South Dakota
Public forum highlights potential property tax political storm • South Dakota Searchlight
RAPID CITY — Some frustrated taxpayers attended a public forum Saturday to tell state officials they’re taking the wrong approach to taxation.
Several of the roughly 100 attendees said legislators and Gov. Kristi Noem should raise the sales tax rate instead of reducing it, and use the money to replace some of the local government revenue currently supplied by property taxes.
“I don’t think there’s any other way around getting our property taxes taken care of unless we raise the sales tax,” said audience member Beth Paulson, of Custer.
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One of the panelists, Donald Olstad, a Hot Springs businessman and former school board member, estimated that a several-percentage-point increase in the sales tax rate could wholly replace property taxes.
“And that would be a great debate,” Olstad said.
But elected officials and some political activists are moving in the opposite direction.
Gov. Kristi Noem started a push for lower sales taxes during her reelection campaign in 2022, when she promised to exempt groceries from the state sales tax.
Legislators rejected that proposal in 2023 and instead adopted their own proposal to reduce the state sales tax rate from 4.5% to 4.2%. The reduction is scheduled to expire in 2027, unless legislators make it permanent.
Meanwhile, a Democratic-led citizen group is circulating petitions to put a measure on the Nov. 4 general election ballot that would remove state sales taxes from grocery purchases.
Sales, tourism taxes discussed
Some forum attendees suggested increasing the state tourism tax. That’s a 1.5% tax on hotels, campgrounds and some other tourism-related activities.
Beyond the state sales tax and tourism tax, cities can impose up to an additional 2% sales tax, plus another 1% entertainment tax on items such as alcohol, restaurants, hotels and events.
Sales tax revenue goes to cities and the state. Property taxes go primarily to counties and schools.
State Rep. Trish Ladner, R-Hot Springs, is trying to convince her fellow legislators to do something about rising property taxes. She introduced property tax relief bills each of the last two legislative sessions in Pierre, with limited success.
She also organized the forum Saturday in a lecture hall on the South Dakota Mines university campus. When discussion turned to raising the sales tax rate in order to reduce or stabilize property taxes, Ladner said it’s an idea worth considering.
“The thing about sales tax, too, is that the tourists would help pay for it. I like that,” Ladner said. “I’m just saying we need to be open to alternative methods.”
Ladner and Olstad were panelists at the forum. Other panelists were Matt Krogman, a Brookings real estate agent and lobbyist for the South Dakota Association of Realtors; Rep. Mike Derby, R-Rapid City; Rep. Dennis Krull, R-Hill City; and Pennington County Commissioner Ron Rossknecht. The moderator was Garth Wadsworth, of the Elevate Rapid City economic development group.
Homeowner taxes up 47% since ’17
Though the two-hour event was civil, many audience members vented their displeasure with property taxes. Statistics from the state Department of Revenue show the property tax burden has fallen increasingly on homeowners and commercial property owners in recent years.
The trend was exacerbated after 2017. Since then, property tax payments have gone up 47% for owner-occupied homes and 36% for commercial property, while rising 3% for agricultural property.
One factor in the trends was a change from market to productivity-based valuations for agricultural land. The implementation period for the change concluded in 2019, after the Legislature adopted it in 2009. At the time, lawmakers were concerned that surging prices for farm and ranch land were unfairly inflating tax valuations.
Another factor was the COVID-19 pandemic, when South Dakota experienced an influx of remote workers and other homebuyers fleeing pandemic restrictions in other states. According to research by the Dakota Institute, high demand for houses helped push the average list price in the state 36% higher from 2020 to 2023, even after accounting for inflation.
Because tax valuations for houses are tied to the market, some South Dakota homeowners have experienced several years of double-digit valuation increases. And those steep valuation increases have driven their property taxes higher.
Olstad said Gov. Noem’s focus on attracting new residents to the state has been a factor in that.
“This probably doesn’t sound right, but I think we should ‘close the gate,’” Olstad said. “I’m not in favor of the governor inviting everybody.”
Other ideas for property tax relief
Raising the sales tax or tourism tax rate wasn’t the only idea floated during the forum.
Multiple attendees encouraged Ladner to reintroduce a failed bill she sponsored during the last legislative session.
The bill would revert property valuations back to their 2020 levels for single-family, owner-occupied homes purchased before then. Excess taxes paid in the intervening years would not be refunded, but future tax increases would be capped at 3%.
One person suggested repealing some of the dozens of sales tax exemptions in state law and capturing the extra revenue for property tax relief.
Some sales tax exemptions are broad, such as the one for items purchased to be resold. Those include packaging for products and items that will become an ingredient or component of another product.
Other exemptions are narrow, such as an exemption for services performed by rodeo promoters, stock contractors, announcers, judges and clowns.
Rep. Derby encouraged greater participation in existing property tax relief programs, which he said are underutilized. Those include help for disabled veterans, senior citizens and people with paraplegia. Applications are available from county directors of equalization or county treasurers.
There was broad agreement at the forum among panelists and attendees that a failure to rein in property tax increases for homeowners could have negative economic consequences for the state.
Krogman, the real estate agent and lobbyist, cited examples of three properties in Brookings that he said experienced year-over-year tax valuation increases from $343,000 to $473,000, from $333,000 to $445,000, and from $322,000 to $432,000.
“I’m just afraid if we can’t figure something out, the opportunity of owning a house is going to become more and more difficult,” he said.
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(SOUTH DAKOTA SEARCHLIGHT) – Democrats are running for 46 of South Dakota’s 105 legislative seats — leaving 56% of seats without a Democratic candidate.
That doesn’t bode well for the party ahead of November, said Michael Card, professor emeritus of political science at the University of South Dakota.
