(From Scott Sundberg, Hub City Radio, and Todd Epp, Northern Plains News)
South Dakota lawmakers opened two days of hearings this week in Aberdeen on the state’s property tax system, hearing hours of public testimony about rising bills, uneven tax burdens, and possible reforms.
The issue affects nearly every South Dakota property owner, shaping how much residents pay to keep their homes and how schools, cities, and counties fund basic services. Task force members are studying whether the state can lower or replace property taxes without gutting budgets for education, law enforcement, and infrastructure.
The Comprehensive Property Tax Task Force, meeting at Northern State University, is reviewing school funding, homeowner relief, and the feasibility of reducing or replacing property taxes.
Task force chair Sen. Chris Carr, R-Sioux Falls, said the Legislature created the panel to find lasting relief for families, middle-class homeowners, and retirees. Three subcommittees are examining local and state finances, tax exemptions, and alternative funding sources.
“We’re reviewing property tax policies to help young families buy homes, the middle class stay stable, and retirees remain in their houses,” Carr said.
House Speaker Jon Hansen, R-Dell Rapids, the task force vice chair, said evening sessions were added to allow more residents to speak.
An Aberdeen homeowner told the panel his property taxes rose $2,500 last year to about $6,800. He said his neighborhood lacks nearby bike paths and gets infrequent street sweeping despite the higher bill.
A Langford school board member said legislative mandates, including teacher salary requirements, have strained local budgets.
“Once I set salaries for my teachers as a pool, I never get to fall below that,” she said. “Those costs, along with earlier state education initiatives, forced our district to pass an opt-out this year.”
A Mount Vernon resident said a recent opt-out hits rural property owners harder than wealthier residents in town.
“Our opt-out costs my wife and me $3,500 a year,” he said. “For two doctors in a new house near the school, it’s about $300.”
Sen. Taffy Howard, R-Rapid City, said replacing all property taxes would cost about $2.1 billion, and suggested examining the $1.6 billion in existing sales tax exemptions.
Rep. Scott Odenbach, R-Spearfish, said the state needs to cut spending and define essential services, noting testimony from an elderly woman who returned to work to pay her property taxes.
Hansen said the trend is pricing younger South Dakotans out of homeownership, with the average age of a first-time buyer approaching 40.
