South Dakota Senate Bill SB131

South Dakota 2023 Regular Session

• Introduced: 1/26/23
• Refer: 1/26/23

Caption

Remove certain limitations on property tax levy increases.

Impact

If enacted, SB131 would significantly alter how taxing districts manage property tax levies, moving towards a more flexible and potentially less regulated system. The repeal of these restrictions means that local governments could adjust their revenue strategies based on current needs rather than prior limitations. This change could allow local entities to better respond to funding needs for community services such as education, infrastructure development, and public safety, although it may also lead to variations in taxation across different districts.

Summary

Senate Bill 131 aims to remove certain limitations on property tax levy increases for taxing districts in South Dakota, specifically addressing restrictions that have been in place for the past few decades. The bill seeks to repeal several sections of the current law that cap the revenue increases from property taxes to a maximum of three percent or tied to an index factor related to consumer price changes. The intent of this legislation is to give local taxing authorities more flexibility in raising revenue without being bound by past restrictions.

Contention

The bill has sparked contention among various stakeholders. Proponents argue that eliminating the levy caps allows for necessary revenue adjustments, ensuring that local governments can adequately fund their services and respond to increasing costs over time. Conversely, critics fear that removing these limits could lead to excessive tax burdens on residents, particularly in areas with already high property taxes. There are concerns that the lack of cap might disproportionately affect low-income communities and create disparities in funding across districts.