UPDATE: South Dakota lawmakers have introduced an urgent wave of 28 property tax bills this legislative session, with more proposals expected as the session continues until March 2024. As property taxes have surged nearly 70% over the last decade, lawmakers are under immense pressure to deliver relief to residents facing escalating costs.
This legislative session, which began earlier this month, has already seen significant discussions around property tax reforms. Governor Larry Rhoden is advocating for a crucial bill that would permit counties to implement a half-percent sales tax to provide property tax relief, reflecting a growing urgency among officials to address rising homeowner burdens.
Democratic leaders have indicated they will soon introduce their own property tax relief proposals, adding to the momentum of this critical issue. Senate Assistant Majority Leader Carl Perry likened previous attempts at tax reduction to a game of “Whack-A-Mole,” emphasizing the challenges ahead in reaching a consensus. “It’s going to be tough to get things exactly right, but we’re going to work at it,” Perry stated.
The state’s reliance on sales taxes, rather than property taxes, complicates the situation. While counties and schools depend heavily on property tax revenue, the state government and cities primarily rely on sales tax income. This dynamic has fueled a debate over the best approach to relieve financial pressure on homeowners.
Among the proposals, U.S. Representative Dusty Johnson is suggesting a method to utilize next year’s scheduled increase in the state sales tax to offset property taxes. Meanwhile, Senate President Pro Tempore Chris Karr proposed capping the state sales tax at 4.2% to prevent further tax burdens on residents already struggling with high property taxes. Karr criticized the notion of using sales taxes to alleviate property taxes, likening it to a feudal system where the common people bear the brunt of burdens meant for landowners.
Lawmakers are also addressing the impacts of past legislation. Last year, a comprehensive property tax relief package was enacted, including caps on county assessments and exemptions for certain home improvements. However, the current cap on new construction and growth limits some communities from self-funding developments, leading to potential revenue losses. For instance, Heath VonEye, Harrisburg’s deputy city administrator, reported that the revenue loss due to current caps could reach nearly $3 million between 2027 and 2031 for his rapidly growing city.
In light of these pressing concerns, several key bills are still in progress. Notable proposals include:
– **Senate Bill 85**: Mandates elections for schools wishing to exceed property tax limits.
– **House Bill 1168**: Offers property tax credits to cover private school or homeschool expenses.
– **Senate Bill 12**: Aims to provide missed property tax refunds for veterans and surviving spouses.
– **Senate Bill 196**: Seeks to increase income limits for the state’s property tax assessment freeze program.
With lawmakers grappling to balance the needs of constituents while exploring viable solutions, the discourse on property tax reform continues to evolve. Some bills, such as Senate Bill 99, which proposed transitioning education funding from property taxes to sales taxes, have already failed, illustrating the contentious nature of tax reform.
As South Dakota legislators navigate these complex proposals, the urgency for effective property tax relief is palpable. Residents and local governments alike are keenly watching the developments, hoping for solutions that will alleviate the financial strain of rising property taxes.
Stay tuned for more updates as this vital legislative process unfolds in the coming weeks.
