UPDATE: South Dakota lawmakers have just introduced an urgent wave of 28 bills aimed at tackling soaring property taxes this legislative session, which began earlier this month and continues until March 2024. With property taxes having surged nearly 70% over the past decade, the pressure is mounting on officials to deliver immediate relief.
The Comprehensive Property Tax Task Force recommended 19 proposals last October, with many still pending introduction. Among the key proposals is a bill backed by Governor Larry Rhoden, which would permit counties to implement a half-percent sales tax specifically for property tax relief. Lawmakers must act swiftly as the demand for solutions intensifies.
On Thursday, Democratic leaders announced plans to introduce their own property tax relief proposal soon, a move aimed at enhancing competition in the legislative arena. Senate Assistant Majority Leader Carl Perry likened past property tax reform efforts to a game of Whack-A-Mole, acknowledging the challenge of achieving consensus amidst numerous proposals.
“It’s going to be tough to get things exactly right, but we’re going to work at it,” Perry stated, emphasizing the urgency of finding a workable solution. State government relies heavily on sales taxes, as counties and schools are primarily funded through property taxes.
Highlighted proposals include U.S. Rep. Dusty Johnson’s initiative that would use funds from an anticipated sales tax increase in 2025 to alleviate property tax burdens. Recent legislation reduced the state sales tax from 4.5% to 4.2%, with plans to revert to the higher rate by 2027.
Meanwhile, Senate President Pro Tempore Chris Karr introduced a bill that would maintain the sales tax rate at 4.2%, warning that a higher rate could further burden taxpayers already struggling with property taxes. Karr voiced his concerns, stating,
“No matter how bad we want property tax relief, no matter how bad it’s needed, that’s not right.”
Last year, the Legislature passed multifaceted property tax relief measures, including caps on countywide residential assessment growth and exemptions for home improvements. However, Sen. Randy Deibert proposed raising new construction caps from 3% to 5%, arguing that the existing limits hinder community growth.
During a recent hearing, Heath VonEye, deputy city administrator for Harrisburg, warned that strict caps could lead to significant revenue losses, potentially amounting to nearly $3 million by 2031, affecting essential services for existing homeowners.
As lawmakers sift through numerous proposals, several notable bills are still alive, including:
– Senate Bill 85: Requires elections for exceeding property tax limits.
– House Bill 1168: Provides a property tax credit for private school or homeschool expenses.
– Senate Bill 12: Offers missed property tax refunds for veterans and surviving spouses.
– Senate Bill 118: Allocates $425,000 for tax refunds to low-income elderly or disabled residents.
However, not all proposals have advanced. A controversial bill to shift public education funding from property taxes to sales taxes failed in committee, highlighting the complexities involved in property tax reform.
As South Dakota’s legislative session progresses, the urgency for property tax relief has never been more pronounced. Lawmakers are poised to debate and refine these proposals, aiming to provide essential relief to residents feeling the financial strain. Stay tuned for further updates as this situation develops.
