Senator Al Novstrup (R-3/Aberdeen), who campaigned four months ago as an opponent of liberal tax increases, has proposed a liberal tax increase.
Senate Bill 169 would raise property taxes 0.5 mill (50¢ per $1,000 of value) on every class of property. SB 169 dedicates this tax increase to “increasing the wages of the employees employed by community support providers and nursing facilities.”
Working from 2015 data from the South Dakota Municipal League, raising taxes on all property by 50¢ per $1,000 of value on $78.8 billion of total taxable property valuation would raise South Dakotans’ taxes by $39.4 million, essentially wiping out the $36.4 million in property tax relief that was used to secure passage of the 2016 sales tax increase for teacher pay.
At today’s crackerbarrel in Aberdeen, Senator Novstrup explains this bill is a response to a problem brought to his attention by Aspire, an Aberdeen non-profit that provides services to people with developmental disabilities. Citing Aspire exec Jennifer Gray, Senator Novstrup said Aspire is only able to pay employees $11 an hour, well below the wages the state pays at the Redfield Developmental Center. This uncompetitive wage means significant employee turnover at Aspire, which erodes quality and continuity of care. SB 169 does not specify how the state would make these funds available for community support providers and nursing facilities, nor any accountability for use of these state dollars, nor any clear guidance on competitive salary standards to be met. It is a tax hike buttered with a vague promise.
Aspire foundation board member and former legislator Paul Dennert rose to question the wisdom of raising property tax, which is dedicated to local use like schools and roads, to add to a new state budget item in the general fund. Dennert suggested raising the excise tax on cars instead. Dennert’s grandson and current District 3 Representative Drew Dennert said he would prefer an alternate funding mechanism. Senate Pro-Tem Brock Greenfield (R-2/Clark) said “property tax probably isn’t the proper way to start the conversation.” Representative Burt Tulson (R-2/Lake Norden) referred to SB 169 as a “vehicle bill,” indicating he doesn’t view Novstrup’s proposal as anything close to passable in its current form.
But every Republican who spoke to Senate Bill 169 today, including Al Novstrup, signaled a desire to raise taxes for a good social program.