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Yahoo
08-03-2025
- Business
- Yahoo
Property tax relief plans loom over final days of SD legislative session
A January 2025 view of the South Dakota State Capitol in Pierre. (Makenzie Huber/South Dakota Searchlight) South Dakota lawmakers have four days left to agree on a property tax relief plan. There are three bills left on the table: House Bill 1235 from Rep. Greg Jamison, R-Sioux Falls, caps local governments' inflationary property tax collection growth at a lower amount year over year. Senate Bill 191 from Sen. Amber Hulse, R-Hot Springs, rolls back assessments for some homeowners and caps assessment growth for all of them. Senate Bill 216 from Gov. Larry Rhoden caps countywide residential assessment growth for five years, caps the amount local governments can increase tax collections based on new construction and growth, exempts some home improvements from affecting assessments, and expands eligibility among disabled and elderly people for relief programs. Legislative tone shifts from helping counties to blaming their spending Legislators – including many who campaigned on the issue – must determine which bill or bills will make it to the governor's desk. They went home Thursday evening for a long weekend and will return Monday to Pierre for the final four days of the legislative session, except for a day in late March to consider the governor's vetoes. 'The best measure with the most relief should make it through,' said House Majority Leader Scott Odenbach, R-Spearfish. Lawmakers are responding to public calls for relief, largely from non-agricultural property owners. Since 2017, property tax payments have gone up 47% for owner-occupied homes and 36% for commercial property, while rising 3% for agricultural property. Ag land taxes have been held in check by a change from market-based to productivity-based assessments. All three bills are expected to be debated on Monday. Meanwhile, the Legislature passed a resolution Thursday to ensure the body will dig deeper into property tax policies. That bill creates an interim task force to 'identify impactful, substantive measures' to provide significant and lasting tax relief. The task force will include 16 lawmakers, a representative from the Bureau of Finance and Management, and a representative from the Governor's Office. Senate President Pro Tempore Chris Karr, R-Sioux Falls, said property tax reform is 'one of the most important priorities' of the legislative session. 'We need to take a look at the whole picture of what's happening,' Karr told lawmakers, 'what forces are driving the property taxes to increase and what some of the mechanisms are that we can look at and consider to provide relief.' Jamison's House Bill 1235 would reduce local taxing districts' annual inflationary budget growth from a 3% cap to a 2.5% cap. In both cases, the inflation rate becomes the cap if it's lower than either percentage. The majority of property taxes — 56% — goes toward public school funding. Around 13% goes to cities, 27% goes to counties and the rest goes to various local entities, according to the state Department of Revenue. The state does not receive property taxes, relying instead on sales taxes. Yvonne Taylor, representing the South Dakota Municipal League, told lawmakers earlier this week that Jamison's legislation is 'much more survivable' for city budgets than the other bills proposed. Counties and schools affected by the legislation, lobbyists said, would face more difficulties to meet obligations without seeking 'opt outs' to generate more taxes. An opt out is a decision by a local governing body to exceed the cap on annual property tax collection growth. Jamison told lawmakers on the Senate Taxation Committee that the legislation would not provide as much property tax relief 'as you want, or the people that I represent want.' But it's enough to send a message to local governments, according to Jamison, that they need to reevaluate their budgets and address the burden on homeowners. 'It's a little bit of a punch in the face to all these taxing districts,' Jamison said. 'No special privileges. But it's not a bloody nose, it's just a bruise.' The committee unanimously agreed to move the legislation to the Senate floor, though some told the lawmaker they didn't believe it would provide enough relief and voted in favor simply to keep the conversation alive. The Senate deferred its debate on the bill to Monday. The governor's bill would be more like a bloody nose to some of the local governments, Jamison told South Dakota Searchlight. That's because the plan could be particularly problematic for high-growth cities, counties and school districts, such as the Sioux Falls metro and the Black Hills areas, by holding down one of the levers that raises tax revenue. Rhoden's bill would limit annual growth based on new construction and home improvements to 2% and apply the same limit to school capital outlay funds. Schools use their capital outlay funds for land, buildings and equipment. School districts with high growth wouldn't be able to take care of their infrastructure needs to accommodate the growing population of students, said Heath Larson, executive director of Associated School Boards of South Dakota, in an interview with South Dakota Searchlight. Rhoden unveils plan to slow property tax increases for five years Lobbyists and officials for cities and counties oppose the bill because it would cut high-growth local government revenues by millions of dollars within a few years and would result in reduced services, they testified. The plan could shift the property tax burden from homeowners onto agricultural and commercial properties in areas of high growth, said State Department of Revenue Secretary Michael Houdyshell. That's if the value of a county's owner-occupied homes exceed the 3% assessment growth cap set by Rhoden's legislation. But Houdyshell called the proposal the most 'politically possible' of the three options, despite concerns raised. He added that it's 'not perfect policy.' 