Full Breakdown
South Dakota Task Force Proposes 19 Strategies to Reduce Property Taxes
10/28/2025, 12:48:30 AM
Overview of Property Tax Proposals
A legislative task force in South Dakota has proposed 19 strategies aimed at reducing property taxes for homeowners, amidst a significant increase of 38.8% in property taxes from 2020 to 2024. The proposals, presented on Wednesday, include a combination of spending cuts, tax increases, and the allocation of state funds. Lawmakers are expected to address these proposals during the upcoming legislative session in January, which may also include discussions on raising the state sales tax from 4.2% to 5% and introducing a half-percent sales tax for counties.
Key Proposals and Recommendations
Among the most contentious proposals is a suggested 5% cut in state government general fund spending, amounting to approximately $123 million. This reduction would not directly lower property taxes, as the state does not collect property tax revenue; however, the savings would be redirected towards property tax relief. Senate President Pro Tempore Chris Karr, who chairs the task force, emphasized the need for cooperation from Governor Larry Rhoden's administration to identify potential cuts.
Another significant recommendation involves creating a property tax relief fund by allocating 25% of annual increases in ongoing state revenue. This fund aims to provide long-term relief and could grow substantially over time. Additionally, the task force has proposed a temporary increase in the sales tax to help replace some property taxes collected by school districts.
Criticism and Concerns
Critics of the proposed spending cuts, including Jim Terwilliger, commissioner of the South Dakota Bureau of Finance and Management, have expressed skepticism about the feasibility of implementing such reductions. Terwilliger noted that previous budget cuts were unpopular and often restored. Furthermore, concerns were raised by task force member Senator Randy Deibert, who cautioned against the potential influx of new residents attracted by lower property taxes, which could impact the state's quality of life.
Official Statements
House Speaker Jon Hansen, who is also running for governor, stated, “If we want real tax relief, it must come from cuts to government spending. Otherwise, we’re just shifting the burden onto other taxpayers.” Meanwhile, Karr highlighted the importance of the proposed property tax relief fund, comparing it to annual increases in state employee salaries and Medicaid reimbursements.
Conflicting Reports & Gaps
While the task force's proposals aim to address property tax concerns, there is ongoing debate regarding the effectiveness of tax increment financing (TIF) regulations. Senator Taffy Howard's proposed changes to TIFs have sparked controversy, with some arguing that they could hinder necessary development while others believe they are essential to prevent misuse by wealthy developers.
What's Next
As the South Dakota legislature prepares for its annual session, the task force's proposals will be a focal point of discussion. Lawmakers will need to navigate the complexities of balancing tax relief with the potential impacts on state funding and local services, as well as addressing the concerns raised by various stakeholders regarding the proposed measures.
