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Legislative committee proposes six property tax ideas, leaves major lifting for later

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Legislative committee proposes six property tax ideas, leaves major lifting for later

Oct 09, 2024 | 6:21 pm ET
By Joshua Haiar
Legislative committee proposes six property tax ideas, leaves major lifting for later
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Clouds gather over the South Dakota Capitol building in Pierre on Sept. 17, 2022. (Seth Tupper/South Dakota Searchlight)

A committee of state lawmakers assigned to review South Dakota’s property tax system endorsed draft “concepts” Wednesday in Pierre that are intended to improve the efficiency, accuracy and consistency of property tax assessments.

But don’t expect those proposals to make a major impact on property taxes, said Rep. Trish Ladner, R-Hot Springs, who serves on the committee and is one of the Legislature’s leading advocates for property tax relief. 

She said the committee’s focus was narrow, and broader property tax relief proposals will come during the legislation session that starts in January.

“It just isn’t coming from the summer study,” Ladner said after Wednesday’s meeting.

She pledged to introduce legislation next session that she’s been working on for over a year, she said, but declined to elaborate.

The Study Committee on Property Tax Assessment Methodology endorsed six ideas. Some could end up as legislation, while others are recommendations. The committee did not determine how the concepts will ultimately be implemented. 

Here are the six concepts:

  1. Through legislation or rule, the Department of Revenue could be required to create a compliance audit for all county equalization offices to ensure assessments are consistent with state laws. The frequency and scope of the audits were not determined.
  2. A workgroup would look into a shared software system for property appraisals and tax assessments. This could streamline processes between counties and save money by not making each county buy software that costs up to $600,000. The workgroup, comprised of local and state officials, would present an initial report within the first year to the House and Senate tax committees.
  3. An education platform would be developed for new directors of equalization, covering appraisal manuals and other best practices.
  4. Legislation would be proposed to clarify that counties can cooperate, collaborate, and share data related to property tax assessments. It was made clear that there would not be any obligation to do so.
  5. An education platform would be developed for members of county boards of equalization, many of whom have little experience with property assessments, according to Sen. Jean Hunhoff, R-Yankton.
  6. The Department of Revenue would share data on property tax assessments across South Dakota with lawmakers to ensure the fairness and efficiency of assessments. The department welcomed the idea.

During earlier meetings, the committee explored various issues related to property taxes, such as the rising burden on homeowners and the complexities surrounding agricultural land assessments. Testimony from county directors of equalization and others emphasized the need for a better, fairer system, with concerns raised over the growing tax burden on residential property owners in light of increasing home valuations.

The committee is co-chaired by Sen. Randy Deibert, R-Spearfish, and Rep. Drew Peterson, R-Salem. Peterson said the proposals reflect the committee’s goal of creating a “fair and equitable process” for property taxes in South Dakota. He said the proposals are largely collaborative efforts between the committee, county officials and the Department of Revenue.

“There’s more work to be done that does not apply to assessment methodology, and we intentionally did not get into that tax conversation as much as maybe some of us would have liked to,” Peterson said. “That doesn’t mean that conversation should not be had. And that conversation will need to be had, as we’ve all identified.”

Peterson said the committee invites public comment before it submits the recommendations to lawmakers at the Legislature’s Executive Board meeting in November.

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