Confident that she can’t get her censorious colleagues to enact any of her legislation, Senator Julie Frye-Mueller (R-30/Rapid City) has submitted the first potential ballot question of 2026… a submission that violates initiative law by coming so early.
According to the Legislative Research Council’s recommendations sent November 6, Frye-Mueller wants to write a property tax cap into Article 11 Section 2 of the South Dakota Constitution. Her initiative retreads her 2023 Senate Joint Resolution 503, which she withdrew before it received a hearing. Like 2023 SJR 503, Frye-Mueller’s proposed initiated amendment would cap annual increases in assessed property value at 2% and cap total annual tax due (except for special assessments) on property at 1% of its assessed value. Like 2023 SJR 503, this initiative would create fiscal disaster for counties and school districts.
Frye-Mueller adds a fiscal twist to her initiative: in an apparent attempt to erase the huge pandemic/white in-flight-induced surge in property values, Frye-Mueller proposes to retroactively apply the 2% increase cap back to 2020. County assessors would have to erase property assessments back to 2020, then multiply that year’s pre-housing-boom assessed value by no more than 2% for each following year to determine the current assessed value. From 2020 to 2021, the assessed value of all real property in Frye-Mueller’s home Pennington County increased 6.06%, from $10.099 billion to $10.913 billion.
That 2020 rollback would only apply to properties still in the hands of their 2020 owners. Frye-Mueller’s amendment would whack Blue State Refugees and dupes of Kristi Noem’s bad-plumber ads who’ve driven up property values with reassessments on the date of their transfer or purchase of the property.
Frye-Mueller could have proposed this amendment for the 2024 ballot—with LRC comment in hand as of November 6, she could have forwarded her draft to Attorney General Marty Jackley, started the 80-day clock for his review, and had an approved petition on the streets by the end of January, giving herself four months to collect the 35,017 signatures necessary to place her tax cap on the 2024 ballot. However, last winter, when the Eighth Circuit Court of Appeals declared that the Constitution demands that citizens have at least until six months before the election to circulate initiative petitions, the Court also conjured up a twelve-month deadline for submitting the official language of an initiated amendment in petition form. Anyone who wanted to ask voters to amend the South Dakota Constitution at the 2024 election needed to submit a final petition with their sponsoring names to the Secretary of State by Monday, November 6, 2023. To ensure the LRC and Attorney General completed their statutory but dilatory review processes by that date, Frye-Mueller would have had to submit her draft initiative to the LRC by July 28.
But having missed the November filing deadline, Frye-Mueller has also jumped the gun on a pre-line. SDCL 2-1-1.1 says sponsors may not circulate petitions for initiated amendments until two years before the general election at which the sponsors seek a vote. The general election in 2026 is November 3, so Frye-Mueller can’t collect signatures on her tax cap petition until November 3, 2024. But SDCL 12-13-25 prohibits sponsors from submitting draft initiatives to the LRC for review until six months before the beginning of the circulation period—in this case, for the 2026 cycle, May 3 of 2024. That restriction came from from Senator Reynold Nesiba’s (D-15/Sioux Falls) 2018 Senate Bill 11. Saying sponsors couldn’t draft petitions to the LRC more than 30 months before the targeted election struck me at the time as odd and unnecessary, but it is the law, and Frye-Mueller has broken it. Frye-Mueller couldn’t legally submit (and LRC couldn’t legally review and comment on) her tax cap initiative until May 3, 2024. Secretary of State Monae Johnson shouldn’t even have a “Potential 2026 Ballot Questions” page, because state law doesn’t allow us to submit drafts of ballot questions for 2026 until May 3 of next year.
I’d suggest that Senate boss Lee Schoenbeck (R-5/Lake Kampeska) could kick off the 2024 Session by censuring Senator Frye-Mueller again, this time for violating initiative law with her far-too-early submission of a draft amendment to the LRC, but with the LRC gamely providing an illegal early comment and the Secretary of State blissfully ignorant of the illegality of submitting 2026 initiative so early, it seems a shame to single out Frye-Mueller for penalty. The only penalty necessary is that the Attorney General, when he receives Frye-Mueller’s draft for review, should return the draft to sender, say he can’t review any ballot measure submitted illegally early to the LRC, and direct the sponsor to resubmit her language to the LRC for review on or after May 3.
This is a cribbed idea from California’s Prop 13, passed and enacted under the Reagan Governorship. It hamstrung CA’s government for decades AND disincentivized folks from selling their homes at a profit and moving on after retirement. It was part of the underlying cadre of causes for California’s rapid growth in homelessness as it also disincentivized new housing development. It was major part of Reagan’s ’70’s gubernatorial dress rehearsal for his governance-hating WORST PRESIDENCY EVER performance that followed. Go figure.
SDCL 10-13-35 currently caps increases in assessed value at 3% or Consumer Price Index, whichever is lower, plus a growth factor calculated by the county.
While counties can opt out of that statutory cap, Frye-Mueller’s constitutional amendment provides no opt-out. Once again, a supposedly conservative Republican rejects the notion of local control in favor of imposing her ideology from the top down.
Richard is absolutely right in his assessment of California’s prop 13. Property tax systems that freeze in place assessments don’t fix anything, and insure future chaos.
Richard is correct. Property 13 also hurt the public school system hard with shortages of revenue.