The Class Act of the Week is Democratic Senator Jim Peterson (D-4/Revillo). Senator Peterson proposed Senate Bill 136 this year to incentivize grassy buffer strips along South Dakota’s lakes and streams to reduce erosion and runoff and improve water quality. Senator Peterson’s bill passed both the Senate and the House, only to be vetoed by Governor Dennis Daugaard. Now that Governor Dennis Daugaard rolls in with his own riparian buffer strips legislation, how does Senator Peterson respond?
He praised Daugaard on Monday for taking up the cause.
“I think the governor’s version is a better version than the one I wrote,” Peterson told the taskforce.
…Peterson spoke with appreciation for the administration’s willingness to preview the bill for the taskforce, whose members include legislators, county assessors, and agricultural producers.
“I think it was really great you brought this to this committee,” Peterson told [Revenue Dept. tax wonk Michael] Houdyshell, adding there is now time to vet the legislation. The 2017 session opens in three months [Bob Mercer, “Governor Intends to Offer Buffer-Strip Tax Break,” Black Hills Pioneer, 2016.10.18].
The Department of Revenue presented the Ag Land Assessment Task Force with the following spreadsheet showing the estimated cost of the Governor’s plan (I got these photos at the Coteau Area Conservation Districts Legislative Banquet in Webster Monday evening):
Eight counties have more than 10,000 acres that would qualify for the riparian buffer strip incentives in Governor Daugaard’s plan, but only one of those counties, my own Brown, is in East River. West River counties, generally drier and used for grazing rather than crop production, have lower land values; Brown County’s qualifying grassy strip land thus has the highest total equalized value—$18.5 million—and the highest possible fiscal impact from putting every rod of our waterside land to grass—a bit over $74,000. The county facing the lowest possible fiscal impact is Douglas County (around Armour and Corsica), with just 53 listed riparian acres whose complete grassification and reclassification would nick local tax assessments by just $377. Statewide, the fiscal impact of total grassification would be $1.24 million, or an average of less than $19,000 per county. The savings per acre for participating landowners statewide would average $5.01 per acre.
I should be careful with those figures and with the word “impact.” The dollar figures assume complete participation by every qualifying landowner on every qualifying acre, which isn’t going to happen. Someone out there will keep planting corn to the water’s edge. The average savings per enrolled acre might actually be higher if the only enrollees are the East River farmers on higher-value land. And “impact” misstates how the proposal works. Like SB 136, the Governor’s plan does not reduce the total levy that each county can set. Brown County, for instance, would not have to lower its budget $74,000 to accommodate complete riparian enrollment. They would have to shift that $74,000 in assessment from 10,000 grassified acres to the other 1.1 million acres in the county, including non-riparian land owned by the farmers taking the grassy buffer strip incentive. In other words, at worst, the Governor’s grassy strip incentive would result in shifting not quite seven cents of property tax to each non-riparian acre in the county. Under that worst-case scenario, a farmer who owns two sections would pay $87 more in property tax.