Task Force Recommends $348 Million in Property Tax Relief, Including Spending Cuts and Rebates.

South Dakota Legislature discusses potential tax relief measures as highlighted by Northeast Radio SD, shown with a calculator, documents, and a pen symbolizing financial planning and legislative action.

Northeast Radio SD News – South Dakota - The Comprehensive Property Tax Task Force has finalized a set of recommendations designed to deliver over $348 million in property tax relief to South Dakota homeowners, representing an estimated 25% cut. The plan, announced by Task Force Chair, Senate President Pro Tempore Chris Karr, and Vice Chair, Speaker of the House Jon Hansen, focuses on combining immediate homeowner relief with long-term fiscal reforms.

The recommendations, which the task force will bring before the 2026 Legislative Session, are centered on three primary funding mechanisms for property tax reduction:

· Immediate Relief Rebate: A one-time $120 million tax rebate would be delivered directly to homeowners using collected but unspent state funds.

· Government Spending Cuts: A proposed 5% reduction in state government spending is projected to save $123 million, which the task force recommends be entirely dedicated to reducing homeowner property taxes. The task force has requested collaboration from the executive branch to implement the necessary cuts.

· Sales Tax Revenue Allocation: The task force proposed directing 100% of an anticipated $105 million increase in sales tax revenue—resulting from the “sunset” of the current sales tax rate—to homeowner property tax reduction.

To ensure the tax changes are permanent, the task force also recommended a framework to allocate 25% of future state revenue growth to replace property tax revenue, allowing relief to grow alongside the state's economy.

"This plan provides critical, long-term reforms that finally reduce the burden of property taxes on families while still funding local services and honoring our commitments to seniors and veterans," said Senator Karr. "It's time to make tax cuts a priority for property owners."

Representative Hansen echoed this focus on fiscal discipline, stating, "Real tax relief begins with right-sizing government. Ending the excessive strain of high property taxes on South Dakota homeowners is a top priority, and these recommendations are a big step forward in bringing about needed relief for South Dakotans."

Additional recommendations passed by the task force include:

·  Expanding current tax relief programs for seniors and disabled veterans.

·  Requiring elections for local government "opt-outs" or bond measures that would increase taxes.

·  Establishing electronic filing to make tax relief application processes faster and more accessible for taxpayers.

·  Directing all video lottery revenue to education to alleviate the financial burden on local taxpayers.

·  Implementing new limits on public school spending for capital projects.

House Majority Leader Scott Odenbach praised the members for their dedication and expressed optimism for the upcoming session. "I look forward to seeing how both the executive and legislative branches can work together to prioritize tax relief during the 2026 Legislative Session," he said.

The task force membership included legislators from across the state, including Senator Glen Vilhauer of Watertown. The complete list of recommendations is available on the Legislative Research Council website.