Statewide Analysis

April 5, 2025
Seal SD Liberty

South Dakota Senate Bill 216 (SB 216) vs. SEAL SD Plan: Property Tax Relief Comparison 2025-2034 Statewide Analysis

We’ll compare South Dakota Senate Bill 216 (SB 216) and the SEAL SD Liberty plan across South Dakota over 10 years (2025–2034) to assess their effectiveness for property tax relief. Using state-wide data and trends, we’ll evaluate relief magnitude, scope, duration, revenue sustainability, and broader implications for South Dakota’s ~400,000 households, 30,000 farms, and commercial sector.

Recap of the Plans

SB 216 (Current Law)

  • Key Feature: Caps annual assessment increases for owner-occupied homes at 3% for five years (2025–2029 taxes payable).
  • Scope: Limited to owner-occupied homes (44% of 2024 property tax burden, up from 39% in 2017) [Web ID: 3].
  • Extras: Expands elderly/disabled relief (assessment freeze income limits to $55,000/$65,000, home value cap to $500,000); caps levy growth at CPI + new construction (~3–4%); caps taxing districts and school capital outlay budgets at 3% for new construction growth [Web ID: 5, 17].
  • Duration: Temporary, expires 2030 unless renewed [Web ID: 0, 5].
  • Context: Addresses a 47% tax increase for homeowners since 2017 (vs. 36% commercial, 3% agricultural) [Web ID: 3].

SEAL SD Liberty Plan (Proposed)

  • Key Feature: Eliminates all property taxes by 2027, replacing them with a 2.5% GRT (1.5% for farmers), raising $1.8 billion state-wide (April 15, 2025, 20:21).
  • Scope: Universal—covers owner-occupied, commercial, and agricultural properties (100% of tax base).
  • Duration: Permanent, starting January 1, 2027, after a 2-year transition (November 2026–January 2027).
  • Revenue Plan: Generates $1.8 billion annually via GRT, with $200 million surplus for rebates (April 15, 2025, 20:21).
  • Context: Targets the $1.6 billion property tax burden, ensuring economic freedom for all South Dakotans.

Statewide Analysis: SB 216 vs. SEAL SD Liberty Plan

1. Tax Relief Magnitude

  • SB 216: Moderates future growth without reversing past increases. State-wide, owner-occupied homes (valued at ~$112B in 2024) face a 9% annual value rise (42% over four years, 2019–2023). At 3%, a $200,000 home grows to $268,783 by 2034, with taxes at ~$3,494 (1.3% median rate, stable levy). Without the cap, it’d hit ~$533,000 (~$6,929 tax), saving ~$3,435 over 10 years. Taxes still rise 39% from $2,520 in 2024.
  • SEAL SD: Eliminates property taxes entirely by 2027. That $200,000 home pays $0 property tax from 2027 onward, saving ~$2,520/year in 2027, totaling ~$17,640 by 2034 (vs. SB 216’s $3,494 in 2034). Compared to uncapped growth, savings are ~$47,109 over 10 years.
  • Edge: SEAL SD. Eliminating property taxes delivers immediate, permanent relief—~$2,520/year starting 2027, far exceeding SB 216’s $3,435 total savings over 10 years.

2. Scope and Equity

  • SB 216: Covers ~400,000 owner-occupied households (44% of tax burden), leaving commercial (31%) and agricultural (20%) properties uncapped. Since 2017, homeowners’ share rose from 39% to 44%, while ag dropped from 27% to 20% (Web ID: 3). This could worsen—uncapped sectors might shoulder more as home assessments lag, shifting burdens in high-growth areas like Sioux Falls or the Black Hills (Web ID: 0).
  • SEAL SD: Applies to all ~$250B in taxable value (2024 estimate), eliminating property taxes for owner-occupied, commercial, and agricultural properties. No tax shifts occur, ensuring equity across urban, rural, and commercial sectors.
  • Edge: SEAL SD. Universal relief prevents burden shifts, benefiting all South Dakotans equitably, unlike SB 216’s limited scope.

