Response to the Person’s Concern (School Funding)
Hi there! Thanks for asking about our plan to get rid of property taxes in South Dakota—I’m glad you think it sounds cool! Let’s clear up a couple of things so you can see how this works for you and our schools.
You mentioned hearing that you’d pay 2.5% on every purchase, and you’re wondering if that’s worth it to get rid of property taxes. I totally get why you’d want to make sure this doesn’t hurt your wallet or our schools. Here’s the good news: you won’t actually pay 2.5% on every purchase you make. The Gross Receipts Tax, or GRT, is a tax businesses pay on their total sales—not something you pay directly as a customer. Businesses might pass on a tiny part of that cost through prices, but it’s small—like 25 cents extra on a $10 purchase. That’s less than what you’re already paying with the current sales tax, which can be up to 4.5% or more with local taxes. Plus, things you need most, like groceries, healthcare, and utilities, are completely exempt from the GRT, so you won’t see any price increase there.
Now, the really cool part: if you own a home, you’ll never pay property taxes again. That could save you hundreds or thousands each year—maybe $3,000 to $5,000 if you live in a place like Sioux Falls with a higher-value home. Even if you don’t own a home, you’ll likely save because renters might see smaller rent increases since landlords won’t have to pay property taxes either. So, you’re saving a lot more than any small price bump from the GRT, and you’ll have more money in your pocket to spend on what matters to you.
You also asked about school funding—that’s a great question, and I’m happy to reassure you. Right now, schools get about $960 million a year from property taxes, which is a big part of the $1.6 billion we collect. Our plan makes sure schools don’t lose a penny of that. The GRT will bring in $1.8 billion—$200 million more than we need—so there’s no chance of a shortfall. We’ve legally locked in that $960 million for schools, adjusted for inflation, so they’ll always have what they need. If something unexpected happens, the state has to use other funds—like sales tax money—and cut non-essential spending first, not schools or services like roads and police. So, your schools are safe, and your kids will still have the resources they need.
Let’s put this into a real-life scenario to show why this plan gives you more freedom. Say you’re part of a typical South Dakota family with a home. Right now, you might be paying an extra $400 a month in property taxes—either as part of your mortgage payment or as a big bill at the end of the year. That’s $4,800 a year, and it’s a heavy burden, especially if money’s tight. With our plan, you’d pay $0 in property taxes—saving you that $4,800 every year. Instead, you’d see a small 2.5% GRT passed on through prices on some purchases. Let’s say you spend $500 a month on things like clothes, dining out, or other non-exempt items—that’s $6,000 a year. The GRT might add 2.5% to those purchases, which is $150 a year ($6,000 × 2.5%). So, you’re saving $4,800 on property taxes and only paying an extra $150 through the GRT—that’s a net savings of $4,650 a year! You’d rather pay that small percentage now than keep facing that large property tax bill, right? And here’s the liberty part: with property taxes gone, you’re free from the worry of losing your home if you can’t pay, and you keep more of your money to spend how you choose—not how the government decides.
This plan is all about giving you tax freedom while keeping our communities strong. You’ll save on property taxes, and any extra GRT money we collect will come back to you as a rebate at the end of the year—about $325 per voter with the $200 million surplus. If you’d like to learn more, check out our full plan at sealsd.com/constitutional-amendment, or join us on April 19, 2025, when we kick off our signature collection campaign to get this on the ballot. We’d love to have you on board!