PIERRE A panel of South Dakota lawmakers endorsed Republican Gov. Larry Rhodens property tax proposal Thursday over objections described as soft by education lobbyists, but most members also said they want to go further than the governor to provide tax relief.
The Rhoden plan would cap the growth in countywide home values for five years, permanently trim the amount of revenue counties and schools could collect based on new construction, and expand eligibility in a property tax freeze program for elderly and disabled people.
The Senate State Affairs Committee voted 8-1 to send thebillto the Senate floor.
Before making that call, most panel members spoke up to characterize the plan as a good idea, but one that wont create the kind of meaningful property tax relief their constituents want.
The bill wouldnt reduce or cap property taxes, with the exception of the approximately 11,000 new households that would now qualify for the freeze program. The proposal also does nothing to limit tax growth on commercial properties or address the comparatively flat tax collections on agricultural land.
Sen. Tom Pischke, R-Dell Rapids, said hes not especially excited to go home and tell his community that their taxes will stay high and still go up, just maybe more slowly.
This bill doesnt give me a warm and fuzzy, he said.
Pischke asked Mike Houdyshell, who directs the state Department of Revenue, if Rhoden is willing to amend the bill or add to it. Sen. Kevin Jensen, R-Canton, had a similar question.
This is an ongoing conversation, said Houdyshell. Certainly weve got time left this session to work with all the parties involved that will provide some relief.
The explosion in property taxes in certain parts of the state is partly due to an influx of new residents. Demand for homes has driven up prices, and a countys total property value by extension a figure that factors into the math used to determine a homeowners annual property tax bill. Also factors: How much money a local government like a county or school district needs to provide services and how much new construction has taken place.
Property tax relief has consistently rated as among the most important issues for voters, according to the committee members who ran for reelection last fall and face their constituents at weekend cracker barrel meetings during the legislative session.
Like Jensen, Sen. Arch Beal, R-Sioux Falls, lives in Lincoln County. Thats among the states fastest-growing. Beal described himself as one of those unhappy Lincoln County taxpayers.
Like every committee senator but Sioux Falls Republican Chris Karr, Beal voted for the Rhoden bill. But, he said, it does not stop here.
Karrs opposition was tied in part to the problems opponents said the Rhoden plan might create for high-growth counties, as it seeks to hold down one of the levers that raises taxes.
Minnehaha County Commissioner Dean Karsky and Lincoln County Commissioner Jim Schmidt both said collecting more money thanks to new homes has helped their counties keep up roads, pay law enforcement and otherwise attend to the business of serving an ever-growing public. Both said property taxes are unacceptably high for some, but didnt see caps as the best answer.
Rob Monson of the Associated School Boards of South Dakota also arrived at the committee with an understanding tone on the issue of high tax burdens. But not allowing schools to take advantage of new growth could hurt.
We are in a very soft opposition to this, Monson told the committee. We are working with the governors office on a fix for what we see as a problem. When we have some school districts that are seeing immense growth, the limitation on that growth is going to cause some problems.
Senate Bill 216 will next appear on the floor of the state Senate.
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