Property tax valuation bill fails in Senate

The South Dakota Senate shot down an effort Thursday to cap property tax valuation increases at 3 percent a year for homeowners and rental properties.

Senate Bill 167 would have capped increases in response to the heavy hikes in property valuations that followed the COVID-19 pandemic’s start in 2020.

Sen. Jack Kolbeck, R-Sioux Falls, said his goal was to offer some relief to long-term homeowners whose new neighbors from other states helped push home values beyond what local incomes can absorb. Also sponsoring the bill were District 30 Reps. Trish Ladner and Dennis Krull.

The bill narrowly cleared the Senate Taxation Committee on Wednesday despite opposition from a parade of lobbyists for schools, local governments and the state Department of Revenue.

On the Senate floor, opponents pointed to some of the same points raised by those lobbyists. Sen. Reynold Nesiba, D-Sioux Falls, argued that the change would disconnect property tax valuations from the market and offer more relief to those with higher-priced homes.

Sen. Tom Pischke, R-Dell Rapids, said the bill would shift tax burdens in ways the lawmakers could not predict from the Senate floor.

Sen. Lee Schoenbeck, R-Watertown, pointed to the state Constitution, which requires that property tax assessments be fair and equitable across all property classes.

“There is a constitution, and we have to follow it,” Schoenbeck said.

Kolbeck made one final plea before the Senate voted.

“When you go home this weekend, and you’re talking to your constituents about property taxes that keep going up and up and up, I hope you have the right answer for them,” Kolbeck said.

The bill was rejected by a vote of 20-11.

Krull said late last week the bill, which was initially filed with the House but then pulled and refiled in the Senate after it was given what was viewed as an unfavorable committee assignment in the House, had a lot of work put into both the bill and getting it through committee, which it did by one vote.

In what Krull considered an unusual move, however, the full Senate vote was taken on the bill the next day, giving citizens next to no time to contact their legislators.

“How many citizens that this affected had a chance to contact their citizens to talk about it?” Krull asked. “It seems to me awful funny they would have a committee hearing one day and it’s to the floor the next  (day) without anybody having time, any citizens having time, to contact their legislators.”

Senate Majority Leader Casey Crabtree said if a bill goes through a committee it goes to the floor calendar the next day, and if a bill is amended in committee, then it must wait a day before it is on the floor calendar.

“This particular bill was not amended,” Crabtree said. “One of the great things about the legislative process in South Dakota is that every bill gets a hearing, so proponents and opponents get to have their voices heard. This isn’t true in other states, where they pocket-veto bills and the public never has an opportunity to be heard.”

Krull said he and Ladner are not finished with the question to reel in assessments and property taxes, saying in the meantime he would demand answers from the counties in regards to budgets and a lack of equality when it comes to equal taxation.

Of particular interest to Krull is agricultural land. Numbers from the state Department of Revenue show that the percentage of total tax money collected in the state that comes grom agricultural land had declined over 3 percent since 2014, while owner-occupied has spiked that same 3 percent.

“We’re going to ride this horse until it dies,” Krull said.

On a related front, this morning the Senate Taxation Committee heard Senate Joint Resolution 505A (SJR505A). This Constitutional Amendment brought forward by District 30 Sen. Julie Frye-Mueller would take the assessment of properties back to 2020 values for those who have owned the same property since the end of 2020.

“The extreme rise in property taxes is the number one complaint from our citizens who are the taxpayers,” Frye-Mueller said.

“Numerous attempts at property tax relief for our citizens have been introduced throughout the years, but have been killed by the legislature,” Frye-Mueller said.

“That will continue until we take this issue to ‘we the people’ to hold our elected officials accountable to us. Our voices need to be respected and this resolution would put this on the November 2024 ballot for us to let them know that the state and counties need to live within our budget,” she said. “The wasteful spending that we have seen here in Pierre and at the county level has to stop.”

In a press release, Frye-Mueller said property taxes affect all property owners, adding even if you are a renter it negatively affects you as well, as your landlord’s property taxes have risen.

“We have senior citizens who have bought their homes decades ago and now are being taxed out of their homes,” she said. “We have families that work hard and live within their budgets and yet government still wants more.  While we welcome people who have moved here in search of freedom, there is no doubt this has caused inflated property values leading to the crisis we are in now.

“The long term benefit for all of us is that assessments can only be raised 1 percent per year. Sadly, I have already been approached by the Department of Revenue that they will be opposing this resolution. To my fellow legislators, we are the branch of government that represents the citizens of our state. I am respectfully asking for support of this resolution and let’s get this on the ballot this November.”

Comments from District 30 legislators were added to South Dakota Searchlight story by Jason Ferguson.

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