The following article is from NEWSCENTER1.
Property tax relief? S.D. Legislative group has a plan
October 24, 2022 Chris Dancy
RAPID CITY, S.D. — A group of South Dakota legislators has taken a major step forward toward providing property tax relief to state homeowners.
A summer study group is proposing a tax law change that would collectively reduce homeowners’ tax burden by $70 to $90 million.
“When you’re out campaigning, the number one issue that I hear over and over is property tax,” said District 34 Representative Mike Derby.
Derby was part of the summer study group which was chaired by District 30 Representative Trish Ladner.
He says dealing with property tax is a complex issue. “It’s a multi-headed animal,” says Derby. “You’ve got county, municipalities, state, and school districts all involved. And so that’s what we did. We spent this summer studying all that.”
The challenge for lawmakers is that property taxes are levied and collected by South Dakota’s counties. The state has little direct impact on what homeowners owe. But the state can change how much of a home’s value is included in school levy calculations.
“It’s $100,000 of the full and true value of each owner-occupied single-family dwelling exempt from property taxation level pursuant to statute 10-12-29,” says Derby. “Very simple, but very effective.” He adds that specifying that only owner-occupied homes are included means that the measure will only benefit South Dakota residents. And, he says, “It leaves the counties whole, the school districts are held harmless and the $70,000,000 to $90,000,000 a year in property tax relief will be backfilled with general funds.”
Derby calls the bill a “bottom-up” tax cut because it affects the first $100,000 of a home’s value. So someone who owns a $200,000 home will see a 50% reduction in school levy, while the owner of a $1,000,000 home will see a 10% reduction.
He says the state’s strong revenue can cover the general fund outlay. “Thanks to our robust economy and the fact that our economics are strong, we believe we can move this forward and have that discussion during session.”
The property tax proposal comes at the same time legislators are considering reintroducing a measure to cut the state sales tax on groceries. Derby says it will be up to the next session of the legislature to determine whether and how to implement both measures.
“This is all negotiable, all depending on revenue numbers,” he says. “Basically, what one does is removes a revenue source from the State of South Dakota. And what we’re proposing is redirecting a current revenue source for this property tax reduction.”
From here, the bill goes to the legislature’s executive board. If approved there, Derby would introduce the legislation in the House while State Senator Jack Kolbeck of Sioux Falls would introduce a companion bill in the Senate.
Commentaires