When it comes to discussion over how to address rising property taxes, a philosophical discussion at the heart of state politics came into play.
Skepticism around economic development is creeping into South Dakota.
As the governor’s office continues to say the state is “Open for Opportunity,” some have questioned if the state as a whole should adopt that model.
Following the passage of HB 1052, a bill banning eminent domain for carbon pipelines, SDPB reported on some institutions questioning South Dakota’s business stance. While the future of some major projects remains to be seen, legislators are continuing to question if favoring state-backed economic development is actually a profitable model.
Sen. Taffy Howard is on the legislative property tax relief task force. At the group’s latest meeting, she said there’s a “dichotomy between the smaller towns and the larger towns.”
“For some people, I know the term ‘economic development’ is a four-letter word. And I don’t mean that in a good way. You see that in the larger towns, and yet you never see a benefit from it. You only see a downside if you’re the average citizen, just the average hard-working taxpaying citizen," Howard said. "You see more traffic. You see more crime. You see your taxes go up. So, I need the smaller town folks to understand that there is this dichotomy between larger and smaller towns.”
Rep. Scott Odenbach said he has similar reservations about Tax Increment Financing, or TIF, districts. Those districts use property taxes to fund specific projects and drive economic development. Odenbach said it’s time to weigh the benefits of TIFs and economic development.
“What we have to take a look at the situation we see over and over is the places with the highest growth, also have shown to have the need for the greatest amount of taxes taken from the people in those areas," Odenbach said. "So, you have to question the model itself or say if we’re going to incentivize growth as a government entity that represents the people who live there it needs to be able to pay for itself or we have to change the model of taxation, so they’re not taxed out of their house when they live in the high-growth areas.”
On the other hand, Watertown Sen. Glen Vilhauer said he thinks economic development should be in these equations.
“Why are we so scared of economic development in this state? I’m not opposed to looking at how we can save taxes, cut spending, but economic development is such a driver for so many reasons," Vilhauer said. "I look at our local town of Watertown and what economic development has done in our area. We’re short-changing ourself by not taking a more serious look at our options here in South Dakota.”
In a recent CNBC study, the state ranked second in the nation for business friendliness.
