So, how exactly do you cut property taxes by at least 50% on owner occupied homes?
- Propose huge jumps in sales tax?
- Propose new taxes which dump the burden on others?
- Shift property tax burden onto income producing/business property?
Encourage increase in economic development generating new tax revenue(Oops, we don’t do that here. See Summit, GEVO, and attacks on solar, wind, data centers, etc…)
This should be good.
None of the above. Hansen, Odenbach, and many others of their crowd have said repeatedly they will achieve these massive property-tax cuts by gutting state and local budgets. That includes substantial cuts to public education. They say they will then “pass the savings along to the taxpayers.”
Funny how the “small government” crowd want to involve themselves in local budgets. Government has always been really good about “passing on the savings”. This really is a ship of fools right now.
Only the local governments can cut local spending. The state takes care of state spending, so that won’t work.
Incorrect, if the state lowers the ability for county/local to collect revenues they can and have (see SB 216) been forced to cut local spending. Dog wags the tail.
As counties are barely staying afloat, where do you or anyone who does support cutting taxes plan to cut spending? I don’t see how this ends well at all except for the wealthy when they look to the middle and lower income classes to pick up the cost. We are on the path to an income tax and it may be cheaper for households under the 250k threshold if they continue to increase taxes elsewhere.
Senator Mehlhaff had the best proposal. A 1% sales tax increase, and zero tax exemptions. Create a special account from the tax to fund education. The proposal would provide over $1 billion in revenue. More than enough to pay for education. Thats what I got from listening. It was difficult to hear all the legislators.
Zero tax exemptions? That shifts the majority of taxes onto agriculture. Didn’t hear about a cut to ag land property tax. The Rapid City and Sioux Falls legislators would be more than happy with that. The farmers and rural communities would suffer significantly.
My proposal would decouple school funding from property taxes. All classes of property would be relieved from property taxes that fund k12 education. The revenue would be fully replaced by an education tax that would be collected in the same manor as sales tax, but there would be no exemptions to this proposed education tax except those that are constitutionally required. We are early in the process. If there are fairness issues identified by further analysis, I am open to adjustments in the manner the revenue is collected. My goal is to deliver meaningful property tax relief for all classes of property without gutting education or local government.
Jim, thank you for clarifying. That’s quite a bit different from remove all exemptions. This has some merit as the school takes the vast majority of our local property taxes. I knew you weren’t Ismay dumb.
SD Commerce data shows that residential property tax payers are subsidizing the large corporate farms. I don’t know anybody who’s in favor of that. Except the large corporate farms.
Zero tax exemptions is a horrible idea. You’ll have an economic catastrophe with more businesses pulling out of our state. Trust me, we don’t need to lose more business.
How are counties like Perkins, Harding, etc. going to replace the property tax income they would lose but won’t see in a sales tax increase?
How are they going to replace the schools that will be shut down?
They haven’t been. They’ve been auctioning the buildings.
Let the Democrat win and put in a income tax, blame the Dems.
But it would be interesting to see zero exemptions. To be a mouse in every small town bar in South Dakota.
It would hurt a ton of small businesses. No exemptions sounds great until you actually look at what the consequences will be. How’s that going to work for government agencies? Non profits? The tribes? All of these have exemptions. They are pulling this out of the air because someone at the lrc told them that exemptions equal the property tax numbers. That may be true but it doesn’t mean it’s a viable path. Melhaff is smarter than this. This is Ismay level dumb.
The Council of Research for the Legislatures has never been one to plant workable ideas in the brains of the legislatures. When the legislatures are filled with people like Mr. Ismay, the ideas fed to them by the CRL get just as dumb. This Mr. Mehlhaff’s idea, is it from the the fellow in the legislatures running for the Council of Utilities?
Looking forward to seeing the framework for the next Republican tax time bomb.
Toby wants to eliminate property taxes so he should have an answer as to where the money will come.
How about we just have the farmers pay their fair share?
Ag’s percentage contribution to property taxes keeps falling.
All the mustaches in the legislature from west bum fck aren’t going to fix this.
Compare your property tax bill to any farmer or rancher and then tell us who isn’t paying their share.
Pretty easy to do and it’s farmers and ranchers not paying by a ridiculous margin. The ag breaks are insane. They sell ground for $3million dollars and are paying $1,000 in taxes. Meanwhile a $350,000 residence is paying $4,400. Seems a bit lopsided, no?
The whole system was changed to a productivity index & a component is commodity prices. Row crops are half from their peak and making new lows as we speak.
What you are wanting is back to the old system based on comparable sales.
