A South Dakota Senate committee voted Wednesday to kill a bill that would have set nearly all local property tax levies at zero, citing a lack of a funding plan and concerns about local control.
The Senate Taxation Committee voted 7–0 to send Senate Bill 58 to the 41st legislative day, effectively defeating the proposal.
The bill, sponsored by Sen. John Carley, R‑Piedmont, proposed zeroing out mill levies for counties, cities, schools, and other local taxing districts and directing the Bureau of Finance and Management to recommend replacement funding to lawmakers.
Carley framed the bill as a “reset” of South Dakota’s property tax system.
“So it’s an opportunity to think about what we need to do with our property tax system. So we need to reboot it,” he said.
Opposition to the bill was broad, with local governments, school groups, business organizations, and state finance officials warning that the bill would immediately eliminate nearly $2 billion in revenue without a replacement mechanism.
Nathan Sanderson of the South Dakota Retailers Association said the proposal would create an immediate crisis.
“Senate Bill 58 would set the mill levies at zero. That’s about a two‑billion‑dollar impact to local units of government,” he said.
Derek Johnson of the Bureau of Finance and Management said the bill had a serious flaw.
“An executive branch agency should not recommend budgets for local jurisdictions. That’s not local control,” he said.
The committee voted unanimously to defer the bill.
