One of the biggest battles in state finances in recent memory has been what to do with the state property tax.
An interim legislative task force was created to examine the issue. At its latest meeting, the group established a goal of cutting owner-occupied property taxes by 50 percent.
From roads to schools, taxes help ensure that South Dakota can function. However, there is a significant contingent of property owners upset with the current tax rate.
Senate Pro Tem Chris Karr, a Sioux Falls area Republican, is a member of the legislative work group. He said relief is top of the group’s mind.
“If this was an easy thing, it would have happened many times over, over the last several decades regarding property tax relief," Karr said. "I think, moving forward, we need some direction, some goals, some focus. The other thing I’m going to say, is like a lot of areas, I don’t believe that there’s going to be a silver bullet.”
At the same time, Republican majority leader Sen. Jim Mehlhaff of Pierre acknowledged there are a lot of ingredients in the property tax cake to consider.
“It’s to provide meaningful property tax relief, number one, number two, hopefully bring the goal of homeownership – make that more attainable," Mehlhaff said. "I think the most volatile comes from the education portion of it. I’m not looking to reform education funding, I’m looking to lower property taxes.”
Despite this, property tax relief will come at a different cost. Highlighted in public testimony, police departments, schools, and infrastructure could bear the brunt of any cuts.
Citing an American Society of Civil Engineers report, Harrisburg city administrator and civil engineer Heath VonEye urged caution.
“Driving on roads in need of repair in South Dakota costs each drive approximately $562 per year," VonEye said. "Seventeen percent of the bridges in South Dakota are rated as structurally deficient. It does still come at a cost to those coffers at a local level. I just would close with appreciation, and really just ask any decisions coming from this committee, and hopefully eventually coming from the legislative level, not to be made with a knee-jerk reaction.”
Some lawmakers on the task force expressed skepticism over achieving a 50 percent cut — especially exclusive through cuts and not raising other taxes.
Among those expressing doubts is Gov. Larry Rhoden, who was asked about the 50 percent cut goal Thursday. He said he can’t square this proposal.
“It makes me curious when they throw out those kinds of numbers," Rhoden said. "I’m curious whether they really understand what they’re proposing. For those same legislators, a few months later, to say they’re going to find something like $350 million in cuts or a need for additional revenue from another source – I’m very curious to see where that comes from.”
This comes after the legislature was unable to enact proposed cuts from the governor totaling roughly $80 million in the last session.
Correction: An earlier version of this story credited a report to the American Public Works Association; the report was created by the American Society of Civil Engineers.