In floor debate on Senate Bill 245 Monday, Representative Will Mortenson (R-24/Fort Pierre) aptly summarized the nature of the transfer of wealth that will result from this Session’s disappointing effort toward tax relief:
Over half of the property tax relief, property tax transfer that will be done, would go to the 20% most valuable houses in town. Let me say that again: more than half this money we;re gonna put out is gonna go to the one fifth of the very biggest houses [Rep. Will Mortenson, in Jackson Diercks, “Capitol Restoration, Property Taxes and More,” SDPB, 2026.03.10, timestamp 3:28, transcribed by CAH–DFP].
Rep. Mortenson voted nay on SB 245, which dedicates $55.9 million this year and over $100 million from the impending hike in sales tax from 4.2% to 4.5% every year after to lowering the property taxes homeowners pay to school districts. Mortenson also voted nay on the other major property tax/sales tax swap, SB 96, Governor Larry Rhoden’s plan to allow counties to impose a 0.5% sales tax to lower their property taxes.
Mortenson is right to vote against these unfair transfers of wealth from people buying groceries to people buying mansions. His opposition now contrasts with his advocacy of a straight swap of sales tax for property tax last fall. Last year he touted a plan with the same mechanics: reduce every homeowner’s property tax by a certain percentage by increasing state sales tax by a certain percentage. Perhaps he’d have gotten more traction with his newfound opposition to transferring wealth from landless commoners to landed elites if he hadn’t been pushing that transfer prior to this Session.
That upward transfer is baked explicitly into SB 96: counties that adopt the local ta must allocate all the money they raise “as a credit against the county property tax levy on all property classified as owner-occupied, as defined in § 10-13-39, in an equal percentage.” If counties give 20% back to shacks, they have to give 20% back to mansions. SB 245 is remarkably vague on how the state gets the money into homeowners’ pockets: it directs the state to use the additional sales tax to lower the local funding effort it requires schools to put toward general education, but schools still have to decide how much to lower their levies. Nonetheless, SB 245 does not authorize schools to impose different levies on different value brackets or exempt the first $100K of homes’ taxable value or any other formula that might provide some relief from the effectively regressive, wealth-concentrating tax scheme that Mortenson has recognized is bad.
We should be impressed that the Legislature and the Governor have found the will to raise any taxes… or, in the case of SB 245, to let taxes rise back to where they were three years ago, and in the case of SB 96, to let counties impose a new tax. But the 2026 Legislature is squandering this meager fiscal bravery. The Legislature and the Governor are not investing one penny of the new tax dollars in better roads or bridges or parks or personnel. They’re just pulling more money out of everyone’s pockets and stuffing it into fewer people’s pockets, with the lion’s share going, as Mortenson laments, to pockets that are already full enough to build and buy the nicest houses in town.