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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
06-03-2025
- Business
- Yahoo
Lawmakers face big votes over property tax growth
PIERRE, S.D. (KELO) — With five working days left in the main run of the 2025 legislative session, it's coming down to crunch time at the state Capitol to find a way to slow the growth of property taxes on owner-occupied residences in South Dakota. State senators on Thursday afternoon could vote on a plan from Republican Rep. Greg Jamison plan to further restrict spending by local governments. Meanwhile the House of Representatives on Thursday afternoon is scheduled to debate a package from Gov. Larry Rhoden and a task force of 10 lawmakers. Senate Bill 216 would cap assessment growth countywide at and limit spending growth, while also expanding financial limits for people aged 65 and older to have assessments frozen on their owner-occupied homes. Then there's also a proposal that the House will take up Monday from Republican Sen. Amber Hulse and Republican Rep. Jack Kolbeck, who want to roll back many owner-occupied assessments to 2021 levels — and do it without causing a tax shift to agriculture or commercial properties. Jamison's approach, House Bill 1235, would reduce the amount of property taxes that a taxing district — including school districts — can collect to 2.5% per year. Currently state law limits the increase to no more than 3%. The House voted 39-31 to send Jamison's plan to the Senate. On Wednesday, it received the endorsement of the Senate Taxation Committee 6-0, despite opposition from lobbyists for the South Dakota Municipal League, the South Dakota Association of County Commissioners and the Associated School Boards of South Dakota. The Rhoden-task force proposal, Senate Bill 216, rolled through the Senate a week ago 30-5 and came out of the House State Affairs Committee on Wednesday night 9-4. One section limits assessment growth on owner-occupied property for the county as a whole to no more than 3% annually for the next five years, with an exception for new construction. Another section of SB 216 caps spending growth to no more than 3% annually but allows for an additional 2% for any new construction or changes in circumstances. It also would give all school districts authority for capital outlay levies. The final sections of SB 216 expand eligibility for people ages 65 and up to qualify for assessment freezes. The current household income limits of $35,000 for single-person households and $45,000 for multi-person households would increase to $55,000 and $65,000. The upper limit for a home's assessed value also would rise to $500,000 from the current $300,000. The Hulse-Kolbeck proposal, Senate Bill 191, proposes to roll back owner-occupied homes to 2021 assessment levels for people who have been living in the same homes since then. Owner-occupied properties that have changed hands or circumstances since then would be assessed at fair-market value. Wendy Semmler, director for the state Property Tax Division in the state Department of Revenue, said the result of SB 191 would be a $16 billion reduction in taxable value of owner-occupied property. Semmler said that tax levies would have to be increased to make up the difference and those higher levies would hit harder on people who didn't own their current residences prior to 2021. SB 191 came out of the Senate 35-0 but barely got out of the House State Affairs Committee 7-6 Wednesday night. In addition to Revenue being against it, opposition also came from South Dakota Retailers, South Dakota Chamber of Commerce and Industry, several county directors of equalization, South Dakota Farm Bureau and every other South Dakota agricultural group, South Dakota Association of County Commissioners, South Dakota Towns and Townships and a company official from a financial services firm that advises many local governments on debt issues, who warned it could endanger state government's AAA bond rating. 'You got four days,' Republican Rep. Spencer Gosch told Hulse. '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, voted against both the governor-task force bill and the Hulse-Kolbeck bill because he doesn't trust either one won't push tax burden onto agricultural property. 'I think it's dangerous. I really do think it's dangerous,' Overweg said. 'You want corporate farming in South Dakota, just let taxes go crazy on the property.' On the other hand the committee's chair, Republican Rep. Scott Odenbach, voted for both. 'I hope one of these measures, the best measure for relief, can make it out of the House,' he 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
Property tax tinkering continues as SD lawmakers advance ideas to rival, complement governor's plan
