Lincoln County residents showed up to a town hall to voice their disapproval on property tax increases. The issue is one much of the state is tackling right now.
One county commissioner put together a series of town halls to bring all the stakeholders — citizens, local government officials and state legislators — together and open a line of communication.
Lincoln County Commissioner Joel Arends held the first town hall in Harrisburg Monday night. He said the event gets at the heart of the issue.
“There hasn’t been enough progress on the property tax issue statewide. I think Lincoln County, and especially Harrisburg, is ground zero for the property tax issue statewide,” Arends said. “Lincoln County is the fastest growing county in the state, we’re 10th fastest growing county in the nation when adjusted for per capita growth, and so we’ve seen immense growth here. But what we haven’t seen is we haven’t seen the kind of tax relief though that people need to see.”
He also wanted to make the effort to clear up some misconceptions on the issue, namely that the state doesn’t get a dime of property taxes.
In Lincoln County, over $183 million was collected in property tax. Of that, $115 million went to schools, $33 million to cities, $21 million to the county, $2.6 million to townships and the remaining to other areas.
He added that Monday's meeting shows how people feel in the current climate.
“People are upset, and they’re very frustrated,” Arends said.
Frustrations Over Growth
One member of the audience who identified herself as Lacy said she’s owned a house in Harrisburg for a little over a decade.
“It seems crazy. I think we’ve had two to three assessments in the 10 years I’ve owned my house. I’m not using that equity; it’s sitting there,” she said. “It would make sense if I’d taken out a permit, or refinanced or was using that equity, but to just tax imagined market value is crazy.”
Lacy went on.
“It seems like we have opted in to, ‘Let’s have growth for the sake of growth,’” she said. “And then us residents are not able to pay for the new buildings and the new roads that we need and the new water that we don’t have, we’re at our water limits, but we keep building and building and building.”
She asked if there are discussions about slowing down the growth until the area can "keep up."
That’s a sentiment held around the state around growth. Rep. Aaron Aylward was the lone legislator in attendance, with some unable to make it due to the governor’s budget address in Pierre.
Aylward said he agreed with her, saying people like Gov. Larry Rhoden are critical of legislators that are "anti-economic development."
“He would lump me in that category, but I’m not anti-economic development. I just think we’re growing too fast. I think it does need to slow down a little bit,” Aylward said. “But I also understand the other side of it, where if you do have a situation where you are growing organically, and I’m not saying all of it is, but if you are, then you’ve got to make something work. And nothing’s going to be perfect.”
Aylward said that’s why people in government need to hear from the public who have those concerns, so elected officials can get the whole picture. He told SDPB following the town hall that’s a large reason why he came to the event, even though he needed to be in Pierre the next day for the budget address.
“It’s important just because over the last couple of years, two to three years, specifically owner-occupied property taxes has been a big issue. Since we’ve seen since COVID a lot of people have moved into South Dakota,” Aylward said. “The market rates for housing have been kind of out of whack. It’s a big issue east and West River, so I’m glad Commissioner Arends put this together so we can hear from the public, and they can hear where we’re coming from, and we can hear their concerns.”
Discussions over growth in the city of Harrisburg, Lincoln County and the Harrisburg School District dominated much of the Town Hall’s conversation.
Another man in the audience said he’s against the people wanting constant growth.
“We didn’t have 60% of our taxes going to schools before we had all this growth. If growth doesn’t pull its own weight, why would we grow? If growth doesn’t reduce my taxes, why would we grow?” He said. “We give all these companies all sorts of tax breaks and all sorts of benefits to come here, and we’re all paying for it.”
Others questioned if the schools are giving the taxpayer the most bang for their buck, noting failed ELA and mathematics metrics statewide discussed at a recent Legislative Government Operations and Audit Committee meeting.
Harrisburg School District Superintendent Jennifer Lowery invited anyone concerned about whether their money is providing a good education to come see the work done in the district.
“I would welcome you to come walk our elementaries, our middle schools and our high schools. I cannot be more proud of the work our teachers do and the work on phonics and mathematics,” Lowery said. “I think if you come walk with me, I can show you. And I can show you the assessment that the state requires us to give children.”
However, the conversation revolved around how growth was contributing to the increase of property taxes, and whether it is worth it. Some maintained that the growth has been positive, because it’s led to more amenities and opportunities for families.
