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Spearfish Valley Annexation Won’t Raise Property Taxes Above Madison Rates

Spearfish is renewing its push to annex the Upper and Lower Valley, the populous yet tranquil and quasi-agricultural neighborhood on the north side of town between Black Hills State University and Exits 8 and 10 of Interstate 29 (see map here). Valley residents signaled their widespread opposition to annexation last fall with a petition drive. They also delayed annexation by catching the city in a legal error (the city did not include all of the land it sought to annex in its annexation study).

Valley residents have various reasons for opposing annexation: the threat to vital agricultural land serving Spearfish's thriving local foods market, increased traffic as the city would turn some cul-de-sacs into through streets, political grudges over past power grabs, and (likely the primary reason for most folks) increased taxes.

Lawrence County documents estimate the assessed value of Upper and Lower Valley to be more than $76 million, generating nearly $232,500 in property taxes. An average home in the study area is valued at $160,000. Taking into account the current mill levy of 3.019 per $1,000, property owners pay just under $770 in taxes each year. If annexed, Upper and Lower Valley residents would pay $475 in [city] taxes each year [Heather Murschel, "Annexation Solution to Steady Growth," Black Hills Pioneer, 2013.06.20].

A 61% jump in one's property tax bill is nothing to sneeze at. But let's put the levy in perspective by comparing Lawrence County taxes with Lake County taxes. My Lake Herman property is valued at under $140K, below the Spearfish Valley average value. I pay $1,780 in property taxes to the sheriff, the county plow, and the school district to maintain civilization.

My brother lives within Madison city limits. He owns a house valued I think around $90K. (You can't get a house for that price in Spearfish.) With Madison city taxes on top of the county and school district levy, he pays $1,770 in property taxes.

Monkey with the proportions there, and I figure that if Madison annexed Lake Herman, my property tax bill would increase to about $2,750. That's only a 55% increase... but if my figures are right, the city of Madison would charge me about $970 for the privilege of voting in their elections and pooping in their pot, more than double the city tax that Spearfish Valley residents with more expensive houses will pay to Spearfish if annexed.

I'm not saying Valley residents should roll over and accept annexation and higher taxes. I'm just noting that things could be worse: Lawrence County and Spearfish could start taxing residents at Lake County and Madison rates.


  1. John 2013.06.23

    It's a doughnut hole long past any reasonable annexation date. Merely grandfather most present ag uses, taxing the same on those uses and not on some fictional "development" potential.

  2. caheidelberger Post author | 2013.06.23

    Mayor Dana Boke hinted vaguely at such accommodation of the Valley's agricultural tradition while campaigning this spring. The new annexation study makes these comments relevant to annexation, development, and agriculture:

    "...the annexation of this area would provide an available supply of land for growth opportunities within the context of existing public services" [p. 11]

    "Another important decision that should be made at the time of annexation is to encourage the preservation of existing gardens, small farms, and farmers markets by allowing these properties to be zoned Agriculture, if the owners request this zoning. Curently these lands are zoned suburban residential by the county, more as an indicator of their potential land use versus their existing land use. An laternative to rezoning would be to create a special agriculture related overlay district onto these lots that eliminate the ability for subdividing, housing, etc." [pp. 45–46]

    On the one hand, the city and developers see the benefit of compact residential development (easier than running water lines and streets out to sparse neighborhoods). On the other, pp. 45–46 acknowledge the possibility of protecting those ag uses. Which way will the city go?

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