PIERRE A new method for determining the rates local governments pay for public notices published in newspapers won the approval of the Senate Local Government Committee on Friday morning.
SB152 would remove the rate setting responsibility from the Bureau of Human Resources and Administration and automatically set the annual increase at 2% or the rate of inflation, whichever is less.
Anita Fuoss, an attorney with the Bureau of Human Resources and Administration, spoke in favor of the bill. She explained that current law requires the bureau to make an annual review of the economic conditions within the newspaper industry and adjust publication rates to reflect any economic changes.
Economic analysis of the newspaper interests is, frankly, not the bureaus area of expertise, Fuoss said, adding that the administrative rules process is cumbersome and time consuming. It delays the application of appropriate adjustments and the delay and lack of predictability is a disservice to both the newspapers and local governments.
Also speaking in favor of the bill was David Bordewyk, executive director of the South Dakota NewsMedia Association, formerly the South Dakota Newspaper Association. Bordewyk recalled that, prior to 1989, publication rates for public notices were set by the Legislature. He said that lawmakers eyes would gloss over as the debate turned to column widths, the space between lines of type, picas and points.
The switch to the BHRA has had its own problems, according to Bordewyk. Sometimes the rates were reviewed annually, sometimes they were not, for a variety of reasons. To say the least, it was a process filled with fits and starts and some misfires.
Bordewyk noted that if the bill becomes law, the rates in effect now, which were set in 2021, would stay in place until 2025.
Over the years, the publication rates have not kept pace with inflation and expenses specific to the newspaper industry, Bordewyk said, noting an almost 40% increase in postal rates in the past three years.
Public notice rates, on average, are less than half the rates charged for retail advertising, Bordewyk said, adding that the average cost to local governments for publishing public notices like the minutes of meetings and bid notices accounts for half of 1% of a local governments annual budget.
This bill would allow local governments to know well in advance the possible increase in public notice costs, Bordewyk said.
Justin Smith, a lobbyist for SDNA, said that when the private sector does business with government, they are free to negotiate and bid according to the prevailing marketplace and government decides who to hire and what to pay.
Smith said that in the case of public notices, newspapers are statutorily mandated to provide services to local governments in the form of publishing public notices.
Unlike other businesses, newspaper are paid for those services according to prices set today by regulation, Smith said, noting that those prices are far below what private businesses pay to advertise. Yet newspapers do continue to perform and fulfill the important role of arbiter of government transparency, accepting low rates because the public trust is a sacred one.
No one spoke in opposition to the bill.
Sen. Steve Kolbeck, R-Brandon, calling himself a reformed regulator, said regulatory certainty is the best way to do business. I think this bill is a good way to do that. I think its going to bring budgeting certainty for counties.
Newspapers were allowed seven public notice rate increases since 2000. Sen. Tom Pischke, R-Dell Rapids, said there should have been more increases but reminded committee members that those rates are paid for by property taxes.
We just had a very rigorous debate on property taxes, Pischke said, referring to a bill that was defeated in the Legislature. This is going to add to that. Its a very, very small amount, Ill give you that. Every little bit counts.
SB152 was endorsed unanimously by the committee and placed on the Senates consent calendar. Consent calendar bills are typically endorsed as a group and not subject to floor debate.
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