'This is a feasible path forward that accomplishes a lot of goals we set out to accomplish,' Houdyshell testified. 'It's not an earth-shattering change to the taxes folks are going to pay, but it does provide relief and I think that's the goal the governor is trying to accomplish with this bill.' If Jamison's and Rhoden's proposals both pass, Jamison equated the limitations to counties to a broken neck. Or 'if not a broken neck, a bent one.' Rhoden called the analogy a 'gross overstatement,' saying it won't hamstring counties 'in any form, shape or fashion.' He believes the two bills could complement each other if passed, though he didn't support a proposal to merge them into one package. The House State Affairs Committee endorsed the governor's legislation in a 9-4 vote. The House of Representatives deferred debate on the proposal until Monday. If a lawmaker can earn a trophy for the most opponents to a bill, Hulse joked during Senate Bill 191's committee hearing Wednesday night, then she's likely to take home that honor this session. Senate Bill 191 would roll back owner-occupied residential property valuations to 2020 assessments for those who bought a property prior to November of that year. For those who bought a property after that, the valuation would roll back to the assessment at the time of the purchase. In both cases, future annual valuation increases would be capped at 3% until the property is sold, transferred or significantly renovated. Of the dozen opponents to speak against the bill, the Department of Revenue's Wendy Semmler was the most vehemently opposed. The rollback would remove $16 billion from the assessment rolls, Semmler said, leading to a $42 million loss in local funding for schools. That $42 million would then be the responsibility of the state to make up. Other opponents stressed it would hurt county budgets and could jeopardize South Dakota's AAA bond rating. Semmler said proposed changes to the bill wouldn't help. 'My opposition is that Senate Bill 191 is bad policy and amending it at this stage of the game doesn't save it,' Semmler said. But Hulse believes it's worth attempting to shake up the current property tax system. 'Right now I think our system as it stands is inequitable because you're sitting in your home, you've done nothing to your home, and you're being taxed more,' Hulse said. 'In what other situation do you do nothing and get taxed more? The bill passed out of House State Affairs with a 7-6 vote and is expected to be debated on the House floor Monday. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
08-03-2025
- Business
- Yahoo
Property tax relief plans loom over final days of SD legislative session
A January 2025 view of the South Dakota State Capitol in Pierre. (Makenzie Huber/South Dakota Searchlight) South Dakota lawmakers have four days left to agree on a property tax relief plan. There are three bills left on the table: House Bill 1235 from Rep. Greg Jamison, R-Sioux Falls, caps local governments' inflationary property tax collection growth at a lower amount year over year. Senate Bill 191 from Sen. Amber Hulse, R-Hot Springs, rolls back assessments for some homeowners and caps assessment growth for all of them. Senate Bill 216 from Gov. Larry Rhoden caps countywide residential assessment growth for five years, caps the amount local governments can increase tax collections based on new construction and growth, exempts some home improvements from affecting assessments, and expands eligibility among disabled and elderly people for relief programs. Legislative tone shifts from helping counties to blaming their spending Legislators – including many who campaigned on the issue – must determine which bill or bills will make it to the governor's desk. They went home Thursday evening for a long weekend and will return Monday to Pierre for the final four days of the legislative session, except for a day in late March to consider the governor's vetoes. 'The best measure with the most relief should make it through,' said House Majority Leader Scott Odenbach, R-Spearfish. Lawmakers are responding to public calls for relief, largely from non-agricultural property owners. Since 2017, property tax payments have gone up 47% for owner-occupied homes and 36% for commercial property, while rising 3% for agricultural property. Ag land taxes have been held in check by a change from market-based to productivity-based assessments. All three bills are expected to be debated on Monday. Meanwhile, the Legislature passed a resolution Thursday to ensure the body will dig deeper into property tax policies. That bill creates an interim task force to 'identify impactful, substantive measures' to provide significant and lasting tax relief. The task force will include 16 lawmakers, a representative from the Bureau of Finance and Management, and a representative from the Governor's Office. Senate President Pro Tempore Chris Karr, R-Sioux Falls, said property tax reform is 'one of the most important priorities' of the legislative session. 