Sioux Falls Mayor Paul TenHaken says the city is planning to reduce $8-10 million of funding in the city’s budget.
He said the root cause is a property tax relief bill the state Legislature passed this year.
“Bills like SB 216 are really meant to stifle growth and limit growth," said TenHaken, referring to a new law that, among other things, limits the increase in certain property tax revenues.
In South Dakota, the state receives no money from property taxes. All property tax funding goes to counties, cities, schools and other local government entities.
He said the city wasn’t involved in the property tax bill discussion.
“They can just cut it, be the heroes to their constituents, but then we’re left holding the bag. It’s just not fair," TenHaken said. "We need to be at the table in those discussions, because it affects us. It affects school boards. It affects county commissions. But we’re not at the table in the discussions.”
After outcry across the state over rising property taxes, legislators passed the law to help manage some property tax growth during the 100th Legislative Session. A summer study aimed at lowering it even further, announced a goal to reduce property taxes by 50% this upcoming session.
Though the effects of SB 216 don’t officially hit until 2027, TenHaken said if the city doesn’t take care of it now, more pain would come later.
“There’s no solutions, only tradeoffs. So, the tradeoff that we have today is that property tax reduction or elimination, if we don’t have a replacement for that lost revenue in some way, it leads to a reduction in city services," TenHaken said. "And so, when some of these get made public and my email box starts blowing up and my twitter feed starts getting lit up, about Paul hates pool, Paul hates libraries. I need you to contact your legislators, and I need you to see how they voted on some of these things and talk to them.”
Some of the cuts he’s proposing are eliminating four staff positions, reducing overtime, shortening libraries by two hours and closing pools in the city after the first weekend in August. It also includes school-based clinics that were only serving 5% of children.
He added that maybe some of the cuts could have happened before and would’ve been more efficient in the city’s dollars. Yet, he said there will be pushback.
“Some of these things people are gonna be pissed about. We’re bonding for a $20 million outdoor pool at Kuehn Park and now we’re saying we’re gonna close it the first week in August? That’s just tough. That’s just tough for me to stand up here and say that that’s a good idea," TenHaken said. "I hate saying that. I hate implementing a lot of these. Tomorrow, I have a meeting with all those providers at those school-based clinics and I have to look at them face-to-face and say, ‘Your clinics are closing.’”
The proposed cuts are only from the mayor’s office and still need Sioux Falls City Council approval.
