Assessments again hot topic

Jason Ferguson

One man said his has increased 244 percent since 2020. Another said Custe County is on the fast track to becoming the next Vail, Colo. A third said the county isn’t using all the tools available in its tool chest to make them more equal.
All were talking about property value assessments.
For the second meeting in a row, the Custer County Commission spent a large chunk of time during public comment time watching residents come to the daiss in the commissioner room of the Custer County Courthouse to express emotions ranging from incredulousness to disgust in regards to the property valuations recently received from the county’s Department of Equalization (DOE).
Among those was Andrea Lewis who, just like at the previous meeting, claimed there were steps the commission and equalization office could take to make the property taxes more equitable throughout the county.
Lewis said she had been poring over data for three weeks to study the issue, saying an equal baseline needed to be established, which would allow the county to develop a working plan “to be able to move forward.”
“Appraising the county won’t help if an applicable system isn’t in place,” she said. “My wish for you, commissioners, is to better understand the process that is being used in our county DOE system so you can provide guidance to DOE employees.”
Lewis said other counties achieve equal distribution of taxes by adjusting their system and approach.
“We can also achieve this in our county,” Lewis said.
Lewis said the state gives the county multiple options to distribute the tax burden equally, including a market approach, a per-acre value approach, an income approach and others. The DOE, she said, can utilize any combination of these options to achieve the equality.
Lewis said the county currently uses a tiered market approach for land sales and values. There are areas within geographical locations where land is worth more than other areas, she said, but said outside of a few subdivisions the DOE is simplying applying a blanket value for each township area for land. A township is roughly 23,000 acres.
“Should we really be giving the same land value to all those across the board?” Lewis asked.
Lewis said the DOE has identified certain subdivisions that have land sales that merit a land increase and placed those subdivisions into a separate category. Examples of those subdivisions, she said, include Caldonia Estates, Circle Pines and Crystal Pines at Rocky Knolls Golf Course. She said there are subdivisions determined to have lesser land values as well.
Lewis focused on  Township 3, Range 4, for part of her example. That is the township that contains most of the City of Custer and much the county’s population, as it goes east to Sidney Park Road, to the south to Cross Rd (through Circle Pines and Grey Rocks), west to a portion of Penal Valley Road, north to a portion of Medicine Mountain Road, east across Hwy. 16/385 through Crazy Horse Memorial to just east of Sylvan Lake Road.
Those parcels, she said, have the same tiered value used for high-end subdivisions.
“These are not comparable properties,” she said, saying golf course lots and paved subdivision lots should not be assessed the same way as subdivisions with single-wide trailers and “crappy gravel roads.”
Lewis said recent sales and larger acreages in the immediate Custer area shed light on the inequality, pointing to a sale of 14-plus acres with a log home and a shop with an additional living space for $2 million in August 2022, that the county valued at $1.039 million in 2023. Another similar property, this one with 24 acres, a log home, a shop and two other homes on the parcel sold for $1.3 million, but is assessed at $833,000.
“I believe DOE can work with GIS to develop and identify different mapping areas to alleviate the need for this township umbrella assessment approach by utilizing all the data in our hands from recent market sales. We can apply logic and achieve a better system.”
Lewis said Fall River County has offered to visit Custer County to show how it approaches property values, and that when she applied an adjusted tier structure to Township 3, Range 4, values came in at 91 percent across the board—the number that is the goal for counties.
“It can be done,” she said.
During her talk Lewis said of the 998,000 acres of land in the county, 420,000 is state and federal land which is exempt from taxes. Another 420,000 is being taxed at the much lower agriculture rate, meaning just over 105,000 acres are designated owner occupied, non-ag, commercial, etc. That, she said, means approximately 11 percent of the land is owner-occupied, non-ag and commercial, and those property owners  are paying 91 percent of the county property taxes.
While Lewis pitched going away from the blanket approach, Thomas Veigh didn’t like being singled out in his subdivision off Custer Limestone, saying his assessment doubled from last year, while no one else near him went up more than 30 percent.
“There have been no improvements on my property for 20 years,” he said. “I don’t know if they made a mistake or that’s what they think the assessment is.”
Bruce Dye lives off Hwy. 36 on the eastern side of the county, and said he is concerned about the trajectory of the increase in tax rates in the county.
“I think it’s going to continue to be worse because it has a much greater impact on people who are on a fixed income,” he said.
Dye said he was aware taxes are a product of both assessments and the mil levy, and commended the commission on dropping the mil levy for its budget.
That said, the trajectory must be halted, he said, adding tax dollars is one thing, but how the burden for the tax money gets distributed was another issue.
“We are going to see, in my opinion, a transition from the kind of populous we have had in the past to something more like a Vail, Colorado, or only those who are in a different financial spectrum can live here,” he said. “What is your position on it, and what are you doing about it?”
Dye said since 2020, his assesment has risen 244 percent—from $308,500 to $753,000.
“I just encourage you to look at any number of options or maybe come up with something that hasn’t been tried in the past,” he said.
Commission chairman Jim Lintz said the county is bound by state law, and that attempts to get the state to address the issue continues to fall on deaf ears.
“If we don’t do something, 10 years from now we are going to be looking at a different landscape,” he said.
“We are well aware of the problem,” Lintz said.
Lintz added most of what Dye called “political refugees” who move to Custer County move from states that have an income tax. Dye said it may be time to look at an income tax in South Dakota.
“That’s not very popular,” commissioner Craig Hindle said.


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