By Todd Epp, SDBA
PIERRE, S.D. (SDBA) — Gov. Larry Rhoden outlined his approach to property tax relief Thursday after signing Senate Bill 216.
He said the measure is “a huge win for South Dakota homeowners” and promised more substantial relief in the future.
Rhoden explained that his administration is developing a property tax relief proposal to present to the legislative task force created during the 100th legislative session.
“We need to deliver meaningful property tax relief and actual property tax cuts for South Dakotans, and we need to find a way to do it without making the state or counties or school districts go broke,” Rhoden said.
The governor provided a primer on South Dakota’s property tax system, emphasizing that no property tax dollars go to the state government.
“Zero dollars and zero cents of property tax go to the state,” Rhoden said. “State government does not collect a penny in taxes.”
Rhoden recalled a conversation with a business leader who was unfamiliar with this fact.
“I was talking to a fellow, he was the president of one of the major trade organizations in South Dakota, and he was talking about the issues of property tax,” Rhoden said. “I asked him that and he made a guess. I said look zero dollars. Nothing goes to the state.”
Rhoden added that the business leader referred to a certain animal waste in response.
Rhoden explained that more than half of property tax revenue funds schools, with counties receiving 27 percent and cities 13 percent.
The governor outlined three primary ways to reduce property taxes: cutting spending on schools or local services, shifting the burden to another property class, or locating alternative funding sources.
Rhoden said his forthcoming plan would focus on the third option.
“It would be the third option to find an alternative funding source and something that’s viable, something that goes to the heart of the need in the areas,” Rhoden said.
When asked about the timeline for revealing his property tax plan, Rhoden said it would be “days, not weeks” before announcing details.
Rhoden wants to offer counties options under his proposal rather than a statewide mandate.
“I think we want to present a bill that gives individual counties options, and that’s what’s important,” Rhoden said. “If you believe in local control and especially if you can come up with a concept and then lay it out for people as an option.”
The legislature’s property tax task force will work on the issue throughout the summer.