Why South Dakota? Advantages and Growth

Site Selection

Consultant Presentation

August 2014

Why SD?

• Business & Tax Climate

– Lower cost of doing business

– Tax climate

• No Corporate Income Tax

• No Personal Income Tax

• No Personal Property Tax

• No Business Inventory Tax

• No Inheritance Tax

– Businesses are successful and growing

86.4 87.6

88.1 88.1 88.2 88.6 88.8 89.2 89.5 89.9 89.9 90.1 90.4 90.7 90.7 91.1 91.4 91.6 92.0

92.9 93.6

94.2 94.4 94.8

96.4 96.5 96.8

97.5 98.1 98.2 98.3 98.7 98.7 98.8 98.8

100.6 100.9

101.6 102.3

103.2 103.2

106.2 107.1 107.2

109.4 111.3

112.9

114.1 115.4

117.2 118.2

85.0 90.0 95.0 100.0 105.0 110.0 115.0 120.0

MississippiArkansasAlabamaMissouri

South DakotaWest Virginia

KentuckyOhioIowa

KansasOklahomaNebraska

North DakotaSouth Carolina

TennesseeIndiana

LouisianaNorth Carolina

GeorgiaWisconsin

IdahoMontanaMichigan

New MexicoWyoming

TexasUtah

MinnesotaArizonaNevada

MainePennsylvaniaRhode Island

FloridaOregonIllinois

VermontColoradoDelaware

VirginiaWashington

New HampshireAlaska

MassachusettsConnecticut

MarylandCalifornia

New JerseyNew York

HawaiiDistrict of Columbia

South Dakota

has one of the

lowest operating

costs in the

nation, 88% of

the national

average

U.S. Average = 100.0

Source: Bureau of Economic Analysis

Cost of

Living

2012 Regional

Price Parities

1.46%

16.99%

23.07%

32.31% 35.87%

39.33%

53.10%

62.22% 59.23%

67.18%

87.36% 90.70%

105.29%

0%

20%

40%

60%

80%

100%

120%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Private Sector Growth Cumulative Growth of Gross Domestic Product (GDP) by State

South Dakota – 105.29%

United States – 63.08% Minnesota –62.70%

Nebraska – 93.30%

Source: U.S. Bureau of

Economic Analysis (BEA)

Iowa – 75.41%

1.46%

16.99%

23.07%

32.31% 35.87%

39.33%

53.10%

62.22% 59.23%

67.18%

84.36%

90.70%

105.29%

0%

20%

40%

60%

80%

100%

120%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Private Sector Growth Cumulative Growth of Gross Domestic Product (GDP) by State


United States – 63.08%

Illinois – 45.00%

California – 58.53%

Source: Bureau of Economic

Analysis (BEA)

Texas – 108.54%

• Fiscal Stability

– Keep Government Spending in Check

– Structurally Balanced Budget

– No General Obligation Debt

– State Pension is 100% funded

Why SD?

Source: US Census & BEA

State & Local Gov. Spending As a Percentage of Gross Domestic Product (GDP) by State

16.81%

15.71% 15.58%

15.15%

15.73% 16.04%

15.70% 15.60%

17.38% 17.55%

16.52%

14.00%

15.00%

16.00%

17.00%

18.00%

19.00%

20.00%

21.00%

22.00%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011



Minnesota – 19.49%

Iowa– 20.35% Nebraska – 19.88%

Source: US Census & BEA

State & Local Gov. Spending As a Percentage of Gross Domestic Product (GDP) by State

16.81%

15.71% 15.58%

15.15%

15.73% 16.04%

15.70% 15.60%

17.38% 17.55%

16.52%

14.00%

15.00%

16.00%

17.00%

18.00%

19.00%

20.00%

21.00%

22.00%

23.00%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011



California – 22.54%

Illinois – 19.32%

Texas – 16.28%

General Obligation Debt

• Insert General Obligation Debt Map

Source: Moody’s Investor Services

Why SD?

• Reasonable Regulation

– No Red Tape

– Quick & Efficient Processing

“In today’s political environment of being over taxed and over-regulated, it is a pleasure to operate a business in South Dakota where the state government does everything it can to help you be successful.”