Your example quoted is quite exaggerated, a bare quarter of class A farm ground is not paying $1,000 more like $3000-$4000 per year.
Not even remotely accurate in butte, Harding or Perkins county. My numbers are not exaggerated in the slightest. The numbers are easily verifiable through the tax rolls.
Probably not being purchased for its production merits, and more of an outlier. $1500-1800 buys farmland in Perkins county, not $18-20,000.
https://www.landwatch.com/perkins-county-south-dakota-farms-and-ranches-for-sale/pid/421037132
Here you go, buy it and turn it for a cool $8MM.
Stay focused here. What are the taxes on that 480 acres going for $750K? And of course it depends on where and what you are doing with it as far as selling price, but the fact that the taxes are ridiculoulsy low remains. Class A land on border of Butte and Lawrence – 40 acre parcel taxes $33.12. 80 acre parcel $251.96. 480 acres taxes $592.96. You’ve disproved your own point here. A bare quarter of farm ground isn’t paying anywhere near $3,000 for taxes. Probably less than $100. Again, grab the assessor’s tax rolls and take a look. Ag pays no where near their fair share and is subsidized by urban taxpayers. Not even sure how that’s debatable. If you want to argue that ag should be subsidized by urban taxpayers, that’s a different argument.
Take a look at the composition of the task force, none of whom have had any experience crafting property tax legislation in the past 2-3 years. A rudder-less ship that keeps running aground. As a commentor earlier said, its easy to say “lets cut property taxes” but its much harder to actually do it in a constructive manner that won’t harm our schools and local governments. These legislators keep talking out of both ends….they say the support “local control” yet love sitting on their thrones Pierre telling their “subjects” what they can and can’t do. The 2026 legislative session will be a major cluster…. with everyone positioning themselves for re-election.
Definitely need to cut back on owner occupied property taxes. They are getting out of control. Probably means adding to the sales tax – so it becomes a shift. No exemptions just doesn’t make sense – there’s reasons so many exemptions are on the books and they have been discussed and debated a lot over the years.
With a significant tax cut, we also need to be looking at costs. If people are serious, it means school and county consolidation. It should mean a $400 million prison instead of the $800 million Noem proposal. Noem always liked to claim to be a budget hawk, but the reality is she spent covid money like a champ.
Tax exemptions – a large portion Agriculture – add up to BILLIONS (with a B) of dollars annually. It’s past time for farm equipment that uses the highways to pay a wheel tax for example. Advertising is another tax that lobbyists have held at bay for years. Just two examples. It’s a very long list that was given to me one time by a past leader at the SD Department of Revenue. All you have to do is ask.
EXACTLY! i’m sick and tired of paying for roads for all these exempt vehicles to drive on. Farm equipment, bicycles, etc. It’s time they get taxed and require to register their vehicles.
For those of us living in rural areas, we’re pretty sick of paying taxes for urban programs that we don’t utilize.
Personally, I consider food a product everyone needs, and without a viable AG industry, you’ll get pretty damned hungry.
Just as those in the town are tired of paying for county roads and bridges that most of them have never driven on a single time in their lives. There needs to be a real sit down discussion about how things are paid for and who does the paying. Some exemptions need to be discussed and possibly removed, but certainly not all. There’s a more workable middle ground in here somewhere.
Dagburnit! We only want to pay for the streets and roads we drive a regular basis on. We do not want to pay for roads we never use! Let them pay for them!
If the Doedites, Lemmings and other gullible Wackadoodles want the pie in the sky “No More Property Taxes.” Would they like to go to a “mutual aid” system where they live where if they need a street, road being gravel, paved or concrete they do it themselves? Blizzard? Clear the roads themselves and same with flood damage pertaining to repair. Water and sewer? Neighbors helping neighbors! Schools? Public schools? closures. Pandemics? Quarantine them so they can break out their crystals, essential oils, magnets, ear candles, horse de-wormer, vitamins, potions, tinfoil and whatever else.
Ok hear me out. California had prop 13 which acted as kind of a tax freeze. I know, I know, California, yuck. But let’s talk about it. We are essentially taxing unrealized gains in our homes, which have always been referred to as one of the biggest “investments” a person will make. We don’t let our other unrealized gains in investments be taxed, right?
Now consider who is setting the value of your home to be taxed. County Assessor, right? Appointed person to a position that does not require any specific qualifications. You don’t need to have accounting skills, formal budgeting training, be an appraiser, etc. Yet, they are essentially a defacto appraiser when it comes to assessing your home’s value. They go to a couple of classes and are deemed certified to make these assessments. Meanwhile, actual appraisers need hundreds of hours of apprenticeship to become a licensed appraiser.
