South Dakota Senate shoots down property tax valuation cap

PIERRE — The South Dakota Senate shot down an effort Thursday to cap property tax valuation increases at 3% a year for homeowners and rental properties.

Senate Bill 167 would have capped increases in response to the heavy hikes in property valuations that followed the COVID-19 pandemic’s start in 2020.

Sen. Jack Kolbeck, R-Sioux Falls, said his goal was to offer some relief to long-term homeowners whose new neighbors from other states helped push home values beyond what local incomes can absorb.

The bill narrowly cleared the Senate Taxation Committee on Wednesday despite opposition from a parade of lobbyists for schools, local governments and the state Department of Revenue.

On the Senate floor, opponents pointed to some of the same points raised by those lobbyists. Sen. Reynold Nesiba, D-Sioux Falls, argued that the change would disconnect property tax valuations from the market and offer more relief to those with higher-priced homes.

Sen. Tom Pischke, R-Dell Rapids, said the bill would shift tax burdens in ways the lawmakers could not predict from the Senate floor.Sen. Lee Schoenbeck, R-Watertown, pointed to the state Constitution, which requires that property tax assessments be fair and equitable across all property classes.

“There is a constitution, and we have to follow it,” Schoenbeck said.

Kolbeck made one final plea before the Senate voted.

“When you go home this weekend, and you’re talking to your constituents about property taxes that keep going up and up and up, I hope you have the right answer for them,” Kolbeck said.

The bill was rejected by a vote of 20-11.

This article originally appeared on Sioux Falls Argus Leader: South Dakota Senate shoots down property tax valuation cap