School districts around Sioux Falls are concerned their schools are losing important property tax revenue to the larger city’s school district. South Dakota law allows property owners to petition to switch school districts. That’s true as long as the move doesn’t take more than two percent of the district’s tax base.
House Bill 1071 changes South Dakota’s system to allow property petitions from one school district to a contiguous district. The bill alters the law from using the current value of land to include its potential value.
West Central School Superintendent Jeff Danielsen says his district needs this law.
"We have a current development going on. That land has already been annexed into the city of Sioux Falls and is undergoing a transformation from a gravel pit into a major housing and retail development. We believe that $100 million in total valuation is not out of the question in this particular case," Danielsen says. "The current law says that not more than two percent of a district’s valuation can be petitioned out at one time, so this $180,000 gravel pit would currently meet the criteria for a minor boundary change."
Danielsen says considering the projected value of that land would move 22 percent out of the district. He says that’s about $300,000 in tax revenue for West Central Schools each year. Other superintendents for districts near Sioux Falls also support the measure.
Some developers say they're against the bill. They say their clients want homes in the Sioux Falls School District, and they follow the law, which gives them the right to petition into the district. They also say it’s impossible to predict a property’s value a decade in advance.
Lawmakers on the House Education committee support the change to include future property value when switching school districts. House Bill 1071 heads to the House floor on a vote of 12 to 2.