$350k for fireworks show paid for out of SD Future Fund

Investigates

SIOUX FALLS, S.D. (KELO) — As the fireworks show for Mt. Rushmore took shape, there are early reports that state officials hoped for private business sponsorship to fund it. But that didn’t happen.

Instead, Governor Kristi Noem authorized state funding from the Future Fund. The fireworks show, serving as a backdrop for President Trump’s visit, is ultimately paid by businesses in the state.

“We have been working for well over a year to put this fireworks celebration together,” South Dakota Tourism Secretary Jim Hagen said on June 4.

On June 4, Hagen and Noem announced the lottery system for tickets to the July 3 show. During the news conference, they were asked about the cost.

“We are still compiling the cost estimates and we’ll be able to share those in the coming days,” Gov. Noem said on June 4, 2020.

However, it was on that very same day, June 4, that Hagen signed the contract with James Souza, the CEO of Pyro Spectacular. The state agreed to pay the California company no more than $350,000 for the show, which will last 15 to 30 minutes.

According to Open Checkbook for the State of South Dakota, $175,000 of that contract has been paid out.

Where is the state getting the money?

It’s coming out of the South Dakota Future Fund, which was developed after the 1980s recession. The money for the fund comes from a fee paid by businesses, which pay unemployment taxes.
According to government’s website:

The Future Fund supports the workforce development and technical assistance programs which help train employees, retrain employees during layoffs and support business recruitment, economic development initiatives, and research and entrepreneurial activities.

KELOLAND Investigates asked Governor Noem for an interview to find out how Future Fund monies can be redirected to pay for fireworks. Our request was turned down.

However, Noem’s office told us according to law, the fund can be used for economic development and the fireworks show is a way to market the state.

Governor Noem’s Senior advisor and Policy Director Maggie Seidel sent KELOLAND News the following statement:

Our conservative estimate for just the 7500 attendees of the event is $2 million worth of investment in our state. The hills are flooded with people. And given all that covid has done to hurt this community, this is a huge step forward toward returning to normal.

Maggie Seidel, Senior Advisor and Policy Director to Gov. Kristi Noem

At the beginning of June, the state’s tourism tax revenue fund was down 70 percent over the same time last year.

Below are links to the last 10 years of records online of how the money in South Dakota’s Future Fund has been distributed:

20202019201820172016
20152014201320122011

The funds spending for June of 2020, which should include the Pyro Spectacular contract, is not available on the state’s website yet.


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