The session is over, and as I stated in my last article, we waited until the last week to tackle the important issues at hand. I’m now at home looking in the rear-view mirror and can say we accomplished many positive things for the Bookings residents. The House was the sensible body this year, passing good legislation and killing bad issues.
The biggest disappointment of the session was the inability to find the funds to give the Big Three (health care providers, state workers, and educators) the increase required by law. The appropriators worked hard to do the best but in the end were only able to provide a 1.4 percent increase, not close to the cost of living. That means these workers will be taking a pay cut next year when compared to this year. We need to do better. Our entire District 7 legislative team is united in doing better, but it also take leadership from the top.
We had over 25 different property tax bills, but they all boiled down to three main ones. The governor’s proposal, SB 96, that was approved and gave counties an option. The counties, if they want, can increase local sales tax by a half-cent to ease property taxes for people who live in owner-occupied homes. That increase would take state sales tax from 4.2 to 4.7 cents. The next major tax bill we dealt with was SB 245, adding an additional .3 cent to the state sales tax. Keep in mind that SB 96 is an option for the counties to implement and increase, but SB 245 mandates a .3 cent increase to the state sales tax that goes directly to property tax reduction. Both bill passed, possibly raising the state sales tax from 4.2 to 5 cents. SB 245 takes away any future state revenue from sales tax and gives 100 percent of the increase to owner-occupied property tax reduction.
One might say this is great and a big win that reduces property taxes. There is no doubt that it will reduce property taxes if you live in a home you own. Ask yourself, “Who is paying for this reduction?” This is truly a tax shift, not a tax reduction. A majority of legislators shifted the tax burden from the people who live in owner-occupied homes to renters and people who live in apartments. It reduces property taxes for some, but increases the states sales tax by .8% for everyone.
These two bills tie the hand of future legislators to give any kind of meaningful raises to our teachers who help raise our kids, road crews who clear snow and fix potholes, caregivers who look after our parents in nursing homes. These are not extras, they are essential and when we believe otherwise and give the people who live in expensive homes tax reduction, while renters, teachers, state workers, and modest income earners get squeezed harder, we are not doing our jobs.
Don’t get me wrong — I’m all for reducing taxes. There was a third bill that checked all the boxes for me, it gave meaningful property tax reduction yet set aside money for future expenses like raises for teachers, state workers, and caregivers. When it was amended it would not have raised sales taxes on food. This is the bill that I supported and thought was best for Brookings, but it failed.
I am committed to broad-based tax reforms that benefit many, not just the few. It is my hope that when the legislature convenes next January, we can come together and pay for all the items we have committed to and find a better formula for tax relief than shifting taxes.
In closing, I’d like to say shop local. If you buy your goods in Sioux Falls, you will be helping pay for property tax reduction in that county, on some of the most expensive homes in the state. If we keep it local, until we can find a better solution, we can keep the benefits of the property tax reduction that was passed local.
— This legislative report was written by District 7 State Rep. Roger DeGroot, R-Brookings.
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