When Gov. Bulow vetoed the state budget

The last week of the legislative session always focuses on finalizing the state budget. As the news reports on the negotiations and posturing, I have had a few people ask me if the legislature has ever failed to pass a general appropriations act.

The only time I am aware of is the 1927 legislative session. That was Governor William J. Bulow’s first year in office. He was the state’s first Democratic governor, serving alongside a strongly Republican legislature.

I had the opportunity a couple of years ago to edit Bulow’s unpublished autobiography, excerpts of which were published by South Dakota History in its Spring 2021 edition. Below is a selection from Bulow’s memoirs, in which he describes the events that led to his veto of the general appropriations act in 1927:

I had made my campaign stressing a balanced budget. That state expenses must be kept within revenue income. I said that if we continued to expand each year in excess of revenue income, and without giving any attention to revenue income. we were headed for bankruptcy. The Republican stewardship had been wrong and there needed to be a change. I told people that when I came to the state as a young man, the state then had no bonded indebtedness. It was then the boast of the people of South Dakota that the state had the highest per capita income, and the lowest per capita tax, of any state in the union, but under the Republican stewardship over the years, we now had a bonded debt of over sixty-five million dollars, and we were fast approaching the record of becoming the highest per capita debt of any state in the union. I said that this thing had to stop – this reckless spending without regard to revenue income had to be halted. [This debt was due to the failure of the Rural Credit program, a state ag lending program created by Governor Norbeck, whereby the state borrowed money at a low rate and loaned it out to farmers. The program became insolvent during the farm crisis of the early 1920s, and it took the state until the 1950s to pay off the debt.]

I put great stress on this in my message to the legislature and gave the members of that body to understand that I would not approve appropriations in excess of revenue income. When the annual appropriation bill came to me for approval it reflected the same old story. From the best information I could get, the legislature had appropriated more than a million dollars in excess of the possible revenue income. I promptly vetoed the measure. In a message I gave the legislature two alternatives: they must either cut down the appropriations to within the revenue, or they must provide more revenues. The House promptly overrode my veto and passed the bill, but its passage was blocked in the Senate. There were sixteen Democratic senators in the Senate who stayed by me, plus one Republican, Senator Hicks from Lincoln County who joined with the Democrats, and the appropriation bill went down to defeat. 

This made the Republican legislative members awfully mad, and they decided not to pass any other appropriation bill. They had ample time in which to do so before the sixty-day limitation of the session expired, but they decided not to do so. They sent word to me and wanted to know how I was going to collect my salary and how I was going to run the governor’s office after the first day of July when all appropriations expired and there would be no money to pay me. I sent word back that I did not need any money to run the governor’s office; that all I needed to run that office was plenty of chewing tobacco, and a few good Democrats had agreed to supply that. I was going to get along all right, but I was wondering what all the Republican officeholders were going to after July 1st. 

Immediately after adjournment of the legislature, the Republican leadership brought an original action in the Supreme Court against me, in which they contended that a governor has no power to veto a general appropriation bill. All the judges of the supreme court were Republican, but they were all men of the highest integrity and I was perfectly willing to submit the case to them and abide by their judgment. 

In as much as the salaries of the judges were involved in the appropriation bill which I had vetoed, the members of the court felt that in good ethics, they could not sit as judges in the case. Under provisions of law they could, in such cases, select a special court from among the lawyers of the state to sit as special judges. This was done. Five prominent lawyers were selected from the membership of the state bar. Three were Republicans and two were Democrats, and they sat as judges and tried the case. 

The case was hotly-contested and well-tried. The judges reached a unanimous decision sustaining the governor’s veto. At the end of the fiscal year, June 30th, all unexpended appropriations would revert back to the general fund, and after that there would be no money for any of the state activities. It was necessary to call a special session of the legislature to provide for funds to carry on the business of the state after July 1st. 

I waited until well into June before making the call. When the legislature reassembled, everyone was in better humor. The legislative members had visited with “the boys back home” and had discovered that the “boys back home” were not particularly mad at the governor and were in favor of cutting down state expenses. We had no difficulty in getting together on a new appropriation bill and fixed it so that all the boys on state payroll had a little money to spend in celebrating the 4th of July. 

Bulow will be among the final three statues to join the Trail of Governors in Pierre on June 17, 2022. The addition of Bulow, along with governors Andrew E. Lee and Frank M. Byrne, will mean that every former governor will be included on the Trail. Going forward, future governors will be added to the Trail after they leave office.