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SDPB Radio Coverage of the South Dakota Legislature. See all coverage and find links to audio and video streams live from the Capitol at www.sdpb.org/statehouse

Measure Repeals Property Tax Cap

A measure that impacts property taxes has passed the first stage in the legislative process. House Bill 1216 repeals the limit set on how much counties and townships can raise property taxes each year. The measure passed the House Taxation committee by a vote of 10 to 4. 

During the 80s and 90s the issue of rising property taxes was a main concern for South Dakota voters. In response lawmakers passed Governor Bill Janklow’s property tax reduction act. The act restricted how much counties could raise property taxes to 3% or the rate of inflation – whichever is less. House Bill 1216 would repeal this cap entirely.  

Proponents of the measure say it’s time to give back local control to the counties. Ken McFarland is with the Minnehaha County Commission. He says local governments are having trouble funding basic services especially road and law enforcement needs.

"I think that we literally heading for a train wreck if the counties do not get some relief either on property tax or we find some new revenue source to dedicate to counties. Cause we simply cannot keep up with the demands that the State is placing on us," says McFarland.

Opponents of the legislation say the current system is working and allows counties to opt out of the limit if more funding is needed. Mike Houdyshell is with the Department of Revenue. He says before the limit South Dakota property taxes were increasing 6% every year.

"The reason why the current system exists is because that’s what the voters demanded. The voters through a series of ballot initiatives made their voice loud and clear that something needed to be done about the growth in property tax revenues in South Dakota," says Houdyshell.

Others opposed the bill for different reasons stating that the states entire tax system is broken and needs reform.

Despite opposition the measure passed the House Taxation committee and now moves to the House floor for further discussion.