need skilled and trained
technicians who know how to make things. We need more training for those skilled jobs.
Our technical institutes provide graduates that our state needs, and I want to see technical
education in South Dakota expand. Our state doesn't have enough welders for example. We
need a new welding program at Mitchell Tech and we're going to work to provide that. We also
need to develop hybrid courses so that people that are located outside the communities served
by a tech school can still get that kind of training, to deliver that kind of training online and in
the lab. Likewise, we need to expand the welding program in our corrections facility at
Springfield, and the plan includes an effort to do that.
I'm also proposing next year that more than 2,000 of our high school students take the National
Career Readiness Certificate test. The NCRC is a national certification program used to
determine if workers have the skills to succeed in this modern economy. Promoting this
certification will help our students demonstrate that they have the job skills to make them good
employees - whether they continue their education or go right into the workforce.
I am also reallocating almost a million dollars a year in Community Development Block Grant
funds toward workforce training. Over the years CDBG dollars have had a tremendous impact
on South Dakota, helping to build fire halls, waste and drinking water systems, and community
centers, and we'll continue to do that. CDBG funds will continue to help us do that at the same
time it is also allowing for training dollar match programs in communities where they want to
undertake training of that sort.
The third category of our Workforce Initiative is to promote health care occupations, especially
in rural areas. South Dakota WINS when every citizen of our state - no matter where they live
- has access to quality healthcare.
Across our state, we have rural communities working hard to succeed. Quality healthcare is vital
to those communities, but in rural areas 59 of South Dakota's 66 counties are medically
underserved - 59 of our 66 counties are medically underserved. This is a workforce issue
because to have quality healthcare, you have to have quality healthcare professionals. The third
component of South Dakota WINS improves access to rural healthcare.
Primary care is the care a patient receives at the first contact with the health care system.
Nationally, and in South Dakota, more young doctors, nurse practitioners, physician assistants
- they're choosing to practice as specialists in dermatology, radiology, and other specialties,
instead of in primary care. Instead of in fields like pediatrics, or obstetrics, or family medicine,
or internal medicine. We need more primary care providers. And, we especially need more
primary care providers in rural South Dakota.
We need to train more doctors at our medical school, and we need to put programs in place to
keep those doctors in South Dakota, and to encourage them to choose primary care practice in
rural areas of our state.
As one point in this category, I support expanding the Medical School by four additional
students per year, beginning this year. I also support exposing more medical students to rural
practice, as part of their third year in Medical School.
Now, a majority of physicians who attend medical school in South Dakota, and who enter a
residency program in the South Dakota, stay in South Dakota to practice medicine, and I want
to work with the major health systems, communities, and others to determine the feasibility of
creating additional residencies in South Dakota so we don't train our medical students in South
Dakota, have them go to residencies in another state, and never come back.
In addition to doctors, mid-level professionals like physician assistants and nurse practitioners
also play a critical role in rural healthcare. As a second point in this category, I am proposing
that we expand the physician assistants program at USD to double the number of available spots
for in-state students.
Over the last few years, we've also seen some success in the recruitment and retention of rural
healthcare providers. Our tuition reimbursement program for physicians, dentists, and midlevel
providers is working. Thirty-one contracts have been created under those programs, and today,
22 of those professionals are still practicing in their rural communities. Philip, Belle Fourche,
Hot Springs, Howard, Scotland, Flandreau, Mobridge, Gettysburg, Wagner, and 21 other
communities have participated in this program, and it is improving healthcare in rural South
Dakota. I am calling for an expansion of the tuition reimbursement program.
We also have had a program to help health care facilities recruit nurses, lab techs, and other
professionals through a signing bonus like arrangement. Nursing homes and hospitals in rural
South Dakota have told us they need to be able to offer greater incentives to these folks to get
them to come. We will be introducing legislation to expand this program by providing a higher
payment incentive for nurses and other high need providers at rural facilities.
The fourth category of South Dakota WINS, our Workforce Initiative, involves recruiting
workers to South Dakota. South Dakota WINS when our working population grows by
welcoming new skilled workers and encouraging the return of those who have left.
