No New Taxes Needed: Moving Forward with Reverse

Our economy is a mess, our national debt is over $15 Trillion, and a global Bankenstein is terrorizing markets. Our leaders are feckless in their response and Main Street is hurting as a result. Most of us have re-adjusted our budgets and lifestyles to just hunker down – why should state and local government be exempt?

I’m SO sick and tired of budget boohoo, service cuts, and the resulting public outcry. It’s all predictable… and a manipulation. The “solution” always offered-up and lobbied for by the teachers union, public employees, and other entities funded by government is to increase taxes.


When times are tough, you have to get creative and do something other than that which you’ve always done. Sadly, when most bureaucrats and politicians have less money to spend, they clamor for higher taxes and fees.


I have both publicly and privately advocated putting all of South Dakota’s spending (State, County, Municipal, Board of Regents, Boards of Education) on a web-based, fully-transparent, reverse-auction purchasing system.


I’ve sent thoughtful, polite, detailed emails, along with vendor recommendations, to several senior state and municipal officials. Curiosity alone would warrant investigation into this budget-saving technology, yet there was neither a response nor follow-up. Why is that?


When I co-chaired 2008’s YES on 10 statewide ballot initiative for “open and clean government”, I got an advanced lesson in no-bid contracts, “preferred vendor” arrangements, and what can only best be described as the crony capitalism that pervades much public spending in South Dakota. The Powers that Be must feel the existing political patronage system works fine, why rock the boat?


Is any of it illegal? No, probably not with our laws and codes as currently written. However, can we continue to afford such cozy contractor, vendor, and supply arrangements given our existing fiscal and budgetary woes?


While politically useful for generating donations, favors, and maintaining the power structure, no-bid contracts, and all hard-to-see government purchases (try getting copies released), almost always carry higher margins and inflated prices for the taxpayers. Further, they frequently contain more vaguely worded performance requirements than they would if they were more easily viewed and bid upon openly by the public.


South Dakota can no longer afford its old-fashioned and non-transparent contracting and purchasing methods that have served our political machine so well.


Governor Daugaard promised to make government more open and accountable; he’s already taken some laudable first steps.


I challenge our leaders in Pierre to enact a law that requires all departments and agencies (state, county, or local) to make their non-emergency spending transparent on a public website and to use an online reverse auction system to ensure the prices paid are truly market-based… and don’t carry a political patronage or insider “mark-up”.


Open, web-based, reverse auction purchasing systems are highly-affordable, robust, and easy-to-deploy. They result in both government efficiency gains and significant savings (up to 10 % or more) according to a just-released study.


As Founder Ben Franklin once said, “If you know how to spend less than you get, you have the Philosopher’s Stone.”


The technology for statewide cost-cutting and transparency is here and proven. Why wouldn’t we exhaust all possible savings methods before raising taxes?


Sam Kephart is CEO of Virtual Acumen Corp., a Spearfish, South Dakota-based creative agency specializing in digital media and marketing. He can be reached at


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