Release: Business Groups Concerned with Property Tax Scheme

Business Groups Concerned with Property Tax Scheme

Sioux Falls, SD – A broad coalition of business groups has expressed concern with statements made by gubernatorial candidate Toby Doeden regarding the elimination of nearly $2 billion in local property taxes by cutting funding for schools, counties, and cities and implementing new taxes on visitors.

In response to survey questions and in conversations with business groups, Doeden has pledged “aggressive spending reductions” to local governments while seeking “additional sources of revenue.”

Doeden has claimed that families would “pay any price in the world” to come to South Dakota and that “it’s time for tourists and out-of-state visitors to pay their fair share . . . we will be obtaining new revenue from tourists that come here to enjoy our beautiful state.”

Eliminating nearly $2 billion in funding for schools, counties, towns and other local needs – which is the equivalent of roughly 80 percent of the general fund budget for the State of South Dakota – with cuts and new taxes would negatively impact infrastructure and place even greater strain on local businesses.

“South Dakota’s business community has spent decades building a reputation for fiscal discipline and sound governance,” added Ryan Budmayr, President of the South Dakota Chamber of Commerce & Industry. “We support real tax relief, but any plan of this size needs to be grounded in real numbers so families and businesses can trust it will actually work.”

“A one percent statewide sales tax raises about $350 million,” said Nathan Sanderson, Executive Director of the South Dakota Retailers. “To replace $2 billion in local property taxes would require a nearly 6% sales tax rate on top of our current sales taxes and if it’s applied more narrowly it would need to be much, much higher. This would crush businesses and cripple our state’s No. 2 Industry.”

“Property taxes fund schools, counties, towns, and other local needs,” said Garth Wadsworth, Senior Public Policy Director of Elevate Rapid City. “We need to educate our kids, maintain county roads, and repair necessary infrastructure; we cannot cut all of these services.”

“Infrastructure is the backbone of commerce,” said Jeff Griffin, President and CEO of the Greater Sioux Falls Chamber of Commerce. “Cutting infrastructure while raising taxes would have a very negative effect on South Dakotans.”

“A new consumption tax on visitors would make South Dakota less competitive, increase the cost of visiting our state, and reduce visitor spending—while the logistics of determining who is a visitor could also result in unintended costs and impacts for South Dakota residents,” said Carmen Schramm, Executive Director of the Tourism Coalition of South Dakota.

“This plan is simply not workable,” said Mike Bockorny, Executive Director of the Economic Development Professionals of South Dakota. “Small businesses, local restaurants, gift shops, hotels, coffee shops, book stores, and attractions across the state would be devastated. This is not the right approach for South Dakota.”

Groups expressing concern about Doeden’s property tax scheme include: