Sometimes through time we lose recognition of turning points in South Dakota’s history. One of those turning points came in the decade of the 1990s and ultimately in the 2000 election. The Legislature repeatedly opened the door to an amendment of the South Dakota Constitution regarding investment of the permanent school fund. Until voters finally passed the amendment in November 2000, the fund’s proceeds could be invested in only safer financial instruments such as bonds of the U.S. government or securities backed by the federal government, or bonds issued by South Dakota school districts, cities and counties. Legislators and several state lands commissioners, who oversee the distribution of the permanent fund’s earnings to education, wanted to allow much more flexibility in how the state Investment Council managed the school fund, so that stocks could be used too.
Sen. Bill Johnson, R-Buffalo, worked throughout his 10 years as a legislator for more flexibility and potentially higher earnings for the permanent school fund. His legislative district, covering the northwestern corner of South Dakota, probably had more state-owned school and public lands than any other. That naturally led to a high interest in the operation of the state school and public lands commissioner’s office, For six years he was part of a campaign to allow more freedom for investment of the permanent school fund. In its eighth year, the effort finally succeeded.
Voters rejected a 1994 constitutional amendment offered by the Legislature that would have allowed up to 50 percent of the fund to be invested in stocks. At that time, the state lands commissioner still was responsible for the investment of the fund. The 1994 proposal called for the Legislature to make up any losses. In 1996, voters approved a constitutional amendment that put the permanent school fund under the Investment Council. In 1998, the Legislature again offered a constitutional amendment again allowing for more flexible and higher-risk investment, but this time without the provision that the Legislature automatically cover any market losses. The voters rejected the 1998 proposal as well. It failed miserably with 96,975 yes and 150,907 no.
That was Bill Johnson’s final year as a legislator. But the issue wasn’t done. In 2000, a bipartisan mix of legislators led by Sen. Arlene Ham, R-Rapid City, and Rep. Larry Lucas, D-Mission, brought the resolution for a constitutional amendment again and saw it placed on the ballot. It called again for the Legislature to make up any loss caused by an unconstitutional act such as embezzlement but was silent on market losses. It allowed for investment in stocks, bonds, mutual funds and other financial instruments as provided by law. This time, the voters approved the change, with 168,896 yes and 132,181 no.
Bill Johnson died Nov. 21 of this year at age 86. His funeral was Monday. He had served from 1989 through 1998. Flags flew at half-staff in his honor at state government buildings Monday.