PIERRE, S.D. (KELO) — The South Dakota Pharmacists Association is searching for new sources of revenue, after Governor Kristi Noem decided the group should no longer receive state funds from the South Dakota Board of Pharmacy.
A long-standing state law says the state board “may, upon receipt, pay to the South Dakota Pharmacists Association eighty percent of all fees the board receives for renewals of certificates of registration as a pharmacist.”
The not-for-profit association had received $203,500 through that route in 2022 and $204,900 in 2023, according to a spokesperson for the state Department of Health. For 2024, however, the amount will be zero, after the state board’s five members voted unanimously at their meeting last month to stop the funding.
The governor appoints the four professionals and one lay person who comprise the board. State law says the governor “may remove any member of the board for just cause.” The vote on September 12 came on the eve of the association’s annual convention September 13-14 in Brookings.
Tia Kafka is marketing and outreach director in the state Department of Health’s Division of Healthcare Access. She explained the Noem administration’s position on the matter.
“Pharmacists are required to be licensed by the Board of Pharmacy to practice in South Dakota. The Board’s role is to regulate the profession. However, it is not the Board’s role to collect funds to remit to an advocacy organization. To support this, we cannot find any other instance where an executive branch licensing board transfers funds to a professional association in this manner,” Kafka said.
The pharmacists association however is officially recognized in state law, which says those “who have secured a current annual certificate of registration to practice pharmacy in this state” may be members of the association.
The state law allowing the board to provide 80% of renewal fees to the association spells out that the association shall use the funds “to benefit the public and the profession: continuing education, matters related to registration standards for pharmacists, professional service standards, and general operating expenses related to the activities enumerated in this section. The association shall also use funds received to pay any legislated assessment to support a diversion program for chemically impaired pharmacists.”
Amanda Bacon, the association’s executive director, declined repeated requests from KELOLAND News to comment about the situation. She also declined to provide the amounts that the association had received from the board during the past three years. However, in the association’s quarterly Journal, Bacon has written extensively about the association’s dependence on the state funding.
In the summer 2024 Journal, Bacon differentiated between the state funding and the association’s lobbying efforts, which she said are funded from other sources. She wrote, “These funds are not to be used for lobbying, which is why we maintain a separate Commercial and Legislative Fund. That fund sustains the lobbying arm of SDPhA. The reality is, to ensure the profession has a seat at the table, first and foremost, the Association needs the funds in the general fund to even exist. (While we have some reserves, like you, SDPhA can’t operate without its main source of income for very long.)”
The state board had sought a $25 increase in registration fees earlier this year, but the association opposed it. The Legislature’s Rules Review Committee in May refused to allow the increase. (See related story.) Bacon in the summer 2024 edition of the Journal explained the association’s decision regarding the fee increase.
“We did express our continued concern with the increase being proposed in 20:51:14:01– the increase in the annual certification renewal fee for pharmacists from $125 to $150,” Bacon stated. “We asked this rule to be reverted to a prior step, as we continued to have concerns
with increasing this fee given the recent denial of funding for services provided by SDPHA. While we recognize the financial position the Board finds itself in, we are concerned over any effort to shift the burden to fund this shortfall to pharmacists through both elimination of their funding and an increase to their fees.”
The state board’s draft minutes from the September 12 meeting explained the reason for the unanimous vote to stop sending funds to the association. Those minutes read, “The Governor’s office has made its position clear on the issue – fee increase will not be available to the board if the board continues to fund the Association. The board currently does not have enough funds to give 80% to the Association. Motion to not fund the Association this year was ratified.”
The association meanwhile is feeling a strain, too. Wrote Bacon in the recent Journal, “SDPhA always operates somewhat in the rears given that our fiscal year runs July 1- June 30, and we wait to send the invoice for the fees for the above referenced June vote until after the October license renewal window closes. That means by the time the SD BOP voted to rescind
the June vote in 2023, we were effectively 6 months into our FY, operating as normal. As of this report, we have operated completely on reserves for one full fiscal year and are moving into our second fiscal year of the same. We’ve worked diligently to cut costs where we can while
dealing with the reality that there wasn’t much to cut in the first place.”
None of this came out of the blue, however. The association’s past and current presidents, Jessica Strobl of Dell Rapids and Andy Tonneson of Colman, have been dealing with the possible cut-off of state funds during the past year.
According to official minutes from the state board’s June 2023 meeting, state board members had voted to fund the association again in 2024 and had also agreed to move forward with a request to raise fees during the 2024 legislative association.
But draft minutes from the state board’s December 2023 meeting show that board members changed their minds after discussions between board representatives and the governor’s office. That day, board members voted to rescind — that is, take back — their June decision to send the 80% of license renewal fees to the association. There followed a long discussion about the situation, according to the meeting minutes.
Those December 2023 minutes report that Kari Shanard-Koenders, who at the time was still the board’s long-time executive director, “shared that the Board has worked closely with the association and has high regard for the work being done by SDPHA. It is a perfectly bad storm due to lack of funding, being told to spend down, and no fee increases in over 20 years for most license types. The Governor’s Office will not allow the fee increase bill to go to legislative session.”
The December minutes went on, “Our original bill has been revamped and sent to Governor’s LTF (legislative task force) to provide for no increases for individual licensees, increases going for businesses only. We are told as long as the association is still being funded by the board, there will be no fee increase bill. The board will have approximately $21,000 left in the bank at the end of FY24.”
Those minutes further state that the governor’s office at the time planned to ask the Legislature to repeal the law allowing the state board to provide 80% of renewals to the association. However, legislative records don’t show that any repeal was officially introduced during the 2024 session.
Tyler Laetsch was promoted to executive director upon Shanard-Koenders’ retirement, with the board approving his appointment at its June 2024 meeting. Laetsch didn’t respond to recent requests from KELOLAND News for the amounts that the board transferred to the association for the past three years.
