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Reality Check: Is South Dakota's Strategy Of Luring Minnesota Businesses A New Tactic?

July 15, 2020 / 10:00 PM CDT / CBS Minnesota

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MINNEAPOLIS (WCCO) -- The state of South Dakota has launched a major marketing campaign -- in Minnesota. It's unusual not just because it's targeting Minnesota businesses, but because it's asking them to relocate due to Minnesota's pandemic shut down.

The global coronavirus pandemic, related business shutdowns and civil unrest have left some Minnesota companies feeling uncertain. And South Dakota sees an opportunity in an ad from Republican Gov. Kristi Noem and the South Dakota Department of Economic Development.

It's a 1-minute television ad luring Minnesota businesses to the Mount Rushmore state in which Gov. Noem says:

"When it comes to supporting companies and eliminating heavy-handed government interference, South Dakota means business."

Although states compete for business all the time, South Dakota's ad is unusual: it uses the concept of personal freedom with a pandemic-related appeal.

The ad specifically targets Minnesota companies upset about Democratic Gov. Tim Walz's order to shut down business during the pandemic.

Here's what Gov. Noem says: "Here in South Dakota, we trust our people. We respect their rights. We won't shut them down."

South Dakota and Minnesota have a 35-year history of squabbling over businesses. In 1987, it got personal and went national -- neighboring governors in a very public feud.

Former Democratic Minnesota Gov. Rudy Perpich was irked by South Dakota's efforts to lure Minnesota businesses across the border but noted the state had low wages and whatever the business advantages "you still wake up the next morning in South Dakota."

Former Republican South Dakota Gov. Bill Janklow retorted that Minnesota falsely claimed to have a major league baseball team, the Minnesota Twins.

On PBS MacNeill-Lehrer Report, anchor Robert MacNeill said, "Minnesota's governor called South Dakota 50th in everything".

While South Dakota's governor has ridiculed everything from Minnesota sports teams to what he calls its byzantine tax structure "19."

In the 2020 version, South Dakota says national uncertainty is generating an unprecedented number of calls from businesses wanting to relocate -- 20% of them being from Minnesota.

Minnesota's Department of Employment and Economic Development won't comment on the ad but defends the governor's shutdown order.

In a written statement it said the long term data about impacts on Minnesota businesses aren't yet available:

"We believe that Minnesota offers businesses critical value in areas such as a well-educated workforce, strong infrastructure, and quality of life. As Governor Walz, Commissioner Grove and other state leaders have regularly pointed out, there is a critical balance between public health and economic considerations that are at the core of every decision the state of Minnesota has made in response to the COVID-19 pandemic."

South Dakota did have serious COVID-19 outbreaks, but Gov. Noem imposed almost none of the pandemic orders other Governors did.

Currently, South Dakota is among a handful of states with average COVID-19 cases declining.

That's Reality Check.

Here are some of the sources we use for this Reality Check:

Pat Kessler
South Dakota