Proposing and submitting to the voters at the next general election an amendment to the Constitution of the State of South Dakota, limiting the assessed value of real property and limiting real property taxes.
Summary
SJR505 is a proposed constitutional amendment that would be submitted to voters at the next general election. It would change Article XI of the South Dakota Constitution to limit how much the assessed value of real property can increase each year, capping annual adjustments at no more than 2 percent by law beginning with the 2027 assessed valuation as the base year. The measure also allows additional adjustments when property changes use, ownership, or classification, or when improvements, damage, or destruction affect the property’s value.
The resolution would also place a constitutional limit on real property taxes by providing that the maximum amount of all ad valorem taxes on real property may not exceed 1 percent of assessed value. That tax cap would not apply to ad valorem taxes or special assessments used to pay debt service on indebtedness approved by voters before July 1, 2028. Because this is a joint resolution, it does not itself change tax law directly; instead, it proposes a constitutional amendment for voter approval, which would then constrain future state and local property tax assessment and taxation practices.
Impact
If approved by voters, SJR505 would amend the state constitution and require assessors and taxing authorities to follow a new statewide framework for real property valuation and taxation. It would limit annual assessed-value growth, establish 2027 as the base year for the new assessment procedure, and cap total ad valorem taxes on real property at 1 percent, subject to the stated exception for certain voter-approved debt. The measure would affect property owners, counties, school districts, municipalities, and other local taxing entities that rely on property tax revenue, and it would likely require implementing legislation and administrative changes to assessment practices.
Sentiment
The available voting history suggests mixed to negative committee sentiment, with the bill failing on a 3-6 do pass vote and earlier receiving a tied 4-4 vote on a do pass amended motion. The later motion to defer to the 41st legislative day passed 5-4, indicating the proposal remained alive procedurally but without clear committee support. No transcript discussion was provided, so the record shows procedural movement and divided votes rather than a strong consensus either for or against the measure.
Contention
The main point of contention is the bill’s effect on property tax revenue and local government finance. Supporters are likely focused on limiting rapid assessment growth and reducing property tax burdens for homeowners and other real property owners, while opponents are likely concerned that a 1 percent cap and a 2 percent annual assessment limit could constrain revenue for schools, counties, cities, and special districts. The exception for voter-approved debt issued before July 1, 2028 may also be significant, because it preserves some existing obligations while still limiting future tax growth, but it does not eliminate concerns about reduced flexibility for local taxing authorities.
Proposing and submitting to the voters at the next general election an amendment to the Constitution of the State of South Dakota, limiting the assessed value of real property and limiting real property taxes.
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