Maybe, it makes a little sense to tax your home at the value it was worth when you bought, as set by the market. Makes it a very simple job. You purchased your home for $300k so that is the easily identified taxable value. Then the tax is set at that amount until sold again. We don’t need a basically untrained third party trying to guess the current market value of your home. Your home is worth what someone will pay for it. This would help seniors who are aging in place. They wouldn’t need to file for exemptions as they would have owned their home for a while and the taxes would be comparatively low compared to a newer home or someone new buying into their neighborhood. It also makes the assessor job so simple that you can actually cut county costs, which is the big factor in all this. You won’t need all the training, and you won’t need 6 people hired with all of their benefits in the assessors office. Can’t reduce taxes without cutting costs. This achieves both.
soumds fair anonymous 11.12 am. thats why it won’t work in sd.where’s the corruption and back room deals? Single party rules here. Fairness for all. What are you, some kind of communist, or worse yet, a democrat?
It certainly makes everything transparent and black and white. And harder to manipulate funds and tax dollars with complicated formulas. So yeah, it won’t work here.
A few comments on property tax and what needs to be done to accommodate meaningful and responsible legislation to address the issue.
First of all the problem was created at the local level in the name of economic development by local officials and developers. The locals wanted tools in their “economic development tool box” and the legislature always pandered to their wants. In addition developers no longer want investors to in their vocabulary, They want that investment to come from the taxpayer.
This is a complex issue and cannot be resolved in 1 legislative session, but it must be done. I saw this issue become out of control during my 14 years on the tax committee when I was in the legislature, and it has only become worse over the past 10 years.
I believe that to address this issue some concessions must be made now, they include but are not limited to:
1. Put a moratorium on the creation and limit the use of TIFD’s, by local governing bodies beginning immediately. These things have proliferated and one is never paid off before several more are initiated. 12 to 20 active TIFD’s in any local government is profound abuse.
2. Put a moratorium on the creation and/or use of any further discretionary tax formulas. These can also be used in a TIFD and that provision needs to explicitly deny that.
3. Put a moratorium on the creation of any additional subdivision taxing districts within local government.
4. Prohibit the creation of any new political/public subdivisions by the legislature.
5. Restrict/prohibit any new “opt outs” and freeze those already in place from renewing or or expanding those opt outs.
6. Freeze levies for a period for those subdivisions already in existence, except if they should choose to lower the existing levy.
7. Freeze all specials and road tax on real estate at current levels, unless it is a reduction.
8. Reduce bonding authority levels of all local governing bodies.
9. Further restrict growth in local governing bodies budgets.
10. Restrict the BBB tax, BID tax, and city sales tax to current levels, and prohibit the use the use of these taxes to only the general fund with an obligation to reduce property tax. It has become increasingly evident that these dollars are being used as a cash payout to developers with little or no regard for the taxpayer. Restrict BID boards and all other political subdivisions from giving tax revenue to any other body with taxing authority.
11. Require local governing bodies who have acquired real estate to get at minimum the price they paid for the property, rather than just a fraction of what they paid for it.
12. Prohibit any non-profit with taxing authority from asking for any local governing body for contributions outside of their tax base.
This certainly is not a complete list, but it is a beginning. I firmly believe many of these things need to be done for accountability at the local level. I blame the legislature for many of the problems associated to property tax increases. Most off the issues prevalent today are caused by the term “economic development”, in an effort to lower taxes. It doesn’t work, never has worked, and will never work. Countless studies have indicated, time and again, that these issues cause an increase in taxation rather than a reduction.
Furthermore these thing are being abused by the affluent, developers, “non profits”, and the unknowing and uninformed (local elected officials), all at the expense of the local taxpayers,
and that is a fact. Local property taxpayers are being lead to slaughter in the name of corporate welfare, and it needs to stop. If a developer thinks he/she has a valid idea he/they should have no problem finding investors to support the idea without the taxpayers investment which, is a liability on them and never produces a dividend.
I know this will be a hard sell as developers and the unknowing locals will fight it with a vengeance. It has become apparent locally that elected officials don’t run the show, they are kept in the dark and fed sh_t like a mushroom.
Ask some hard questions of local officials about current activities in your area. They refuse to answer, skirt the issue, or lie. I have investigated and found the answers and the truth. Documentation is damning.
To provide adequate property tax relief requires doing a responsible study as to the real problems associated with it. To get a responsible study all of the issue listed previously must be considered, and that cannot be done responsibly during a short legislative session.