“It doesn’t put them in a position to actually put forward their ideological policy preferences and have much of a success at getting those enacted,” Card said.
In the state Senate alone, Democrats have failed to field a candidate for 22 seats, which is nearly two-thirds of the chamber. In the House, Democrats have failed to field a candidate for 38 seats, which is 54% of the chamber.
There is only one Democratic legislative primary in the state: a state Senate race in District 26, which includes the Rosebud Reservation.
There are no statewide Democratic primaries, after announced candidates for governor and U.S. House dropped out or failed to gather enough petition signatures to make the ballot, leaving one Democrat in each of those races.
Statewide candidates will have less name recognition than Republican candidates ahead of the general election, since they didn’t have primaries, Card said. In the Legislature, Card said Democrats “are guaranteeing they won’t get a majority.”
In contrast, Republicans have primary races for governor, U.S. House and U.S. Senate. Five legislative districts do not have Republican primaries, but do have Republican candidates. There is a Republican candidate running for every legislative seat, except for one House seat in District 27, which includes the Pine Ridge Reservation.
Card said there are several factors leading to poor candidate turnout among Democrats, including a self-fulfilling cycle of failure.
“A lack of winning makes fewer people willing to take a chance on running for office,” Card said. “Why run if I think I’m going to lose?”
Democrats haven’t held a statewide office since 2015, and they haven’t held a majority of either legislative chamber since 1994.
Joe Zweifel, deputy executive director of the South Dakota Democratic Party, said the organization worked “really, really hard” to convince Democrats to run for office.
“But you can’t force people to run for office,” said Zweifel, of Sioux Falls, who’s running for a legislative seat himself in District 12.
He’s heard the open seats called a “failure.” But he disagrees, choosing to focus on the Democrats who did step forward.
“We’re running quality, good candidates in those races,” Zweifel said.
The South Dakota Democratic Party hopes to build on legislative successes, such as a new law from Rep. Kadyn Wittman, D-Sioux Falls, that commits state funding to cover the family portion of reduced-price school meals.
“That specifically is a return on investment for our donors, and it shows that Democrats are doing good things for the people of South Dakota,” Zweifel said.
Wittman’s success helped inspire Democratic District 13 House of Representatives candidate Ali Rae Horsted, of Sioux Falls, to take a second run at the Legislature. Horsted ran unsuccessfully for the Senate against Sen. Sue Peterson in 2024, garnering 42% of the vote.
Horsted plans to build on that success and the name recognition she already has in the district. She hopes she’ll have “better odds” in this election, since there are two House seats for every district.
Horsted said it would better serve South Dakota if the state had a more balanced Legislature. While the latest Legislature was 92% Republican, 52% of voters in South Dakota are Republican. South Dakota has the lowest percentage of Democrats, 7.6%, in the Legislature nationwide.
“I think it’s important that people have options on the ballot,” Horsted said, “and people are able to vote for candidates that represent their values and their vision for the future of South Dakota.”
Makenzie Huber is a lifelong South Dakotan who regularly reports on the intersection of politics and policy with health, education, social services and Indigenous affairs. Her work with South Dakota Searchlight earned her the title of South Dakota’s Outstanding Young Journalist in 2024, and she was a 2024 finalist for the national Livingston Awards.
South Dakota Searchlight is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.
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From East River to West River, South Dakota communities share a common goal: creating places where people of all ages can live, work and thrive. AARP’s Domains of Livability provide a framework to help communities do just that. Through the AARP Community Challenge grant program—designed to spark quick, impactful local projects—South Dakota communities are turning big ideas into visible, people-centered improvements.
Read the South Dakota Community Challenge Grant Report, which showcases grant-funded projects across the state designed to build more livable communities.
What Are AARP’s Domains of Livability?
AARP’s approach to livable communities is rooted in eight interconnected domains that together support quality of life at every age:
- Outdoor Spaces and Buildings – Safe, accessible parks, streets and public buildings
- Transportation – Affordable, accessible options for getting around
- Housing – A range of choices that support independence
- Social Participation – Opportunities to connect, learn and have fun
- Respect and Social Inclusion – Communities that value people of all backgrounds and ages
- Civic Participation and Employment – Meaningful ways to engage and contribute
- Communication and Information – Clear, accessible ways to stay informed
- Community Support and Health Services – Access to services that support well-being
These domains work best when addressed together—something South Dakota communities are embracing.
Turning Vision into Action with Community Challenge Grants
AARP Community Challenge grants fund short-term, “quick-action” projects that can ignite long-term change. Across South Dakota, these grants have helped communities pilot ideas, build momentum and demonstrate what’s possible when residents put people first.
Here’s how local projects are bringing the Domains of Livability to life:
- Outdoor Spaces and Buildings: Communities have used grants to enhance parks, create pop-up public spaces, add benches and shade and install wayfinding signs. These improvements invite people to linger, gather, and enjoy shared spaces—supporting both physical activity and social connection.
- Transportation: Small, thoughtful transportation projects can make a big difference. Community Challenge grants have supported safer crossings, improved walkability and bikeability around key destinations and the planning or installation of transit amenities like shelters and seating—especially important for older adults and people with mobility challenges.
- Housing and Community Support: Some projects focus on helping residents age in place by improving access to information about home modification resources or by testing neighborhood-level solutions that connect people to services. These efforts strengthen independence and peace of mind.
- Social Participation and Inclusion: Murals, community events and creative placemaking projects funded by AARP grants have sparked community pride and social connection. By involving residents in design and implementation, these projects foster respect, inclusion and a strong sense of belonging across generations.
- Communication, Civic Participation and Opportunity: From hosting community conversations to creating new tools for sharing local information, South Dakota communities are using grants to engage residents in shaping their future. These efforts elevate local voices and encourage ongoing civic participation.
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