'We need to take a look at the whole picture of what's happening,' Karr told lawmakers, 'what forces are driving the property taxes to increase and what some of the mechanisms are that we can look at and consider to provide relief.' Jamison's House Bill 1235 would reduce local taxing districts' annual inflationary budget growth from a 3% cap to a 2.5% cap. In both cases, the inflation rate becomes the cap if it's lower than either percentage. The majority of property taxes — 56% — goes toward public school funding. Around 13% goes to cities, 27% goes to counties and the rest goes to various local entities, according to the state Department of Revenue. The state does not receive property taxes, relying instead on sales taxes. Yvonne Taylor, representing the South Dakota Municipal League, told lawmakers earlier this week that Jamison's legislation is 'much more survivable' for city budgets than the other bills proposed. Counties and schools affected by the legislation, lobbyists said, would face more difficulties to meet obligations without seeking 'opt outs' to generate more taxes. An opt out is a decision by a local governing body to exceed the cap on annual property tax collection growth. Jamison told lawmakers on the Senate Taxation Committee that the legislation would not provide as much property tax relief 'as you want, or the people that I represent want.' But it's enough to send a message to local governments, according to Jamison, that they need to reevaluate their budgets and address the burden on homeowners. 'It's a little bit of a punch in the face to all these taxing districts,' Jamison said. 'No special privileges. But it's not a bloody nose, it's just a bruise.' The committee unanimously agreed to move the legislation to the Senate floor, though some told the lawmaker they didn't believe it would provide enough relief and voted in favor simply to keep the conversation alive. The Senate deferred its debate on the bill to Monday. The governor's bill would be more like a bloody nose to some of the local governments, Jamison told South Dakota Searchlight. That's because the plan could be particularly problematic for high-growth cities, counties and school districts, such as the Sioux Falls metro and the Black Hills areas, by holding down one of the levers that raises tax revenue. Rhoden's bill would limit annual growth based on new construction and home improvements to 2% and apply the same limit to school capital outlay funds. Schools use their capital outlay funds for land, buildings and equipment. School districts with high growth wouldn't be able to take care of their infrastructure needs to accommodate the growing population of students, said Heath Larson, executive director of Associated School Boards of South Dakota, in an interview with South Dakota Searchlight. Rhoden unveils plan to slow property tax increases for five years Lobbyists and officials for cities and counties oppose the bill because it would cut high-growth local government revenues by millions of dollars within a few years and would result in reduced services, they testified. The plan could shift the property tax burden from homeowners onto agricultural and commercial properties in areas of high growth, said State Department of Revenue Secretary Michael Houdyshell. That's if the value of a county's owner-occupied homes exceed the 3% assessment growth cap set by Rhoden's legislation. But Houdyshell called the proposal the most 'politically possible' of the three options, despite concerns raised. He added that it's 'not perfect policy.' 'This is a feasible path forward that accomplishes a lot of goals we set out to accomplish,' Houdyshell testified. 'It's not an earth-shattering change to the taxes folks are going to pay, but it does provide relief and I think that's the goal the governor is trying to accomplish with this bill.' If Jamison's and Rhoden's proposals both pass, Jamison equated the limitations to counties to a broken neck. Or 'if not a broken neck, a bent one.' Rhoden called the analogy a 'gross overstatement,' saying it won't hamstring counties 'in any form, shape or fashion.' He believes the two bills could complement each other if passed, though he didn't support a proposal to merge them into one package. The House State Affairs Committee endorsed the governor's legislation in a 9-4 vote. The House of Representatives deferred debate on the proposal until Monday. If a lawmaker can earn a trophy for the most opponents to a bill, Hulse joked during Senate Bill 191's committee hearing Wednesday night, then she's likely to take home that honor this session. Senate Bill 191 would roll back owner-occupied residential property valuations to 2020 assessments for those who bought a property prior to November of that year. For those who bought a property after that, the valuation would roll back to the assessment at the time of the purchase. In both cases, future annual valuation increases would be capped at 3% until the property is sold, transferred or significantly renovated. Of the dozen opponents to speak against the bill, the Department of Revenue's Wendy Semmler was the most vehemently opposed. The rollback would remove $16 billion from the assessment rolls, Semmler said, leading to a $42 million loss in local funding for schools. That $42 million would then be the responsibility of the state to make up. Other opponents stressed it would hurt county budgets and could jeopardize South Dakota's AAA bond rating. Semmler said proposed changes to the bill wouldn't help. 'My opposition is that Senate Bill 191 is bad policy and amending it at this stage of the game doesn't save it,' Semmler said. But Hulse believes it's worth attempting to shake up the current property tax system. 'Right now I think our system as it stands is inequitable because you're sitting in your home, you've done nothing to your home, and you're being taxed more,' Hulse said. 'In what other situation do you do nothing and get taxed more? The bill passed out of House State Affairs with a 7-6 vote and is expected to be debated on the House floor Monday. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
