By Dana Hess
For the S.D. Newspaper Association
PIERRE — Despite opposition from cities, counties and school districts, the House Local Government Committee Thursday endorsed a bill that would modernize the way public notices are handled in the state’s newspapers.
House Bill 1050 would create a statewide public notice website run by the S.D. Newspaper Association, increase the price for legal notices as well as tie future increases to the Consumer Price Index, scrap the 90% rate in weekly newspapers for the publication of local government proceedings and make specifications about column width and font size.
Rep. Tim Reed, R-Brookings, the bill’s sponsor, said he served in city government for 13 years. “It is only fair that they are paid a fair price for the service they provide,” Reed said of newspapers.
David Bordewyk, executive director of the S.D. Newspaper Association, said that newspapers should be compensated fairly for their services. HB1050 would provide newspapers with a 3% to 5% increase in rates this year, Bordewyk said any future annual increases would be tied to the Consumer Price Index at no more than 2% per year.
Currently rate increases are handled by hearings before the Bureau of Administration. Using that system, the last rate increase was about 1.8% in 2016.
Bordewyk offered the committee examples of legal notices from South Dakota newspapers, the cost charged and the price that would be charged should HB1050 become law. In some cases, due to column width and font size requirements, the prices went down.
Justin Smith, a lobbyist for the S.D. Newspaper Association, said the private/public partnership between newspapers and local governments was likely the oldest in state history. Perhaps due to that long history, Smith said, the current pricing system for public notices is 100 years old.
Smith said the bill mandated that notices be published at a newspaper association-run website, sdpublicnotices.com, and noted that opponents of the bill have been pushing for years for the internet-only publication of notices. He said the third-party role of newspapers publishing notices in print and online was important.
That third-party role is also fulfilled by the audit of local governments. He asked if those should be eliminated. “Those governments could easily audit themselves,” Smith said. “Transparency and accountability require third party oversight.”
Smith noted that publishing public notices is not a significant cost to local governments, often taking just .01% of .02% of the entire budget.
Matt Tranquill, publisher of the Rapid City Journal, said newspapers fulfill an important watchdog role.
“We cannot allow local governments to watch over themselves,” Tranquill said. “Having a third party for digital and print legals is a must.”
Speaking in opposition to the bill was Yvonne Taylor, lobbyist for the S.D. Municipal League who thanked Bordewyk and Smith for making the Municipal League’s point about the need to place public notices online. She noted, however, that a newspaper site has no standing when it comes to being the official repository of public notices.
“A newspaper site is not the official version of anything,” Taylor said. “This bill is the worst of all worlds. It binds us to an outdated mechanism.”
Dianna Miller, a lobbyist for large school districts, said passage of the bill would be too costly for school districts.
“We are here to save you money,” Miller said. “Their bill doesn’t save us any money.”
Miller said in the past school districts have offered alternatives to newspaper publication that included posting notices on the internet, mailing minutes to citizens who don’t have internet access and providing copies at libraries and school offices.
Miller objected to the notion that public notice costs were an insignificant part of school budgets.
“Every dollar at a school district is crucial,” Miller said, noting that the bill’s passage would raise public notice costs for schools by 20% to 30%. “We’ll be paying them to keep them afloat.”
Miller said newspapers should take a cue from radio and publish the notices as public service announcements.
Wade Pogany, representing the Associated School Boards of South Dakota, said the legislation hits schools twice, once by increasing the rates and again by repealing the provision that allows schools to pay at 90% of the rate.
“We think this could be pretty significant,” Pogany said. “This hits us twice financially.”
Pogany also questioned why the rate increase procedure would be taken away from the Bureau of Administration.
“Why are we changing the process?” Pogany asked. “Why would private industry have a right to an automatic rate increase?”
Reed defended the change in rates for school districts, pointing out that they probably don’t get a 10% discount when they buy new snow plows.
“We have to do this at a fair price,” Reed said. “That’s good government.”
The bill was approved by the committee on an 8-5 vote. It now goes to the full House.
