UPDATE: South Dakota lawmakers have launched a significant push to tackle soaring property taxes with at least 28 bills introduced this legislative session. This urgent response comes as property taxes have skyrocketed nearly 70% over the past decade, intensifying pressure on elected officials to act.
The legislative session commenced earlier this month and will continue until March 2024. Governor Larry Rhoden has backed a pivotal bill allowing counties to implement a 0.5% sales tax to fund property tax relief directly. Democratic leaders have indicated they will soon unveil their own relief proposals, adding to the growing urgency surrounding this issue.
Senate Assistant Majority Leader Carl Perry, R-Aberdeen, likened the struggle for property tax solutions to a game of “Whack-A-Mole,” emphasizing the need for consensus among lawmakers. “It’s going to be tough to get things exactly right, but we’re going to work at it,” Perry stated.
The growing financial burden of property taxes has critical implications for homeowners, particularly as the state government relies primarily on sales taxes. With local governments and schools dependent on property taxes, the rising rates have sparked widespread concern.
Among the proposals under consideration, one from U.S. Representative Dusty Johnson aims to utilize funds from an anticipated increase in the state sales tax rate to alleviate property tax burdens. In 2023, the Legislature, alongside then-Governor Kristi Noem, reduced the sales tax rate from 4.5% to 4.2%, with plans for the reduction to sunset in 2027.
Senate President Pro Tempore Chris Karr, R-Sioux Falls, introduced a bill this week to maintain the sales tax at 4.2%, arguing that increasing the sales tax would unfairly burden taxpayers already struggling with property tax increases. He stated, “No matter how bad we want property tax relief, that’s not right. The ends don’t justify the means.”
Last year’s property tax relief legislation included measures like capping countywide residential assessment growth and expanding eligibility for relief programs targeting the elderly and disabled. However, lawmakers are now considering raising the cap on new construction growth from 3% to 5%.
Deputy City Administrator Heath VonEye from Harrisburg warned that the current cap restricts growth, stating that the city could lose nearly $3 million in revenue from 2027 to 2031. He emphasized that the burden of funding essential services is increasingly falling on existing homeowners.
The Senate Taxation Committee recently passed a proposal to raise the cap with a 6-1 vote, although questions about the effectiveness of last year’s caps were raised. “I don’t know that there should be a cap,” said Senator Tamara Grove, R-Lower Brule.
Pending bills include a range of measures aimed at various aspects of property tax relief. Notable proposals include:
– **Senate Bill 85**: Mandates elections for schools exceeding property tax limits.
– **House Bill 1168**: Offers property tax credits for private school or homeschool expenses.
– **Senate Bill 12**: Provides missed property tax refunds for veterans and surviving spouses.
– **Senate Joint Resolution 505**: Proposes a constitutional amendment to limit annual assessed valuation increases to 2%.
Several bills seeking to restructure the funding of public education and property taxes have failed to gain traction. For instance, Senate Bill 99 aimed to transition funding from property taxes to sales taxes but was halted in committee with a 6-1 vote against it.
The ongoing legislative session is critical, with potential implications for property tax relief strategies affecting thousands of South Dakota residents. As lawmakers navigate these complex proposals, the urgency for effective solutions remains paramount.
Stay tuned for more updates as this situation develops, and watch for announcements regarding new proposals and legislative actions.
