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State travel costs soar under Rounds
State workers urged to fly when possible
TERRY WOSTER & STU WHITNEY
©Copyright 2005
Argus Leader
Published: 09/26/05
Paul Kinsman, commissioner of the state
Bureau of Administration, walks past a Piper Navajo in the
state hangar Sept. 13. Kinsman's agency is in charge of
scheduling and coordinating state travel. Flying on state
business has been a priority for Gov. Mike Rounds.
(Stuart Villanueva / Argus
Leader)
GOVERNOR ON THE GO
Samples of the trips Gov. Mike
Rounds has taken on state aircraft since becoming governor in
January 2003.
DATE: Feb. 20,
2004
PLANE: King Air 200
DESTINATIONS:
Watertown/Sioux Falls/Washington D.C.
PILOTS: Ron
Hauck and Roland Ritter
PASSENGERS: Rounds, Jean
Rounds, Stephanie Tveidt, Kim
Juffer, Carrie
Rounds
TOTAL MILES: 2,547
COST:
$8,659.80
SUMMARY: The governor flew to Watertown to
watch Pierre High School play basketball, along with Jean
Rounds and staffers Stephanie Tveidt and Kim Juffer. After the
game, they flew to Sioux Falls to pick up Rounds’ daughter,
Carrie, who attends the University of South Dakota. From
there, they flew to Manassas (Va.) Regional Airport and headed
to Washington for the National Governors’ Association winter
meeting. The trip was billed to the Governor’s Office and paid
for by state taxpayers.
DATE: Aug. 17,
2004
PLANE: King Air 200
DESTINATIONS:
Watertown/St. Paul
PILOTS: Ron Hauck and Gov.
Rounds
PASSENGERS: Gov. Rounds, Chris Rounds, Brian
Rounds, Rob Skjonsberg, Jeff Erickson
TOTAL MILES:
716
COST: $2,434.40
SUMMARY: The governor,
along with sons Chris and Brian and chief of staff Rob
Skjonsberg, flew to Watertown to pick up banker Jeff Erickson,
who spearheaded fund raising for the new governor’s mansion.
The group flew to the Twin Cities, where the governor held a
business meeting before the group attended a baseball game
between the Minnesota Twins and New York Yankees. The trip was
billed to Tourism and Development and was paid for Aug. 15,
2005, by the Governor’s Club.
DATE: Oct. 13,
2004
PLANE: King Air 200
DESTINATION: Las
Vegas
PILOTS: Ray Ondell and Roland
Ritter
PASSENGERS: Gov. Rounds, Dana
Svendsen
TOTAL MILES: 1,817
COST:
$6,177.80
SUMMARY: The governor traveled with Dana
Svendsen of the South Dakota Highway Patrol to attend a
campaign rally for President Bush’s re-election. Rounds then
hit the road with other Republican governors on a two-day
campaign tour through Wisconsin, Ohio, West Virginia and
Pennsylvania. The flight to Las Vegas was reimbursed by the
Governor’s Club.
Multimedia:
•
View
the Sept. 25 print edition of Frequent Flier
(Adobe Portable Document Format)
• Download
a database of flight logs of state airplanes from Jan. 7, 2003
to Feb. 24, 2005
(Excel
Spreadsheet)
• View
a sample flight log from the S.D. Department of
Transportation
(Adobe Portable Document
Format)
• Download
a transcript of the interview between Argus Leader reporters
Stu Whitney and Terry Woster with S.D. Governor Mike
Rounds
(Word Document)
• View
the Sept. 26 print edition of Frequent Flier
(Adobe Portable Document Format)
• Listen
to the interview between Argus Leader reporters Stu Whitney
and Terry Woster with South Dakota Governor Mike
Rounds
(MP3 Audio File)
Related
Articles:
» Effort
would limit flights
» State
didn't pay for private trips, Rounds says
» Rounds'
family, friends fly free on state planes
» Travel
follows Pierre teams on the road
| For
Gov. Mike Rounds, the math is simple. State-owned airplanes
shuttling employees around a vast state such as South Dakota saves
money by conserving time.
The philosophy served him well in
private business, as a partner in the Fischer-Rounds Insurance
Agency. So the first-term Republican applied the same thinking when
he took over state government in 2003, issuing two memos encouraging
agencies to first consider flying when planning a trip.
"I
just don't like 'windshield time' if I can get away from it," Rounds
said.
Spending on the four airplanes used by executive branch
agencies jumped more than 75 percent from 2003 to 2004 to a total of
$761,588, according to flight logs released by the Rounds
administration and analyzed by the Argus Leader.