“We’re not going to change. We’re not going to go backwards. Obviously, we have national chains coming to town, which is great for us. But we need to be not a bed-and-breakfast town. We need to be people working and living and staying here,” Pete Wodzinski, Vice President of the Harrisburg City Council, said. “And that’s only going to benefit everybody’s tax base going forward. You know, roads and bridges got to get built. Schools got to get built. I know it’s hard to say that, but as negative as things can be, sometimes coming together here and now as a society makes things a little more positive.”
He added that this is an opportunity to move forward together about growing strategically.
Commissioner Joel Arends said he believes the overarching issue is that the conversation has become too polarly politicized.
“There’s a middle ground to strike between this growth-at-all-costs crowd and between the no-growth crowd. And I think that’s the course that we’ve gotta chart for the future is we’ve gotta say to ourselves, ‘The growth doesn’t pay for itself. The property taxes keep going up,’” Arends said. “The growth-at-all-costs crowd wants more growth because they need it to pay for continuing infrastructure, and so I think we’ve got to bring things back to the middle. I think that’s where most people in Lincoln County are. They understand there’s a middle way, but they don’t see elected officials driving the middle way. It’s either all or nothing with folks on both sides.”
Arends said both models are broken.
Others said the state should be paying the share of education funding, and the property tax formula should be changed to include that.
“I mean to me, that’s the biggest shell game in the whole game is we’re paying 71% of our property taxes to schools? Something’s amiss here,” an audience member who identified himself as Bob said.
The idea is one of the legislative proposals expected to pop up during the 2026 Legislative Session.
The town hall looked at the roughly 20 legislative proposals on property tax reform passed by a group of legislators on a Comprehensive Property Tax Task Force this summer.
One concern is over a proposal to eliminate property taxes altogether and replace them with a transaction tax. Harrisburg Mayor Derick Wenck said that idea “scares” him.
“We’ve seen what’s happening over in Minnesota with their property taxes, and their property taxes are way higher than ours, and in Iowa. If we eliminate property taxes all throughout the whole state, I don’t think they’re going to have enough lumber in the lumber mills to build houses in this area.”
Wenck said he thinks people will start coming to live and work in the area to avoid paying both an income and property tax.
“We’re going to see an influx of people in South Dakota like we’ve never seen before, unfortunately, and it’s going to happen,” Wenck said.
Rep. Aaron Aylward is one of the decision makers who will be voting on those proposals. He said hearing from the stakeholders left him with two key takeaways: one from the citizens and the second from local governments.
“I would say most everybody doesn’t want to pay more in property taxes,” Aylward. “They realize there is an issue.”
He added that he hears the concerns from local government officials.
“Any government entity that’s affected by the property tax, mainly the schools and then the counties and some of the city stuff too, they’re cautious with any program that’s coming forward that might change the way they do things,” Aylward said. “I know a lot of those people don’t want to pay more property taxes, but they’re nervous about things going south.”
All the information and notes from the town halls are being gathered and then will be passed on to state legislators who are making decisions on the issue during session. In addition to legislative proposals, commissioner Arends offered more local opportunities to provide relief.
Taking Matters Into the County’s Hands
The proposals included three property tax relief proposals the county has the authority to do right now.
One would repeal Lincoln County’s Quarter per Quarter Rule. That rule only allows so much housing eligibility on every quarter section of land designated for agricultural use. The idea would increase the amount of land available to build housing and create more real estate opportunity. The hope is more competition would reduce the sales price/cost amount of new construction of properties.
A second idea is to study consolidating county and city law enforcement functions at the county level. The study would assess the cost savings and responsiveness. The hope would be to create financial savings for the city by contracting with the county and thus allowing less need for property tax reliance at the city level.
The final one presented would repeal non-essential spending at the local level. Arends said he believes the streamlining of government could save around $250,000.
“Not every single line item of spending in every local budget is critical and essential,” Arends said. “You have to balance the government’s spending with the taxpayer’s and their family budgets as well.”
Two more town halls are scheduled. One is scheduled at the Outdoor Campus in Sioux Falls (4500 S. Oxbow Ave.) Dec. 2 at 6:30 p.m., and another at Tea City Hall (600 E. 1st Ave.) in Tea Dec. 3 at 6:30 p.m.
