A legislative task force aims to reduce property taxes by nearly $900 million during the next legislative session. The group convened to discuss how to achieve that relief.
A tax change may be on the table, but it may not be a one-size-fits-all solution.
Currently, property taxes in the state support schools, counties, cities, and other local government entities.
This means that lowering property taxes creates a budget hole that local governments must fill. The Legislature has already faced criticism for previous cuts made this session. At its first meeting, the property tax task force set a goal of 50% relief.
Sen. Jim Mehlhaff, a member of the Task Force, stated that they are the ones called upon to provide tax relief.
“And the only way we are going to do that is if we find hundreds of millions of dollars that we can direct towards property tax relief, and there’s not a lot of places where you’re gonna find that,” Mehlhaff told the crowd.
He added that they must find the money and provide tax relief without causing undue hardship for education and local governments.
The governor’s office presented an option for county-level relief. Jim Terwilliger is the Commissioner of the Bureau of Financial Management. He stated that the proposal would allow each county commission to directly reduce homeowner property taxes by replacing the revenue with an increase in the county sales tax of 0.5%.
“And that can provide anywhere from a 10% up to a 22% or 23% tax break for the homeowner,” Terwilliger pointed out.
He said it adds a new tool to the counties’ toolbox. He added that it addresses the heart of the state’s property tax issues.
“Many of the areas in the state where we have problems are either high-tourism or economic retail draws, such as Sioux Falls and the Black Hills area. You have a high rate of visitation. Terwilliger said, “You have people coming in and visiting.” “Those people, whether they’re here or in-state, would be helping to contribute to that property tax relief.”
According to Rep. Les Heinemann, property tax funds support every county, and as a result, each county has a unique set of issues.
“We also have gambling in my city and county. We get nothing from that because it is tribally owned. I’m saying this because I’m attempting to demonstrate, or describe, the variety of situations that exist from county to county across the state. “It’s unbelievable,” Heinemann said. “Everyone in Moody County goes to Sioux Falls and spends all of our money. They benefit from it, while our community struggles.
The task force’s next meeting is scheduled for October.