That policy
has not resulted in fewer miles driven by state employees. That
figure rose by 273,000 miles - an increase of slightly less than 1
percent - in the same time period, according to a state
analysis.
The executive branch's use of state airplanes drew
the attention of lawmakers earlier this year when Rounds approved
the purchase of a new plane for $1.5 million.
It's
unrealistic to think that using airplanes will significantly cut
into overall travel costs for state employees, who drove the state's
3,400 vehicles about 39 million miles last year, said Sen. Jerry
Apa, a Lead Republican who chairs the Legislature's Appropriations
Committee.
But Apa said the Legislature needs to examine the
budget for air travel, a sentiment echoed by other
lawmakers.
"I realize air travel has gone up substantially,
and that is a concern," he said. However, "increases in air travel,
even significant ones, cannot, will not cause vehicle travel to
decline, due to the magnitude of vehicle travel."
Miles flown
in the executive branch's four airplanes is still a small fraction
of the total traveled by employees, at less than 1 percent. But that
figure has almost doubled since 2000, to .81 percent for the year
ending June 30.
South Dakota's emphasis on air travel runs
counter to many of the states surveyed by the Argus Leader. Not all
share Rounds' opinion that heavy use of government aircraft saves
money.
Other states back away When Oregon suffered through a
budget crisis in 2003, its Legislature determined it was too
expensive to keep the state's two Beechcraft King Air planes - and
sold them on eBay.
Democratic Gov. Ted Kulongoski, who wasn't
in office when the planes were sold, has conducted business without
taking to the air.
"He travels mostly by car, but there are
times when commercial flights are used," said Anna Richter Taylor,
Kulongoski's deputy communications director. "The governor's
priorities revolve around targeting investments to strengthen the
economy. A new plane would not be at the top of his list."
In
South Carolina, Gov. Mark Sanford ordered that state employees cut
back on air travel, insisting that Cabinet-level officers use
commercial flights or drive whenever possible.
The
Republican, who took office in 2003, also ordered that the state end
its partial ownership of a jet that was rarely used - creating a
one-time savings of $1 million and annual savings of
$120,000.
"In general, the governor is very frugal," said
communications director Chris Drummond, adding that South Carolina
still owns a King Air 250 twin-engine plane. "His approach is, 'If
it was your own money, would you do it?' Based upon the limited use
of the jet aircraft, getting rid of it was an easy
decision."
The sky alternative Rounds, an aviation enthusiast who
has a private pilot's license, has drawn attention by using
state-owned aircraft for personal and political travel.
The
flight logs, a detailed record of each time a state plane takes off
and lands, show the governor's commitment to flying. The documents,
almost 3,500 pages released in March, show he often combined state
business with trips to Pierre High School athletic events, private
family functions and a Minnesota Twins baseball game.
The
broad use of state aircraft may run afoul federal guidelines for
public planes, rules put into place in response to the 1993 crash
that killed former South Dakota Gov. George Mickelson. Federal law
requires more strict certification if private money pays for those
flights.
South Dakota's situation appears to fit that more
stringent requirement by allowing the Governor's Club, money
funneled to Rounds through the Republican Party, to reimburse the
cost of some flights. But Rounds disputes that notion, saying that
as the governor, he's always on public business, which means the
state doesn't need to meet the more strict rules.
Claims of efficiency The state government's emphasis on
flying is documented in a pair of memos from Rounds' office. The
first, in December 2003, announced a new method of scheduling state
airplanes through the Bureau of Administration's Fleet and Travel
Management office.
The memo included a comparison of travel
times from Pierre to Sioux Falls, Rapid City and Aberdeen by each of
the state planes and by vehicle. The 1995 Beechcraft King Air 200,
for example, showed a round-trip travel time to Sioux Falls of 1.4
hours compared with 7.5 hours by car.
A February memo updated
the rates per mile of each aircraft, repeated the encouragement to
consider air travel and offered a contact number to reserve a seat,
schedule a flight or check on availability of airplanes.
A
Web site available to state workers provides an online way to sign
up for a flight.
The goal is to fill as many seats as
possible, said Paul Kinsman, commissioner of the Bureau of
Administration.
"That's the most efficient way to use the
aircraft," Kinsman said. "If you have five seats, and each is
filled, then the cost is being split five ways. If a person signed
up for a flight and was the only one on a five-passenger aircraft,
the agency would have to decide whether the trip was important
enough to pay the full cost of the flight."
28 of 30 days in the air Rounds sets a strong
example.
His schedule has him airborne 28 of September's 30
days. He told Flying Adventures magazine, in an article published in
the August issue, that he flies at least every other
day.