Despite aggressive efforts in the classroom, and at the tech schools, in the medical arena, the
efforts I've described won't be enough to meet our workforce needs. There are 1,466 unfilled
jobs in this state in the engineering, information technology, accounting, and skilled worker
fields today. All our training programs are for tomorrow. There are fewer than 100 South
Dakota workers today in those careers receiving unemployment benefits, so the fourth category
of South Dakota WINS brings professional and skilled workers into our state to fill this gap.
The Dakota Roots program, you've heard of I know, brings former South Dakotans back home
by matching them with job opportunities in this state. Dakota Roots has helped more than
2,000 families relocate to South Dakota. By expanding the outreach and aggressiveness of that
program and by targeting areas of highest need, we are going to bring even more South
Dakotans back home.
But we won't stop there. As skilled workers in other states face continued high unemployment
and an uncertain future, South Dakota can offer them better. We can be their land of
Last year at the state fair, my family received the Century Farm award. It was in 1911 that my
grandparents Martin and Margaret Daugaard bought our family farm. They came from Denmark
hoping to find a better life for themselves in South Dakota. They knew South Dakota offered
them a chance, and they sought nothing more than that. My grandparents worked as hard as
people can work, and together, they built a life in this state. Many of you have similar stories
about your families. Today, as in the past, South Dakota offers something special for those that
value community, and hard work, and family.
Have we done enough in recent years to share that story? Do those that share our values, but live
elsewhere, know what we have to offer? Do they realize that South Dakota can be their land of
opportunity? The time has come for us to be aggressive in selling South Dakota - not just to
companies that want to move here, but also to skilled workers and families that can make our
companies and our communities more successful.
Today I am announcing an innovative and first-of-its-kind relationship to attract a new
generation of skilled pioneers to our state. The "New South Dakotans" initiative will partner
state government with South Dakota businesses and with Manpower, the world's largest
workforce recruiter. Together we will work to identify and place 1,000 professional and skilled
workers from outside of our state into jobs here in South Dakota. As we move forward with this
proposal we will protect qualified South Dakota workers. The program will focus on
high-demand jobs in industries without enough in-state professionals to fill them. In fact, no job
will be listed with the program until it's been in our state system for at least 30 days, giving our
state's citizens first shot at those jobs.
In the gallery we have some of the employers who are interested in expanding their businesses
and they're excited about participating in the New South Dakotans program. One of the
companies here is Raven Industries, whose difficulty in hiring engineers brought this challenge
into focus for me. Now, Raven is among the first companies to enroll in the New South
We also have representatives here from Molded Fiberglass in Aberdeen, Applied Engineering
in Yankton, and RPM in Rapid City, and those companies have also expressed an interest in
participating. They are here in the gallery to my right. Let's welcome them to the Capitol.
There are also representatives here from Manpower. Although they have thousands of offices
around the world, we will be working with their South Dakota-based team - people who know
and love our state and who have chosen to make South Dakota their home.
Now let's think about the impact of 1,000 new South Dakotans. The impact of 1,000 new
welders, and engineers, and machinists, and accountants on our state's economy will be
enormous. Those 1,000 families will add more than $120 million to our gross state product, put
hundreds of children into our schools, and pay millions of dollars in state taxes. Between 1930
and 1990 - I'll say that again, between 1930 and 1990, the population in our state changed up
and down and ended up 3,000 more than 1930 - 3,000 in 1990 more than in 1930. The Dakota
Roots program and the New South Dakotans program will give us the opportunity to replicate
that population growth, not over 60 years, but only in a few. Recent decades have seen South
Dakota grow, and I'm dedicated to continue that growth through smart investment and
Now, there are 20 different ideas in South Dakota WINS and all of them can be found online
at www.southdakotawins.com. To be successful we must join together with workers,
communities, schools, and businesses. And, I am committing to do just that. Although the plan
is ambitious, the investment required is relatively modest compared to what the impact will be.
With our efforts, we can begin to transform our workforce and with it our state. We can light
the spark that creates future scientists, and engineers, and we can train workers to fill jobs they
want and need. We can reinvest in our rural healthcare system. We can welcome back home the
young people who have left, and we can recruit professionals and skilled technicians who seek
a better land of opportunity. We can do those things, and we must do them if we want to move
our state forward.
Now that you've heard some of my suggestions for improving our workforce, I'd like to talk to
you about Investing in Teaching.
Of course, the best way to build a skilled workforce in South Dakota is to provide a quality
education to our young people. As I said in my state of the state address last year, "The
foundation of our economy is an educated workforce."
