While we Aberdonians have been getting all excited about the dust-up over Brown County IT chief Paul Sivertsen’s questionable activities on the taxpayer dime, Jonathan Ellis notices a Brown County Commission action that has much greater implications for taxpayers statewide:
Two weeks ago, the commission emerged from a closed-door meeting and passed an innocuous sounding resolution authorizing the county to appeal a state decision about how much money a pipeline company is required to pay in property taxes. The appeal to the Hughes County Circuit Court means that Brown County thinks the state isn’t assessing as much money on the pipeline as it should, thus depriving local governments of property tax revenues.
…The appeal could have consequences for other entities that, like NuStar, are valued by the South Dakota Department of Revenue, making NuStar a test case. If it turns out that the state has undervalued NuStar’s pipeline, then it’s possible that other pipelines and industries which are centrally assessed by the state could see their tax bills challenged by local governments [Jonathan Ellis, “County’s Appeal on Pipeline Taxes Could Have Broad Effect,” that Sioux Falls paper, 2015.09.19].
Lowballed assessments from the state have previously been cited as one reason that South Dakota counties aren’t seeing nearly as much tax revenue as TransCanada promised them from the Keystone tar sands pipeline, which just misses Brown County but runs through Marshall and Day to our east. Ellis notes that big projects like Keystone aren’t reducing the total tax burden on homeowners:
Over time, the percentage of total taxes paid by regular homeowners has steadily gone up while the amount paid by large, centrally assessed corporations has gone down. In 2000, owner-occupied properties accounted for 34.6 percent of all property taxes paid in the state, while centrally assessed corporations paid 5.2 percent. Last year, owner-occupied taxpayers paid 39.5 percent of all property taxes while centrally assessed corporations paid 2.4 percent [Ellis, 2015.09.19].
Maybe we need to have a job-swap day: let the county assessors do the central assessments on pipelines and other big corporate installations, and let the state work on owner-occupied assessments. And maybe instead of more regressive sales taxes, the Blue Ribbon K-12 panel should look to those undertaxed centrally assessed projects for some of the revenue they need to save South Dakota from its teacher-pay crisis.