PIERRE, S.D. (MITCHELLNOW) — The South Dakota Senate passed legislation Wednesday requiring school districts to hold public votes before implementing property tax opt-outs or issuing capital outlay certificates.
Senate Bill 208, introduced by Sen. Sue Peterson, R-Sioux Falls, passed 19 to 15.
The bill, amended on the Senate floor, mandates that school boards must put opt-out decisions and capital outlay certificates to a public vote rather than the current system that requires citizens to gather petition signatures to force a referendum.
From 2019 to 2023, South Dakota school districts opted out for $165 million and issued capital outlay bonds exceeding $413 million above existing funds, Peterson testified.
“Any property tax relief the legislature passes is futile without this bill,” Peterson said.
Sen. David Wheeler, R-Huron, raised concerns about the timing of required elections.
“That election has to occur between July 15th and October 1st,” Wheeler said. “It’s going to be a special election just for this issue.”
Sen. Stephanie Sauder, R-Bryant, pointed to a school in her district that has responsibly managed a $250,000 opt-out over 14 years, reducing it to $100,000 annually for the past nine years without community opposition.
“This bill would require them and every other district to hold a vote each time with an obvious cost to run the vote,” Sauder said.
Sen. Taffy Howard, R-Rapid City, said the bill burdens the proper party.
“In some cases, yes, the system may be working well, but the system as it is right now is putting the burden on the taxpayers, and this bill will shift that burden back to where it should be to the government agency requesting to opt out of the limits currently put on them,” Howard said
The bill, as amended, would require a simple majority of voters casting ballots to pass the opt-out.
The legislation now moves to the House of Representatives for consideration.