I am proud of South Dakota's schools - I'm proud of them. Our students' test scores - our ACT
scores and our NAEP scores, our National Assessment of Educational Progress - those scores
- they're routinely - routinely exceeding national averages - they always do. Our high school
graduation rate is strong. Much better than most places. And our high school graduates go on
to post-secondary education at one of the highest rates in the nation. We have much to be proud
about in South Dakota in our education system.
Our schools do well because we have involved parents. We have talented and hard-working
students, and very dedicated teachers and administrators. My wife, Linda, spent much of her
adult life working as a teacher and a school librarian, and in the past year she has visited over
90 elementary schools to promote reading. She has been impressed by the teachers and
principals she has met.
But we need to do more to reward our best teachers for the work they do, and to attract more of
our talented young people into the teaching profession. That is why, today, I am pleased to
announce the "South Dakota Investing in Teachers" initiative.
Let's begin though with some historical perspective. I graduated from high school 40 years ago,
1971. I asked my staff to take a look back and see what's happened in education since then.
In 1971, South Dakota had 173,006 students, 8,452 certified teachers, and another
5,436 "non-teachers" - other staff - everything from administrators and aides to cooks and
janitors in other staff.
Forty years later, there were 123,629 students in K-12. That is a decline of just under
50,000 students in forty years - a drop of about 28 percent. During that same period, while
student numbers were falling, we have added 869 new teachers. Today we have more than
9,300 teachers, an increase of about 10 percent. So we are employing over 800 more teachers
to educate 50,000 fewer students.
We have also seen a more dramatic shift in "other staff" over the past forty years. From the
5,436 in 1971, we have increased to 9,005. That is an increase of 3,569, or 66 percent. Today,
we have over 9,300 teachers and just over 9,000 other staff. We employ nearly as many
non-teachers as teachers.
Here's a look at that same data, over time, in a graphical form. The blue line is the number of
students from 1971 to 2011, with the scale on the left. The red line shows teachers, and the
green line shows other staff. The scale for the teachers and other staff is on the right. There is
a three-year gap in the data for other staff, that's why there is a missing spot in the line, but the
trends are very clear. During the 1970s, there was a dramatic decline in students, but very little
corresponding consistent change in staffing. Beginning in the 1990's, there has been a significant
increase in other staff. When you combine teaching and other staff, we employ nearly twice as
many employees per student today than when I graduated from high school in 1971.
Why did that happen? I know some of this increase in staff is due to the integration of special
education students into public school classrooms. But the federal law that created that
movement happened in 1975. Look at the teaching and other staff from 1975 forward, not much
happened until 1990. Other government mandates maybe have contributed. I don't know.
Looking at this data, I would guess that some of this increase is just due to the tendency of
institutions, including government sponsored school to grow larger over time.
Let's look at some other history. We need to understand these trends as we discuss education
in our state. Another way to measure our efforts in education is through looking at spending.
The National Center for Education Statistics, a part of the U.S. Department of Education,
compiles data on education spending per pupil, doesn't matter whether it comes from the federal
government, comes from local government, comes from state government, but let's look and see
what's being spent in inflation-adjusted dollars - inflation-adjusted dollars. Now, I don't have
this data for every year, but it is available on the Internet and here is what it shows.
In 1969, in inflation-adjusted dollars, we're using 2009 dollars; South Dakota spent $3,920 per
student. Now really we spent less than $1,000, but I am inflating it to 2009 dollars. That is
$3,920 in 2009 inflation-adjusted dollars. In the most recent year available, 2008, South Dakota
spent $9,173 per student, again in 2009 inflation-adjusted dollars. I will grant that 2008 is before
our budget required a freeze and a cut. But, take 10 percent off that and you are still spending
more than twice as much as you spent per student in 1969. In the 39-year-period from 1969 to
2008, in constant inflation-adjusted dollars, our per student spending on education more than
doubled. We spent 2.3 times more per student.
So that is the trend over the last four decades. We have 50,000 fewer students. We have added
more than 800 teachers, 3,500 other staff. We are employing nearly twice as many staff per
student, and we are spending well over twice per student in inflation-adjusted dollars than we
spent when we looked at the beginning.