Although the article was largely positive, Rounds sent a
correction, noting that his claim that $780,000 had been saved in
travel time, expenses and overtime by having employees fly rather
than drive was a 30-month savings, not a yearly reduction as
suggested by the magazine.
If used wisely, flying can be less
expensive, Rounds argues.
"What we're trying to do with it
is, if we've got those fixed assets out there, and we're paying for
them, and we're paying for the upkeep on them, and we're paying for
the insurance on them and everything else, the more hours that they
fly, the fixed cost does not change," he said.
"The ongoing
fuel and so forth, but the lower that we can get the fixed price per
mile, the more efficient it makes it to operate the
aircraft."
Rounds' budget and travel staffs have compiled
supporting data to compare flying and driving for state agencies.
The examples use five state workers attending a three-hour meeting
in Sioux Falls, in Rapid City and in Aberdeen. It compares time
saved by flying based on average salaries, money saved by not having
meals, and the costs of getting employees to and from the different
cities by each of the aircraft and by a mini-van or
sedan.
The analysis offers this comparison for a trip for
five workers to Sioux Falls:
$1,194 in the nine-passenger King Air 200.
$983 in a typical sedan.
$863 in the five-passenger Navajo.
$728 in the four-passenger Seneca.
Not factored into
those calculations is the possibility that a vehicle trip would
require an overnight stay, Rounds said.
"What I've tried to
do is, first, avoid the overnight stays," he said. "Second of all,
avoid paying for the additional per diems, which most of my
employees do receive. ... You're talking about a breakfast meal, a
lunch and a dinner, so if I can save the evening meal as well, plus
get them there, get their meeting done and get them home before I'm
paying them (compensation time) or overtime, I'm better
off."
Geography factor A New York University professor whose
research has included a critical look at the use of corporate
aircraft said South Dakota's geography seems suited for air
travel.
"One clear result from the research into corporate
aircraft is that firms are more likely to have them if they are
located far from major airports and commercial transportation isn't
available,' " David Yermack said in an e-mail exchange. "That would
seem to apply to South Dakota."
In March, Yermack published
"Flights of Fancy: Corporate Jets, CEO Perquisites and Inferior
Shareholder Returns," which included an analysis of the effect on
companies that let the chief executive officer have the corporate
aircraft for personal use. The paper concluded that firms that
disclosed that benefit or perk had average shareholder returns that
under-performed market benchmarks by more than 4 percent
annually.
Yermack, assistant professor in NYU's Stern School
of Finance, called that "a severe gap far exceeding the costs of
resources consumed."
But he declined to analyze South
Dakota's use of aircraft, saying, "business and politics are two
totally different worlds," and "Issues like this are best resolved
by the voters."
Concerns at home Legislators need to dig into the air
travel logs, says state Rep. Gerald Lange,
D-Madison.
"Without micro-managing, how are we to find out
what's going on?" he asked. "It looks like we need to get the travel
logs of the planes to see whether 'this trip is really necessary.'
Is it really state business or Republican Party
business?"
Lange said he is concerned about the increase in
air travel.
"Do executives in government think their time is
that valuable that a regular vehicle wouldn't serve?" he asked.
"Certainly flying is a lot more expensive, right?"
Other
legislators say they'll need to study comparative air and highway
costs and numbers.
"The travel seems at first glance to be
quite an increase, whether it be by plane or car, and plane being
the most expensive," said state Sen. Gary Hanson, D-Sisseton. "I
would have to see a breakdown of the travel to better assess the
need."
State Sen. David Knudson, R-Sioux Falls, said senior
executives in state government "by the nature of their jobs, need to
travel great distances in South Dakota, and flying is frequently the
most efficient way to travel."
He said the variation in fleet
travel isn't necessarily a trend, and the state would need several
years of records to judge the efficiency of state
travel.
State Sen. Jason Gant, R-Sioux Falls, said he doubts
specific numbers will be available to prove that Rounds has brought
more efficiency to state travel, but he said airplanes make
sense.
"I would like to see that the additional time not
traveling between destinations is justifiable by more work output of
the individual," Gant said. "I don't think there are going to be
exact numbers to justify the air travel, but the individuals are
going to be able to testify that they are getting more work done for
the taxpayers."
Meanwhile, Rounds is committed to using the
state's airplanes to their fullest.
"It's not so much that I
emphasize flying as much as I say there's times in which it's a
waste to have someone sitting in a vehicle for three-and-a-half or
four hours going from Pierre to Sioux Falls or Pierre to Yankton,
when we can do the same trip in an hour or less by air."
Gains: Governor points to increase in productivity Support:
Republican contributors fund flights
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