A January 2025 view of the South Dakota State Capitol in Pierre. (Makenzie Huber/South Dakota Searchlight) South Dakota lawmakers whittled down options for property tax relief legislation Friday at the Capitol in Pierre by moving two more solutions forward and rejecting others. One of the endorsed bills would lower a cap on local governments' annual increases in property tax collections. The other would roll back assessments on owner-occupied homes and commercial properties and cap their increases. Of five tax bills up for consideration Friday in the House State Affairs Committee, Sioux Falls Republican Greg Jamison's House Bill 1235 was the only one to make it through to the House. The bill would lower limits on local governments' annual increases in property tax collections — for schools, counties, cities and others — from 3% to 2.5%, which could force local governments to make cuts and lower property tax burdens for all types of properties, Jamison said. If the local government decides the funding isn't enough, its citizens could vote for an opt out to raise taxes beyond the growth limit, he added. 'The intent of this bill is to send a message to those taxing districts that we've had enough,' Jamison said. 'We need to change. We need something different.' Wendy Semmler, property tax director for the state Department of Revenue, said that if Jamison's bill and Gov. Larry Rhoden's proposed property tax legislation both pass the Legislature and are signed into law, local government budgets would 'be hit with a double whammy.' Rhoden's bill includes provisions to cap the growth in countywide home values for five years, trim the amount of revenue counties and schools could collect based on new construction, and expand eligibility for a property tax freeze program benefiting elderly and disabled people. Semmler also had concerns that the Jamison bill's inclusion of school districts would circumvent the state aid education funding formula. Jamison told lawmakers he'd be willing to talk with the Governor's Office to find a solution. Governor's property tax plan gets endorsement, but not cheers Semmler urged lawmakers to support the governor's 'comprehensive' plan instead of 'piecemeal' legislation. Dan Klimisch, president of the South Dakota Association of County Commissioners and a Yankton County commissioner, told lawmakers the legislation would lead to cuts in services that aren't required by the state. 'What is going to happen is we're just going to end up cutting roads, bridges and infrastructure,' Klimisch said. 'That's our biggest funding part: our highway department.' Lawmakers on the committee endorsed the bill with a 9-3 vote. Assistant House Majority Leader Marty Overweg, R-New Holland, said the legislation was the first property tax bill 'that makes total sense' to him. 'It taxes everybody. It hurts everybody a little bit. But it also helps everybody a little bit,' Overweg said. 'There's no carve-out for anybody. Straight across-the-board cuts, straight across-the-board hurts.' The legislation will head to the House next. Bills defeated in the House State Affairs Committee would have created new taxes on advertising in the state, taxed pharmaceutical advertisements, limited annual valuation increases on some properties, and limited property tax increases on owner-occupied properties. In the Senate Taxation Committee on Friday, two bills introduced by Rep. Amber Hulse, R-Hot Springs, passed out of committee. Senate Bill 169 would require local governments to put an extra notice in a newspaper or on their website if they plan to consider an opt out to raise property taxes beyond limits in state law. It passed the House unanimously. Senate Bill 191 would roll back owner-occupied residential and commercial 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 fair market value 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. It would allow homeowners to renovate or improve their home without triggering an assessment increase, as long as the improvements are less than 40% of the home's current value — similar to a provision in Rhoden's bill. Hulse and other proponents said the legislation would protect homeowners from unexpected property tax hikes, allow them to budget better, and stay longer in their homes. Clark Verhulst, a Spearfish resident, told lawmakers he prefers Hulse's bill over the governor's because his home's current property tax bill is $9,100, which isn't sustainable for him. Prior to 2020, he was able to afford to live in his home. 'It's totally out of whack the way it is right now,' Verhulst said. A similar bill was introduced last year but was rejected because of constitutionality concerns surrounding uniformity within property tax classes. If the legislation passes, South Dakota courts will 'scrutinize' whether it treats similar properties within the same class differently, said South Dakota Department of Revenue Secretary Michael Houdyshell. 'My comment last year was based on the fact that that proposal, which is similar to this one, creates non-uniformity of taxation within the same class of property which is owner-occupied,' Houdyshell said. 'Now we're adding non-agricultural property to the mix as well based on a point in time when the property is purchased.' Semmler, of the Department of Revenue, said the bill would result in $31 billion of taxable value being 'wiped off the books.' That would impact local government funding and $114 million in 'local effort' education funding. The state would have to make up that $114 million to fund public schools, Semmler said, or increase maximum levies, which would impact agricultural properties. Representatives of the South Dakota Farm Bureau, South Dakota Retailers Association and the South Dakota Association of Assessing Officers also opposed the bill. 'We don't see the solution to property tax relief as an assessment cap,' said Cori Kaufmann, with the assessor's association. SB 191 passed unanimously out of the Senate Taxation Committee, with an expectation that Hulse would work with opponents to address some of their concerns. Two bills that failed in the committee would lower property taxes while increasing sales taxes and freeze property tax revenues and assessments for two years. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
