Governor Larry Rhoden has admitted that his wimpy buck-passing proposal, Senate Bill 96, to let counties impose a half-penny sales tax to lower property taxes isn’t enough to provide broad property tax relief. Yesterday at the Capitol he went upstairs to House State Affairs to endorse Senate Bill 245, a freshly hoghoused vehicle bill that…
- Creates a homeowner property tax reduction fund;
- Launches the fund this summer with $55,896,576 from state reserves;
- Draws funding next year and onward from the 0.3 percentage points that return to the sales tax when the 4.2% rate sunsets on July 1, 2027;
- Locks that money away for the sole purpose of reducing school districts’ general education levies on owner-occupied homes.
“This relief should be felt in the short term and the long term,” the governor told the committee, “And let’s be clear — it has my full support.”
…State Finance and Management Commissioner Jim Terwilliger said SB 245 alone would result in property taxes going down 14 to 15% on average statewide [Bob Mercer, “Property-Tax Relief Plan Comes Together at Last,” KELO-TV, 2026.03.04].
That “full support” is a remarkable reversal from December, when Governor Rhoden said of the proposals that the Legislature’s interim task force on property tax reform put forward, “I’ve realized that there’s not much I’ve seen that I could support.” The most substantive proposals from that task force included Senator Randy Deibert’s (R-31/Spearfish) Proposal R, putting next year’s sales tax hike into a property tax replacement fund, and Speaker Jon Hansen’s (R-25/Dell Rapids) Proposal X, using $60 million from reserves plus $60 million from the housing infrastructure loan fund to refund property taxes.
Terwilliger’s 15% estimate on SB 245 plus the 20% relief some counties might get from SB 96 constitutes what Rhoden said yesterday would be “the largest property-tax cut in the state’s history.” But after we burn up the start-up reserve cash, every dollar of that relief from tax on your house will come from paying higher sales tax on food, clothes, and other things you put in your house.