Plans continue for property tax relief

Jason Ferguson

For a few years now, the Custer County Commission and residents of Custer have been talking about the need to do something about skyrocketing property values. In the past few weeks, however, that talk has turned into action.
That was again evidenced at the April 27 meeting of the Custer County Commission, when property values and property taxes were again a large topic of discussion, only this time there were ideas floated as to how to turn the tide against the constant spikes.
Commission chairman Jim Lintz said he plans to go before the special tax committee created at the state level to pitch an idea as to how to find property tax relief, one that would see a sales tax implemented that would help fund education as opposed to the current school funding formula, which he described as “broken.”
“If we are going to fund differently we have to come up with a source to replace that funding,” he said. “I would suggest we do it with a sales tax.”
Lintz said moving back to a system where schools are funded per student could be ideal, adding that would include private school students.
“Those parents are paying the same taxes and they would be paying the same sales taxes,” he said.
“I feel every student in this state would be entitled to money from that sales tax income,” he said. “To me, that’s the only way we can go because I can’t think of another funding source.”
With a sales tax, Lintz said, everyone helps fund the tax. An income tax will never get passed at the state level, he said.
The state is supposed to cover 50 percent of the cost of education, Lintz said, but because of the funding formula, states with higher property values receive little to no money from the state for education. Theoretically, this sales tax would allow less property tax money to be shipped to the school, which in turn would allow the commission to lower mill levies. That, in turn, could lower property taxes.
“You can’t assume people are wealthier than they were five years ago because their house is worth more money,” he said.
David Reid, who has been upset about his rising property values for the past few years, said he asked Department of Revenue deputy secretary David Wiest at the recent taxpayer forum how it is possible to do double assessments on land, saying he’s paying taxes on money he has never seen.
“How is that constitutional?” he asked.
The county just finished its appeals process for its property assessments, and spent three days in those appeals.
“People are starting to understand it’s not the county raising their taxes and values,” commissioner Mark Hartman said. “They are understanding we know it’s a problem and we are trying to find a solution. There are a lot of good ideas, but we have to make it happen. People are involved and they are getting educated.”
Lintz said the assessment procedure in the county is also broken, due to the number of people moving to the county willing to pay exorbitant amounts of money for land and homes.
“As our assessments go up our amount of money from the state lowers because of the school funding formula,” he said. “We are telling people who live in a home that has doubled and tripled in value they are wealthier than they used to be because the value is going up at their neighbors.”
Because of that, Lintz said, people are being taxed at an amount greater than their ability to pay.
“A tax can’t sustain itself when you tax people greater than they can pay,” he said.
Lintz said when he was in the legislature and worked with former governor, the late Bill Janklow, to fix skyrocketing property taxes on agriculture land, it was done in a manner as to guarantee it would not shift the tax burden to non-ag land. He said that guarantee is no longer viable because of the spiking values.
“We have to address it,” Lintz said.
There was also discussion about the funding given by the state for education, which was around $640 million. Unfortunately for the Custer School District, it usually receives little to none of that money because of the district’s property values.
The counter argument against going against the funding formula will be that it takes away from the smaller schools, it was theorized, but a hybrid-type funding that includes some sales tax and property tax could also be feasible.
“I know we have been accused of not doing anything, but we are trying to do something,” Lintz said. “I think it’s important as we go along we come up with a solution to work toward. Everyone gets together and asks what should we do, but at some point you have to focus on what we should do.”

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