Initiating some or all of the previous stated issues can go a long way to improve a comprehensive study and reduce inflated values and property taxes. I understand the legislature did not cause the problem entirely, but they did enhance it and became enablers for the local governing bodies, who do not responsibly use the tools given to them. I know they asked for it, but like a child who doesn’t understand, sometimes you must take away their gift until they can totally understand the ramifications of improper use.
Municipalities are allowed a sales tax. The purpose behind that was to supplement their general fund budget. Not to use as grants to developers for millions of dollars.
There is a lot going on, misuse of those dollars needs to be cornered, if it is not it will only become worse for the taxpayer.
No new taxes would be necessary if local governments were made to be responsible.
So you stand firmly in favor of removing local control from political subdivisions?
Unless you can find a way to reduce infrastructure costs, TIFD will be a necessity for any growth. The tifd are fine and the people they bring to the community make up for it in employment and creating additional sales tax. Plus the municipality still gets the taxes, they are just delayed but it’s better than empty ground not generating anything. The rest of your points I can more or less agree with.
“the municipality still gets the taxes, they are just delayed”
OK, I’ll play.
Do the future value lump sum payment required of foregoing a single $1 million installment (i.e. not collecting on only one annual tax revenue payment) for 10 years (most TIFs are 20 years). Use 5% annual, the cost of the additional finance charge which developers are allowed on TIF amounts. It’s a huge number which is never recouped.
Now add the future value proceeds of the other 9-19 years.
Or don’t grow your communities. Whatever you want bud. I’ll take the businesses and people and sales tax revenue over here.
That’s it?
An absolute requirement of “growth” is a cut off the top of property tax revenue?
Government needs to “invest” in order that there be growth? Eiesenhower/Rockefeller republicanism (and the rest of the 1950s) is alive and well in South Dakota.
Bravo Sir / Madam!
The Sioux Falls City government, overly fat from the largesse of collecting the maximum levy on property taxes AND a 2% sales tax (and a number of other BID and business taxes, too) granted a $21.5 million TIF gift (plus provision for an additional 5% permanent finance cost of the TIF amount) to the developers of The Steel District the result of which will be that the Sioux Falls School District will forego collection of $1.05 million of real estate tax proceeds from those parcels in 2026.
The City of Sioux Falls also granted to the developer of Cherapa II a $25.4 million dollar TIF gift (again, plus a provision for an additional 5% permanent finance cost of the TIF amount). To finance this gift to the developer, the Sioux Falls School District will forego collection of nearly $1.2 million of real estate tax proceeds from those parcels in 2026.
For the 2026 budget, the Sioux Falls School District is proposing that “regular tax paying patrons of the district” begin footing the bill for annual opt-out spending (in excess of real estate tax levy limits) of $2.1 million per year … for the next 10 years.
A real example of exactly that which is outlined in the comment above.
They still get the taxes on the base land, just not on the improvements. Without the tif, they wouldn’t be improved. They wouldn’t create jobs and bring more kids into the district. School is still getting the same as they were last year. Sounds like your school district has budgeting issues unrelated to the tif. Tifs don’t take money from the schools, it certainly delays the additional taxes, but it doesn’t take money from them. They aren’t short a million dollars because of a tif. If they could balance a budget last year, they can do it again as nothing has changed for them. School districts use tifs as an excuse.
“Tifs don’t take money from the schools”
Just where do you think the money comes from if it doesn’t come off the top of collection of real estate taxes by counties, school districts and municipalities?
Of course school funds take money from the property taxes. The point is without the tif, there would be no development at all, so the school would be taking the same money they always were from the undeveloped land. It doesn’t take money from them, they just don’t get more right away until the tif is paid back. The fact that there is new development shouldn’t really impact their budget. If the budget worked last year, it should work this year regardless of the tif.
I expect there to be many multi-family housing units on TIF parcels associated with the 85th St interchange off I-29.
Lots of additional kids to attend schools.
Would you not expect that the budgets of Tea or Harrisburg school districts would need to increase in order to accommodate that influx of students?
No I do not stand in favor of removing local control. I stand for making sure everybody lives within their budget, including the state, without a landslide of other tax increases, new taxes, fees, and new and expanding surcharges. Currently there are taxpayers that have as many as 4 surcharges on municipal bills.
I have never seen a government budget that didn’t have fat in it. In my 28 years of public service when “push came to shove” I could always find that fat, reduce it, and still have a budget that was meaningful and provided what was needed and necessary. All government and non-profits now want to live in luxury at taxpayer expense. Responsibility no longer exists in any government budget. It is time for all political budgeting personal to put a foot forward and help with this crisis rather than sit in the shadows and continue their pouting and crying.