Adams-ISC

Why SD?

• Growing & Productive Workforce

– In-Migration State

– High Return on Payroll

– Low Rate of Unionization

– Quality Workforce

In-Migration State

Source: Tax Foundation,

2000-2010

South Dakota

In-Migration States

Out-Migration States

Top Five States with

Populations Migrating

to South Dakota • California

• Iowa

• Michigan

• Minnesota

• Nebraska

2013 Wage Comparison

Median Wage

Take Home Pay

Purchasing Power

California $56,507 $41,329 $36,607

Illinois $50,333 $37,288 $37,066

Iowa $46,059 $34,596 $38,654

Minnesota $51,471 $37,926 $38,898

Nebraska $45,248 $34,247 $38,010

South Dakota $43,244 $34,615 $39,246

Texas $48,609 $38,405 $39,798

All Occupations

Source: GOED Wage Study

Median Wage: Average Median Wage For All Occupations (U.S. Bureau of Labor Statistics) Take Home Pay: Median Wage minus Federal & State Income Taxes and Social Security Purchasing Power: Take Home Pay adjusted for Cost of Living (BEA Regional Price Parities)

$0.98

$1.00

$1.03

$1.00

$0.95

$0.99

$1.02 $1.01

$1.03

$1.12

$1.09

$0.55

$0.65

$0.75

$0.85

$0.95

$1.05

$1.15

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

South Dakota – $1.09

United States – $0.75

Nebraska – $0.92

Minnesota – $0.68

Iowa – $0.88


Analysis (BEA)

Return on Payroll Business Profits* Divided by Total Employee Compensation

*Before Income Taxes & Depreciation

$0.98

$1.00

$1.03

$1.00

$0.95

$0.99

$1.02 $1.01

$1.03

$1.12

$1.09

$0.55

$0.65

$0.75

$0.85

$0.95

$1.05

$1.15

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

South Dakota – $1.09

United States – $0.75

California – $0.78

Illinois – $0.67

Texas – $0.99


Analysis (BEA)

Return on Payroll Business Profits* Divided by Total Employee Compensation

*Before Income Taxes & Depreciation

Unionization 2013 Union Membership

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

UnitedStates

California Illinois Iowa Minnesota Nebraska SouthDakota

Texas

11.3%

16.4% 15.8%

10.1%

14.3%

7.3%

4.8% 4.8%

Source: U.S. Dept of Labor,

Bureau of Labor Statistics

Quality Workforce

Credit Score Volunteerism High School Graduates*

U.S. 681 26.5% 86.4%

California 676 (30th) 25.1% (35th) 81.5% (49th)

Illinois 687 (19th) 27.4% (27th) 87.6% (30th)

Iowa 700 (8th) 36.0% (5th) 91.6% (8th)

Minnesota 713 (1st) 37.7% (2nd) 92.5% (2nd)

Nebraska 698 (9th) 36.0% (5th) 90.5% (13th)

South Dakota 713 (1st) 35.7% (7th) 90.5% (13th)

Texas 665 (39th) 24.0% (42nd) 81.4% (50th)

*Percent of Population, 25 Years and Older, that has graduated high school.

Sources: Experian, Volunteering

America, US Census Bureau

South Dakota’s Reputation

• Enterprising States – Business Climate: #1 2014 U.S. Chamber of Commerce Foundation

• Business Friendliness: # 2 2014 CNBC

• State Business Tax Climate Index: # 2 2014 Tax Foundation

• State Fiscal Condition Index: #2 2014 Mercatus Center, George Mason University

• State Economic Competitiveness Index: #2 2014 American Legislative Exchange Council

• Enterprising States – Talent Pipeline: #7 2014 U.S. Chamber of Commerce Foundation

Targeted Industries

• Advanced Manufacturing

• Bioscience

• Financial Services

• Oil & Gas

• Professional Business Services

• Shooting, Hunting & Outdoors

• Value Added Agriculture

State Incentives

• Low-Interest Loans

• Workforce Training Grants

• Internship Grants

• New – State Sales Tax Refunds (Building

South Dakota Fund)

Why South Dakota? Advantages and Growth

Government & Nonprofit

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