07-03-2025
- Business
- Yahoo
Senate agrees with House that tax study is needed
PIERRE, S.D. (KELO) — Sharply rising property values in some fast-growing areas of South Dakota have become the top problem for many state legislators and the governor, too. That's why they're spending the closing days of the 2025 legislative session considering possible ways to provide short-term relief, while at the same time getting ready to take a deeper look for a lasting solution. State senators on Thursday voted 34-0 to conduct a comprehensive review of South Dakota's property tax policies. The House of Representatives had adopted the resolution 64-6 last month. It calls for the Legislature's Executive Board to appoint a group of 16 legislators, who along with two members of Gov. Larry Rhoden's administration, will attempt to 'identify impactful, substantive measures to provide significant and lasting tax relief for the homeowners of this state.' The measure's prime sponsor, House Speaker Jon Hansen, and its lead Senate sponsor, Republican Chris Karr, serve as the Executive Board's chair and vice chair. Karr's remarks Thursday acknowledged there are shorter-term steps still being considered. The study would look beyond them. 'There's more work to be completed,' he said. Democratic Sen. Jamie Smith, a co-sponsor of the resolution, said that the sales tax should be studied, too. He compared the property-tax problem to an arcade game that can't be won. 'We play Whack-a-mole with it all the time,' Smith said. Republican Sen. John Carley urged the study panel to study agriculture property and commercial property in addition to owner-occupied. Carley also said the panel should consider ways to reduce spending. The Legislature meanwhile is scheduled look at three property-tax measures on Monday, the final day for legislation to clear its second chamber. The Senate will consider House Bill 1235, sponsored by Republican Rep. Greg Jamison. It proposes to allow local taxing districts including public school boards to raise the property-tax funded parts of their budgets by no more than 2.5% a year. State law currently says 3%. The House will consider Senate Bill 216, the product of work by the Rhoden administration and a 10-legislator working group. It would limit all counties' assessments on owner-occupied homes to increase by no more than 3% a year for taxes payable in 2027 through 2031. SB 216 would also place a 2% annual limit on additional tax revenue generated from improvements or other changes — and only if those increased the property's value by more than 40%. The third leg of SB 216 calls for increasing the income thresholds for people age 65 and older to qualify for assessment freezes on owner-occupied homes. A single person could have household income up to $55,000 and a multi-person household up to $65,000; those upper thresholds currently are $35,000 and $45,000. Rhoden, responding to a question from KELOLAND News, said at his weekly news conference on Thursday that he had been approached about folding Jamison's 2.5% growth limit into the proposal from the governor and legislators group. He said the offer came too late in the process. But, he noted, the two measures would be compatible if both win approval. The House also will consider Senate Bill 191. Its prime sponsor is Republican Sen. Amber Hulse, while Republican Rep. Jack Kolbeck is lead House sponsor. It calls for rolling owner-occupied assessments back to 2021 levels for people who have lived in their homes at least that long, while owner-occupied properties purchased after 2021 would be assessed at the fair-market value at the time of purchase. The Hulse-Kolbeck bill came out of the Senate on a 35-0 vote, but it barely survived the House State Affairs Committee hearing Wednesday night 7-6. Wendy Semmler, director for the property tax division in the state Department of Revenue, said the rollback would wipe out $16 billion of assessed value. SB 191 was amended in the House committee at its sponsors' request, so that only owner-occupied property would be responsible for generating enough tax revenue to offset that $16 billion difference. Semmler said that tax levies to make up the difference would have to be higher and would hit harder those homeowners who bought their properties after 2021. All of South Dakota's agricultural groups testified against SB 191 on Wednesday, as did business groups, county commissioners, municipalities, towns and townships, several county directors of equalization and a representative of a business that assists local governments with debt service and helped state government gain its current AAA bond rating. Hulse said people who have been in their homes for some time would benefit while newer owners would pay more. Hansen asked for clarity: So the intent is not to decrease the revenue? 'That is the intent,' Hulse said. Despite the parade of opponents, Republican Rep. Spencer Gosch called for SB 191 to go down to the House floor. 'You got four days,' Gosch told her. 'You'll have the weekend to work with some of the opponents and maybe pull a rabbit out of the hat.' Republican Rep. Marty Overweg, an agricultural businessman and farmer, said he couldn't vote for the governor-legislators plan or Hulse-Kolbeck plan. He doesn't trust that providing owner-occupied relief won't put a heavier tax burden on agricultural property. 'I think it's dangerous. I really do think it's dangerous. You want corporate farming in South Dakota, just let taxes go crazy on the property,' Overweg said. The House committee's chair, Republican Rep. Scott Odenbach, on the other hand voted to send both of them out. scared that ag will bear the burden. 