Is that wrong? No. One can often do a job better, or faster, or more effectively when you apply
more resources. Any job can be done better or more effectively or faster if you apply more
resources to it whether it's human resources or money. And as I've said often in the past, we
should measure our success in education not by what we're putting into it. We should measure
it by what we are getting out of it - results. We all know that our schools perform well. But
given the statistics I just shared, we should expect to see significant improvement in
performance over time.
Is that the case?
Unfortunately, it is not. It is not. Our schools do well, and our test scores are good, but they have
flat lined. They have flat lined. Our ACT scores, our NAEP scores, and our graduation rates are
above the national average, but they have been relatively unchanged for decades.
I asked the Department of Education to compile our average ACT scores over the past four
decades. Here is what we found. The red line on this chart shows the average score from 1971
to 1985. After 1985, the test was revised so you can't compare the beginning of the chart on the
far left to the far right; you look at the trend in the red and the trend in the blue. But as you can
see, there is only variation from year to year, with no significant upward or downward trends.
In the 26 years since the test changed in 1986 - that would be those years represented by the blue
line - the average has stayed within one point, from a low of 21.0 to a high of 22.0.
We see a similar trend in the NAEP - the National Assessment of Educational Progress. We
don't have nearly as long a period to look at, but this is a test that our 4th graders and 8th graders
have taken in math and reading since 2003 to comply with No Child Left Behind. It is the same
test they take nationwide - the same test. The data doesn't go back forty years, but since 2003
we've seen very little movement in these scores either. The chart shows the scores in 8th grade
math in blue, 8th grade reading in red, 4th grade math in green, and 4th grade reading in purple.
On a 500-point scale, each of these scores has varied by 5 points or less over five testing cycles.
That is a variation of less than 1 percent - so less than 1 percent change.
Now what is more troubling than that, is even though our NAEP scores are steady and we are
doing well, we are better than the national average. We're being passed up by other states. In
2003, only 4 states exceeded our scores for 4th grade reading. Now, 20 states are better than us.
Only 8 states exceeded our 4th grade score in math in 2003 - now 18 states are better than South
Dakota. We have seen a similar pattern in the 8th grade scores too. Other states are passing us
I am showing you all of this not because I want to be critical of our schools or the jobs they're
doing. We have good schools. We are routinely above the national average in each of these
indicators. But remember - our staffing levels and our spending levels have gone up
significantly. A sizeable increase in our investment in education, over time, is not getting us
better achievement. We are simply putting more money into the same system, and we are not
getting better results.
We need to change our focus. The key to obtaining high achievement in the classroom is not
more spending. It is effective teachers. Let me say that again: The key to obtaining high
achievement for our students is great teachers.
I recently met with officials from the Bush Foundation, and they shared a study with me from
Tennessee. This study looked at a group of children entering the 3rd grade, and followed them
through the end of 5th grade - so all of 3rd, 4th, and 5th grades - three years. Both groups - they
took two groups - both groups began the 3rd grade at the 50th percentile. They were average -
both of them were right on the average. One group of students had high-performing teachers
each year - teachers in the top 20 per cent of their peer group. The other class had
low-performing teachers, from the bottom 20 percent, for three straight years. After these three
years, the students with the high-performing teachers were in the 90th percentile - up from the
50th percentile. The students with the low-performing teachers had dropped to the
37th percentile. There was a 53 point difference.
That is a dramatic result, but it just confirms common sense.
South Dakota needs to focus on Investing in Teachers. Our goal in South Dakota is to increase
student achievement, and our focus must be on attracting and retaining great teachers. We need
clear standards, rigorous measurement, and rewards for excellence.
Some of the pieces of Investing in Teachers are already being put into place - you've heard about
them. South Dakota is adopting the Common Core standards. These standards are not just a list
of what concepts to teach - they are a new approach to teaching based on problem-solving and
higher-order thinking skills - they're evidence based. In the budget address, I announced an
aggressive training program for our teachers to learn the Common Core standards and these new
A second important component is our new school accountability system. Earlier this year, our
state announced that we would no longer comply with No Child Left Behind, which is a broken
and flawed system. Instead we are seeking a waiver from No Child Left Behind which will
allow us to create a measurement and accountability system that makes sense for South Dakota.
