Lawmakers have stopped an effort to remove the property tax limit set on counties and townships. Counties and townships can raise property taxes each year but only by 3% or the rate of inflation – whichever is less. The restriction was placed on local governments during the Janklow administration.
Representative Dennis Feickert of Aberdeen was a county commissioner when the property tax limit was placed on local governments in the 90s. Feickert says at the time Governor Bill Janklow did what was necessary. However, Feickert says today counties have their hands tied and simply can’t pay for basic spending needs. He says part of the problem is the heavy reliance on property taxes, which pay for schools, roads, and law enforcement. Feickert says if lawmakers are unwilling to repeal the property tax limit then it’s time to look at other funding opportunities.
"Whether it’s, uh, some type of total tax reform, corporate income tax. Some type of a funding mechanism that gets funding for schools off the general mill levy, I think that’s a very important, uh, thing that we have to look at here in the state legislature," says Feickert.
Governor Dennis Daugaard agrees that counties have funding issues. However, he says repealing the property tax limit is not necessary because counties and townships will receive more money through his road funding legislation.
"If you look at most counties and talk to them, where is the pressure in your budget, its generally law enforcement and transportation. That’s where they feel they don’t have enough money," says Daugaard, "To the extent that you can relieve the pressure on the transportation side that should also help, indirectly, with the law enforcement side."
Daugaard says counties and townships can also opt out of the limit if they need more funding. Any opt out is referable to a vote of local citizens.