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Voters Nixed Four Property Tax Caps Before 1995 Legislation; Governor Opposes Repeal

Last updated on 2015.02.16

There is another sign that House Bill 1216, the repeal of the property tax cap, will not pass: the Governor doesn't support it. He sent Mike Houdyshell from the Department of Revenue to offer the only opponent testimony in House Taxation yesterday.

Houdyshell defended the property tax cap as the product of voter demands expressed through a series of ballot initiatives. Houdyshell listed four initiated measures that he said represented a popular revolt against property tax increases, which averaged 6% a year from 1947 to 1995:

Year Measure Provisions Vote Yes Vote No
1980 Constitutional Amendment B (“Dakota Proposition”) set maximum property tax at 1% of full and true value 37% 63%
1988 Constitutional Amendment C (“Dakota Proposition 2”) set maximum property tax on ag land at 1%, non-ag land at 2.5%, based on 1984 values 39% 61%
1990 Constitutional Amendment E set maximum property tax increase at 2% per year 45% 55%
1994 Initiated Measure 1 set maximum property tax at 1% of assessed value; freeze assessments at January 1 1995 level; allow no increase in assessed value except in change of ownership or new construction; cap increases at 1.25% 49.45% 50.55%

As Houdyshell notes, momentum was building for limits on property tax. But none of these four initiatives passed. At no point up to 1995 did the voters express the will to impose the caps that Governor Janklow and the Legislature made law in 1995. Yet Houdyshell portrayed the statutes he came to defend against HB 1216 as an expression of the popular will with which twenty years later we should not tinker.

Wow. We Democrats have only asked for the Legislature to keep its hands off initiatives that actually pass for one year (and House State Affairs killed that proposal, HB 1175, 10–2 yesterday). The Governor's office tells the Legislature it should respect the apparent momentum of four initiatives that failed decades ago.

But hey, maybe the Legislature agrees that it should not cross the popular will. As Bob Mercer reports, the House has soundly rejected one GOP effort to change the minimum-wage initiative voters passed last November. One down, one to go....


  1. Lanny V Stricherz 2015.02.11

    As I keep asking myself, why do I stay in this backward state that does it all for the haves at the expense of the have nots? And incidentally I count myself as a former not a latter, but I have a conscience.

  2. mike from iowa 2015.02.11

    Here's a quote from none other than dumbass dubya that sums it up rather poignantly-29. "This is an impressive crowd -- the haves and the have mores. Some people call you the elite -- I call you my base." --at the 2000 Al Smith dinner

    From the 50 top dumbest GW Bush quotes.

  3. Richard Schriever 2015.02.11

    California voters actually passed that sort of capping amendment embodied in the 1994 bill under Reagan in 1978 (Prop 13) - and look where that got them. Of course, they also have a constitutional prohibition on the legislature tampering with IMs. EVER. Maybe also a bad idea.

  4. rollin potter 2015.02.11

    I am writing this in hurry but I got a note with my real estate notice for the year of 2013.
    Quote, the assessed valu on record for this year of $00,000 has increased by 20% over last years valu of $00,000. Now tell me that the law is being upheld when you say the law says the cap is %3 ???? IF i go back to my 2011 records my taxes have increased accordingly ? this is one block of land I picked at random!!!

  5. rollin potter 2015.02.11

    sorry for not proof reading but that should be $000,000 not $00,000 and not a ? at end of accordingly! Running mouth before putting whatever brain I have in gear!!!!!

  6. Donald Pay 2015.02.11

    Yeah, I find that to be pretty tortured logic. If you're going to oppose the bill, have some real reasons.

    My feeling about the bill is that they could simply make the caps more tuned to today's situation. The caps were a stop gap measure meant to address a late-1980s to mid-1990s issues. At the time increased costs were incurred by local government who were switching over to new technology. There was a significant increase in property taxes as a result, and a pushback by property taxpayers.

    The state could have adopted an income tax and instituted property tax reform, but that didn't happen. There was a large number of Democrats in the Legislature during some of those years. Although there were attempts to pass an income tax for property tax reform and education funding, it never had a chance without leadership from the Governor. Governor Mickelson thought gambling money and economic growth (gold mining, garbage dumps) would bail him out, but it was clear by the first year of the second Janklow regime that gambling, gold and garbage weren't a replacement for a rational tax policy.

    Like the gambling, garbage and gold companies, Janklow's caps and education formula were a desperate roll of the dice imported from elsewhere. They really didn't have South Dakota roots, and they had relatively little thought behind them than that it was a desperate attempt to meet a campaign promise in 1994.

  7. caheidelberger Post author | 2015.02.11

    Donald, were those campaign promises just an effort to put an end to the tax-reform initiatives?

  8. Donald Pay 2015.02.11

    Well, partly, yes. There were also legislative bills on the same subject during that time, and a pretty cohesive citizen effort behind the initiatives and the bills. A lot of the legislative ideas were generated from out-of-state, copied from California or Oregon, and mostly righty-oriented. But, there were enough people fed-up with increasing property taxes that it had mass appeal.

    I think Mercer has written about this saying, the thought then was pretty bi-partisan: property taxes needed to be reigned in. Both Janklow and Beddow were promising to do that, because the 1994 Initiative seemed pretty extreme, but almost passed.

  9. grudznick 2015.02.11

    Mr. Pay, most of it was set up to facilitate putting a nuclear waste dump in Pringle. When that plan failed, the fundamentalists moved in and built a temple.

  10. Donald Pay 2015.02.12

    Generally, Grudz, I don't comment on your silly posts, but you've confabulated the first Janklow governorship with the second one, and you've got the wrong town, even the wrong county. But, Chem-Nuke was looking at lots of west river locations in South Dakota, so maybe you know something I don't.

  11. Francis Schaffer 2015.02.15

    So someone set me straight, teachers' salaries are a local responsibility; yet the main instrument for revenue(property tax) is capped at the state level?

  12. Lanny V Stricherz 2015.02.15

    Finally, someone saying what I have been saying for years. And then now to top it off, they want to add another sales tax to pay for the teacher pay increase that they are thinking about giving teachers. Of course that money would just go into the general fund again and they would find some way to funnel it into their corporate commanders hands instead. And who gets stuck percentage wise with the greatest tax increase? Those who already have to spend their entire income just to subsist.

  13. Francis Schaffer 2015.02.15

    A sales tax which increases from 4% to 5% is a 25% tax increase.

  14. Lanny V Stricherz 2015.02.15

    Thanks Francis, I am glad that you get it.

Comments are closed.