Legislative Update with Chesney

​Our advocacy team has been working with Senator Rounds and America’s Credit Unions on an affordable student loan option. Plus, opposing IM-28 in South Dakota. 

by Chesney Garnos, Director of Political & Grassroots Affairs

July was a busy month for our advocacy efforts! Not only was it busy at the state level in both Dakotas, but we have been busy at the national level as well. I had the opportunity to work closely with Senator Rounds’ office on a new piece of legislation giving students affordable loan options for college and trade schools. Additionally, our league joined efforts with other trade associations from across South Dakota on opposing Initiative Measure 28 which will be on the ballot this November. Dive into the details below.

Affordable Future Loan Program
Over the past month, our advocacy team has had the opportunity to work with U.S. Senator Mike Rounds’ office on a bill that was dropped last week. This bill, the Affordable Future Loan Program (AFLP) Act gives credit unions a valuable new tool to offer their members, providing students with access to affordable loan options for higher education! The AFLP Act would guarantee loans of up to $19,000 a year for four years through eligible lenders. With the program, no interest would accrue for the student while they are enrolled in school full-time. Additionally, the loan is 98% guaranteed by the federal government when a student attends an accredited institution.

So, how exactly does our advocacy team at DakCU work with our federal delegation in the Dakotas? There are a variety of ways, but highlighted below are some of the key touchpoints:

• Review/Drafting Legislation
• Provide Issue Briefings
• Meetings and Testimonies
• Grassroots Mobilization
• Media and Public Relations
• Networking
• Monitoring Legislation/Impact

For this bill, we had the opportunity to review and provide feedback on the drafted legislation. Additionally, we worked with our national trade association, America’s Credit Unions, to ensure this was a bill that benefited students and credit unions across the country. Through the collaboration with America’s Credit Unions, our teams drafted a letter of support, which you can read here. For more details, you can also review the press release from Senator Rounds’ office, which includes the full text of the bill and a one-pager outlining its key provisions.

Also, in case you missed it, check out the Dakota News Now story featuring Bluestone CEO, Jeff Jorgenson, on the topic.

Joining forces with Trade Associations in South Dakota: Opposing IM-28
Our association joined alongside 25 other local organizations in opposing IM-28. IM-28 proposes to eliminate South Dakota's ability to collect taxes on all items sold for human consumption, except alcohol and prepared food. The term "human consumption" is not clearly defined by state law but generally encompasses a wide range of products beyond food and drinks, including items like tobacco products, vaping supplies, CBD, mouthwash, toothpaste, aspirin, beverages, and more. Due to the poor drafting, here are some of the key issues:

1. IM-28 eliminates sales taxes on MANY items other than food, cutting at least $176 million in annual funds to the state.
2. IM-28 will kill cities and towns, preventing them from collecting sales taxes on the same items, cutting $50 million from local budgets.
3. IM-28 is a trap, deliberately setting us up for a state income tax.
4. IM-28 will reduce funding for Tribal governments via sales tax compacts with the state.
5. IM-28 is poorly written and creates major problems.

If this measure passed, it would eliminate more than $176 million in state revenues. And with 80% of state expenditures going to education and health & human services, this budget shortfall would require cuts for schools and healthcare providers. This means our state's children, patients and seniors would be most negatively affected by the passage of IM-28, unless those revenues were replaced with a new state income tax.

If we need to replace the $176 million in lost state revenue, where will those funds come from? One concern is it could be replaced with a new state income tax. Additionally, since my primary responsibility is to advocate for credit union members and our credit unions, I am concerned that this could also lead to impeding on our credit unions special tax status.

Feel free to reach out to me with any questions.