Governor Larry Rhoden is already campaigning against the referendum of Senate Bill 245, one of two key pillars of his apparently unpopular compromise property-tax relief plan:
Sales taxes would rise to 4.5% even if the referendum succeeds — that was written into the 2023 bill. Gov. Larry Rhoden told reporters in Sioux Falls on Thursday that opponents seem to miss that.
“What they’re advocating for is just removing property tax relief from the equation,” Rhoden said, noting renters are “going to continue to pay that 4.5% with or without” the new law.
“So, what they’re supporting is nixing the largest property tax reduction we’ve ever seen in the history of South Dakota,” he said [Joshua Haiar, “Opponents Seek Public Vote on SD Law Using Higher Sales Taxes to Drop Property Taxes,” South Dakota Searchlight, 2026.04.30].
No, Larry, the backers of this referendum aren’t missing anything. They understand that the state sales tax is scheduled to go up with or without SB 245. They just think it’s a bad investment to hand that scheduled increase to one special interest group with a tax break that goes mostly to the owners of the fanciest houses in town. They think that instead of springing that regressive plan on voters with a hoghouse amendment the second-to-last week of Session, you should have a longer conversation with voters about how to use those sales tax dollars to provide the greatest benefit to all South Dakotans.
Besides, even if referring and killing SB 245 doesn’t repeal the sales tax increase, you can bet that if voters say No to SB 245 in November, the new legislators and new Governor they send to Pierre will have that No echoing in their ears all through the 2027 Session. Those new leaders will have a vigorous conversation about what to do with those extra three-tenths of a percentage point—over $100 million a year—and that conversation will include reconsidering whether to take that money in the first place or just leave the sales tax at 4.2%.