A legislative leadership committee is greenlighting a report for a proposed property tax cut.
The proposal will likely come up during the 2023 legislative session.
Republican Representative Trish Ladner chaired the committee looking at the state’s property tax structure.
She calls the bill a ‘bottom-up tax cut.’
“Because it would exempt the first $100,000 in valuation from taxing,” Ladner said. “Rather than a proportional cut, South Dakotans with smaller home value will get a bigger percentage tax cut from this mechanism.”
That means a home valued at $200,000 would see the tax valuation cut in half.
It’s unclear how much the property tax cut will be. Ladner says a cost estimate for the proposal is still getting created.
The proposal could create tension with Governor Kristi Noem’s sales tax cut on food she proposed during the 2022 campaign. There might not be enough funding to cover both and increased costs facing the state.
Noem estimates that would save taxpayers $100 million dollars annually.
But the state is facing increased costs in the next several years. From funding new prisons to inflation raising the costs of approved infrastructure projects. The state also has a nursing home crisis and lawmakers expect Medicaid costs to increase in the coming years. Average teacher salary ranks 50th in the country, despite a 2016 sales tax increase to lose that designation.
Lawmakers will hear the governor’s proposed budget during an address to the legislature on Dec. 6.