When fully implemented, this system will not just test students at the end of the year and
measure them against an arbitrary bar. Instead, we will test students at the beginning of the year,
in the middle of the year, and again at the end of the year. In the middle of the year, our tests
will allow for mid-course corrections, so instructors can see where the children are lacking and
where they are already strong. At the end of the year, we will be able to measure the difference
between the beginning and the end and see what growth has occurred. Not whether the children
have moved up to some arbitrary bar. In one class, they might start down here and move a long
way but still below that arbitrary bar. In another class, they might start very close and move up
a little bit and this teacher is presumed to be excellent. Growth is what we should measure -
growth from beginning to the end and what the teacher has driven should be measured.
Another important component that is already being finalized is a better teacher evaluation
system. The system we are creating will consider growth in test scores as an important
component, but it will also include classroom evaluation, based upon observation of
evidence-based factors. In addition, it will give local schools flexibility to consider additional
factors. This is the groundwork for a strong system based on standards that define great
teaching. Another portion of the training program announced last month will train
administrators in these evaluation strategies. You need to have teachers doing their best work
against these standards and administrators capable of evaluating them accurately and fairly.
So - we are training teachers in new teaching methods, we are creating a new school
accountability system with better testing, and we are implementing a stronger teacher evaluation
system. These steps will be implemented over the next three years.
When they are completely in place, these pieces will allow us to reward our best teachers.
Beginning in the 2014-15 school year, we will ask schools to identify their very best teachers
- the top 20 percent in each district - based upon the new evaluation system. Under the Investing
in Teachers Initiative, the state will give every teacher in the top 20 percent a bonus of $5000.
Every teacher is eligible. The bonuses will not go into base salaries, but they can be earned
every year by a teacher who remains in the top 20 percent.
In addition, I mentioned earlier the importance of Math and Science education to our future
workforce needs. We have to recognize the importance of having excellent Math and Science
teachers - because they light the spark that ignites a generation of engineers, doctors, and
We need to attract our best teaching students into the fields of math and science, and we need
more teachers in these fields especially. Listen to some numbers - in the 2009-2010 school year,
our state universities graduated 176 new elementary school teachers - 176 new elementary
school teachers. They graduated 24 math teachers, 13 biology teachers, and 2 - that's right, 2 -
Not only do we not train enough new teachers, we also face greater outside competition from
the private sector for the math and science teachers we already have. For the same reason that
math and science are important skills for our students, teachers with training in those areas have
more opportunities to leave teaching for other careers.
I've heard stories - and most superintendents will confirm this - about school districts that get
dozens of applicants for an elementary school opening - dozens, but they are lucky to get even
one qualified applicant for a position as a math or science teacher in high school. This is a real
problem, and the free market can help us.
The way to retain our math and science teachers, and to attract more young people into these
fields, is to apply free market principles. We simply cannot expect students to enter these
challenging fields, and to remain in them, if they are not rewarded any differently than any other
teacher. Beginning in the 2013-14 year, I propose the state pay every middle school and high
school math or science teacher a bonus of $3500. Not into their base salary, but a teacher who
stays in these fields will qualify for the $3500 bonus every year.
So I am proposing two bonus programs: a $5000 bonus for the top 20 percent of teachers, and
a $3500 bonus for math and science teachers. And a teacher can qualify for both bonuses. That
means if a math or science teacher is in the top 20 percent of the teachers in his or her district,
they would receive a bonus of $8,500 on top of their base salary. For a teacher earning a salary
of about $35,000, that is a bonus of about 25 percent.
Funding these bonuses is a sizable obligation, and I want to emphasize my strong commitment
to fully funding these incentive payments every year - not just one-time - but every year. These
bonuses will be paid entirely with state dollars, and they will be in addition to the annual
formula funding increases.
This is a three-year plan. This year, I have already proposed $8 million in one-time funds for
aggressive training on the Common Core standards and on teacher and administrator training.
Next year, I will propose adding $5 million in ongoing funds, on top of the formula, to fund the
bonuses for math and science teachers. And the year after that, I will propose another
$10 million in ongoing funds, on top of the formula, and on top of the $5 million, to fund the
incentive bonuses for our best teachers.
This is by far the largest investment in the teaching profession in the history of our state.
I am proposing one more change as part of this package. It has to do with teacher tenure.