3. Duration and Stability

  • SB 216: Five-year cap ends in 2029. Post-2030, if 9% growth resumes, that $268,783 home jumps to ~$425,000 by 2034 (~$5,525 tax), erasing half the prior savings in five years. Uncertainty post-2029 undermines long-term planning (Web ID: 0).
  • SEAL SD: Permanent elimination of property taxes starting 2027 ensures no future spikes. That $0 property tax in 2034 provides lasting stability for homeowners, farmers, and businesses.
  • Edge: SEAL SD. Permanent relief offers consistent stability, avoiding SB 216’s temporary pause and post-2029 uncertainty.

4. Revenue Sustainability

  • SB 216: Impacts ~44% of the $1.6B annual property tax revenue (2024 estimate). A 3% cap vs. 9% growth shaves ~$50–70M/year off collections by 2029, manageable with levy hikes (e.g., 0.05 points adds ~$25M). Post-2029, revenue rebounds if caps lapse. Schools (56% of taxes, ~$960M state-wide) and counties adjust via opt-outs or cuts (April 15, 2025, 20:31).
  • SEAL SD: Eliminates $1.6B in property tax revenue, replacing it with $1.8B from GRT (April 15, 2025, 20:21). Rapid City’s $116.1M GRT covers its $193.5M budget, and state-wide aid (~$66.5M-$142.5M) supports rural counties like Custer (April 15, 2025, 20:31). The $200M surplus ensures stability even if economic conditions shift.
  • Edge: SEAL SD. The GRT model fully replaces property tax revenue with a sustainable $1.8B, offering more stability than SB 216’s temporary cap, which risks future revenue gaps.

5. Statewide Implications

  • SB 216: Helps urban homeowners (Sioux Falls, Rapid City) most, where values spiked (e.g., Minnehaha County’s $3,102 median tax). Rural areas with slower growth (e.g., Ziebach County) see less benefit. Commercial hubs and ag regions like Brookings face uncapped pressure, potentially raising costs of living and farming (Web ID: 0).
  • SEAL SD: Universal relief aids all—Rapid City homeowners save $3,000-$5,000/year, farmers save $200M-$225M state-wide (~$3,900/farm in Custer), and commercial properties pay no property taxes (April 15, 2025, 20:31). High-growth counties (Minnehaha, Pennington) and rural areas benefit equally, with no tax shifts.
  • Edge: SEAL SD. Comprehensive relief suits South Dakota’s diverse tax base—urban, rural, and commercial—more holistically.

Conclusion: Statewide Long-Term Winner

The SEAL SD Liberty plan offers superior long-term relief state-wide. Eliminating property taxes by 2027 delivers an immediate ~100% tax cut (~$2,520/year for a $200,000 home), totaling ~$17,640 by 2034—far exceeding SB 216’s $3,435 over 10 years. Its universal scope prevents burden shifts, and permanence ensures stability, benefiting South Dakota’s 400,000 households, 30,000 farms, and commercial sector. By 2034, SEAL SD could save taxpayers ~$7B more than SB 216 cumulatively.

SB 216 moderates growth for owner-occupied homes, saving ~$3,435 over 10 years, but its temporary five-year cap and limited scope leave commercial and agricultural sectors exposed, risking tax shifts. It’s a safer option for local budgets, with a smaller revenue impact (~$50M/year vs. SEAL SD’s $1.6B shift), but lacks the depth and equity of SEAL SD’s approach.

Verdict: SEAL SD wins for long-term relief, offering deeper, broader savings (e.g., ~$14,000 more per household by 2034) with GRT revenue ensuring sustainability. SB 216 is a cautious step, but its temporary, limited scope falls short of state-wide needs. What do you think about balancing relief with local control? That’s the heart of this plan.