'I hope one of these measures, the best measure for relief, can make it out of the House,' he said. Rhoden on Thursday pointed out another hurdle that the Hulse-Kolbeck plan would need to clear. The Legislature sets statewide tax levies for K-12 school districts as part of providing state aid to the districts. School districts as a whole are the largest recipients of property taxes in South Dakota. Rhoden said school levies have gone down almost every year because property values as a whole have risen. Having to raise the school levies would require a two-thirds majority vote, and Rhoden sounded doubtful that the Legislature would want to do that right now. He's raised the question with some lawmakers. 'I've asked them what do you think the chances of getting two-thirds of the legislators in both chambers to pass a bill, a two-thirds majority vote bill that increases property tax statewide on all classes of property. That would give the indication of where I stand on Senate Bill 191,' Rhoden said. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
21-02-2025
- Business
- Yahoo
Governor's property-assessments bill limps out
PIERRE, S.D. (KELO) — Public school districts joined county commissions and municipal governments on Thursday in carefully expressing 'soft opposition' to property-assessment legislation that South Dakota Gov. Larry Rhoden and some state lawmakers are attempting. Senate Bill 216 would cap growth at 3% countywide on owner-occupied property assessments and cap increases in property tax-funded local budgets to 2% of new growth. The legislation would cover property taxes payable in 2027 through 2031. Despite the string of opponents, a twice-amended version of SB 216 emerged from the Senate State Affairs Committee. The 8-1 vote came after state Revenue Secretary Mike Houdyshell said he would see what might be done about accommodating school districts, such as Tea and Harrisburg, and counties such as Lincoln and Minnehaha; all of which are experiencing population growth and the pains that go with it. 'This bill has a lot of merit to stabilize the situation for the next five years, while we look under the hood of these formulas we have for school districts and for counties and work for solutions,' said Republican Sen. Randy Deibert, a former Lawrence County Commission member who helped develop the proposal. 'Also, we've heard from the bill sponsors we're willing to work with these people that have soft concerns, and I think that will move forward with the testimony we had today.' Restyle your wardrobe, support EmBe programs Deibert said other property-assessments legislation under consideration this session will rise and fall on their own merits regardless of what happens with SB 216. 'So this bill will stabilize the situation so we can find some real relief,' he said. Secretary Houdyshell described the proposal as a 'rifle shot.' Bur Republican Sen. Chris Karr saw it differently. 'I have real concerns, based on that soft opposition,' Karr said. There would be shifts of tax burden from owner-occupied property to agricultural and commercial property, he said. He noted that Lincoln County is 'pretty close' to Minnehaha County — the city of Sioux Falls spans both — and while he lives in the portion of Sioux Falls that's in Minnehaha County, he cares about the proposal's effects on Lincoln County, too. He explained why. 'It's going to be more costly to live in Lincoln. and that does impact Minnehaha, because now more folks are going to be wanting to buy up houses in Minnehaha, driving up prices, et cetera,' Karr said. 'So you know it is a real concern.' He continued, 'I think there are a lot of concerns in here. I'm not sure they can all be addressed in time for this to be fixed.' He was referring to the Legislature already being in day 24 of the 38-day session. 'I don't know if there's going to be a real effort to try to address and fix some of these things. So those are real concerns, not soft concerns.' Republican Sen. Sue Peterson said she was honored to be part of the task force that came up with the proposal. 'And what Governor Rhoden said was this particular piece of legislation, we're playing the long game,' Peterson said. 'If we keep that in mind, that we need long-term reform and short-term relief, so we can start with this piece, but we need to keep going and we need to find ways to provide relief for those who already they have too high of an assessed value, based on the real value of their house, which means their taxes are way too high. 'It's not anything they banked on when they bought their house,' she continued, 'and we are seeing people that are going to be taxed out of their house, so we've got to find some short-term relief.' Republican Sen. Jim Mehlhaff chairs the committee. 'The discussion on property tax relief is probably one of the most confounding issues that you can come up, because generally all you can ever do is rob Peter to pay Paul, and Peter is not usually happy with the proposals. That's what's coming up here,' Mehlhaff said. 'But I do think this bill is an effort to stop the bleeding in areas of the state which have been disproportionately affected by some of the increases in owner-occupied housing values,' Mehlhaff continued. 'Certainly this is not the end of the discussion, and I think the secretary has indicated a willingness to continue to work with the stakeholders involved and to continue to work on the problem. 'And I think as a Legislature we should be looking at areas, not necessarily just property tax reform but just how we fund government at all levels, and take a look at doing some reforms there that might need to be addressed that hasn't been done since statehood,' he said. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