Investing in Teachers makes a significant investment to reward our best teachers and to attract
more talented young people into teaching. But even as we reward our best teachers, we need to
give administrators fair and objective tools to measure performance, to deal with the few
teachers who just aren't able to perform in their jobs.
Teachers who currently have tenure will not lose it under my proposal. Let me repeat that: No
teacher who currently has tenure will lose it under my proposal. But I am proposing that South
Dakota end the availability of tenure, effective July 1 of this year, for anyone who doesn't have
it by that date. We are moving away from a system that relies on tenure, and into a system that
is based on rigorous, evidence-based evaluation. New teachers can be confident that
administrators are conducting professional evaluations and basing decisions on facts and proven
methods. Administrators will have a strong foundation to make informed decisions about their
teaching force, and they'll have the flexibility to carry out those informed decisions.
In every field - in every field, people want to strive for something better. They want to achieve
more through hard work. Many of our teachers go the extra mile, but most of them are still paid
based on how long they have worked there or whether they have a master's degree or not. A
$5000 bonus is a way to demonstrate to our top teachers that we want to compensate for results,
not seniority - results - and we appreciate the work they do, and we reward them for their service
to our young people. By investing in great teachers, we are investing in our young people and
in South Dakota.
That is my vision for education in South Dakota. We are not afraid to invest in our young
people, but we cannot fall into the trap of believing that more money automatically creates better
results. We've seen it does not. We cannot simply pour more money into the same old system.
Rather, we must focus on improving results, and spend creatively and strategically to achieve
results. The key to high achievement is great teaching and we will invest the dollars that it will
take to make a difference.
This is the state of our state. We have great opportunities this year to move our state forward.
Now that we are on a sound financial footing, we can build a stronger South Dakota. We can
budget carefully and protect against uncertainty. We can strengthen our state's workforce
through a package of proposals to train South Dakotans and attract more people to South
Dakota. And we can strengthen our education system by rewarding great teaching, with a special
emphasis on Math and Science.
These are not small proposals, and they will require hard work from all of us. But it is only
because of your courage and hard work last year that we are in a position to consider proposals
like this for this year and two years more. I am confident we will be successful, because of what
we all saw in South Dakota this spring. I'd like to close today by talking about what we saw in
South Dakota last spring.
We are used to natural disasters in South Dakota. We have tornadoes, blizzards, wildfires,
drought - we have had our share of flooding in past years. And in some parts of our state,
flooding happens too often.
But the flooding we experienced along the Missouri River this spring was different. It was very
different. We've never been given two weeks' notice that a disaster was coming. It was a
Wednesday night in late May when the Corps of Engineers called to alert us that their releases
would be much higher than planned. And South Dakota sprang into action.
In Dakota Dunes, in Yankton, in Pierre and Fort Pierre, and up and down the river, South
Dakotans stepped up. Homeowners packed up and moved their possessions and built massive
sandbag walls. Contractors worked with feverish activity to build emergency levees -
compressing months of work into days. Truck drivers and heavy construction crews came from
hundreds of miles and worked around the clock to hasten the construction. Law enforcement
controlled traffic at every intersection, to speed the work. Prison inmates, homeowners, and
neighbors filled sandbags - thousands - no, millions of sandbags. National Guard troops aided
with preparations and patrolled the levees all summer, all day and all night. State employees
manned the emergency operations center for nearly a month.
And thousands and thousands of volunteers poured into the affected communities to help. They
came from every corner. I met a group of Boy Scouts who dropped their plans for a Black Hills
camping trip to help. I saw college basketball teams, football teams, and volleyball teams, by
the busload coming to help - groups of Hutterites. I saw boxes and supplies from all across
South Dakota sent to help those affected. I saw friends and neighbors do backbreaking work
hauling sandbags, for hours and hours, to secure private homes.
I have never been prouder of South Dakota than I was during those weeks. It was a time that
exemplified our values of persistence, hard work, determination, and perseverance. No one
thought about politics or the next election. No one got distracted by petty squabbling. No one
took a poll or kept a scorecard. South Dakotans were faced with a challenge, and we all rolled
up our sleeves and we overcame it - together - we overcame it.
As high as the flood waters rose, South Dakota rose even higher. I call on all of us now to
continue in that same spirit as we move forward this legislative session. If we do, there is no
limit to how high South Dakota can climb.