Cost Analysis: How We Raise $1.8 Billion

April 14, 2025
Seal SD Liberty

How Our Plan to End Property Taxes Raises Enough Money—and Why You Deserve Tax Freedom

South Dakotans Deserve Relief from Property Taxes

Property taxes drain $1.6 billion every year from South Dakota homeowners, putting families, farmers, and small businesses at risk of losing their homes and livelihoods. Jerry Odom’s campaign for governor is built on a bold promise: end property taxes for good and replace them with a fair Gross Receipts Tax (GRT). Skeptics might worry about revenue with exemptions for businesses under $100,000, groceries, and critical care services like medical. Let’s break down the numbers, show how this plan ensures fiscal stability state-wide, and explain why you deserve this tax freedom.

The Plan at a Glance

Our amendment will:

  • Permanently eliminate property taxes by January 1, 2027, saving South Dakotans $1.6 billion annually.
  • Replace that revenue with a 2.5% GRT on business sales (1.5% for farmers), generating $1.8 billion—$200 million more than needed.
  • Exempt businesses with gross receipts under $100,000, protecting 45% of South Dakota businesses (39,150).
  • Exempt essentials like groceries, healthcare, and utilities, keeping your necessities affordable.
  • Return excess funds as rebates—up to $325 per voter from the $200 million surplus.
  • Start with a smooth 2-year transition (November 2026–January 2027), ensuring no disruptions to schools or services.

Cost Analysis: How We Raise $1.8 Billion State-Wide

Here’s how the GRT plan raises more than enough money, even with exemptions, to replace the $1.6 billion currently collected from property taxes, funding schools and essential services across South Dakota.

Total Revenue Needed

Property taxes currently bring in $1.6 billion annually, funding:

  • Schools: ~$960 million state-wide, including ~$84 million for Rapid City (April 15, 2025, 20:31).
  • Essential Services: Roads, police, and other local services, like Rapid City’s $22.4 million for police and $11.2 million for roads.

GRT Revenue Generated

The GRT at 2.5% (1.5% for agriculture) will bring in $1.8 billion annually—$200 million more than needed. Here’s the breakdown:

  • Tourism: South Dakota’s tourism industry generates $4 billion in sales each year (e.g., Sturgis Rally, Mount Rushmore). At 2.5%, that’s $100 million.
  • Manufacturing: Manufacturing businesses contribute $2 billion in sales. At 2.5%, that’s $50 million.
  • Agriculture: Farmers generate $5 billion in sales, taxed at a reduced 1.5% rate, yielding $75 million.
  • Other Sectors (Retail, Services, etc.): After exemptions, other sectors contribute $69 billion in taxable sales. At 2.5%, that’s $1,575 million.
  • Rapid City Contribution: Rapid City alone generates ~$116.1 million (~$77 million from retail/tourism, ~$355,000 from farms), showing how urban areas contribute significantly to the state-wide total (April 15, 2025, 20:31).
  • Total: $100M (tourism) + $50M (manufacturing) + $75M (agriculture) + $1,575M (other sectors) = $1,800 million ($1.8 billion).

How Exemptions Work Without Losing Revenue

With exemptions for businesses under $100,000, groceries, and medical services, here’s how we still raise $1.8 billion:

  • Business Exemptions: About 45% of South Dakota’s 87,000 businesses (39,150) have gross receipts under $100,000 and are exempt, removing $10 billion from the taxable base. But that leaves $69 billion in taxable sales from larger businesses across retail, services, and other sectors. For example, Rapid City’s $116.1 million GRT shows how urban centers contribute significantly even with exemptions (April 15, 2025, 20:31).
  • Exempting Essentials: Groceries, healthcare, and utilities are exempt to protect your wallet, but these exemptions don’t significantly reduce the taxable base. Most GRT revenue comes from non-exempt sectors like retail, dining, and tourism—not your grocery or doctor bills.
  • South Dakota’s Economic Strength: Our state’s GDP is around $70 billion, and business gross receipts are a large portion of that. Even after exemptions, the $69 billion taxable base (plus $5 billion from agriculture) is achievable. Ending property taxes will also boost economic activity—more spending, more businesses, more GRT revenue over time, as seen with Rapid City’s $10M-$15M in new sales (April 15, 2025, 20:31).

Why Tax Freedom is Economic Freedom

Tax freedom isn’t just about saving money—it’s about giving you the freedom to thrive. Here’s how this plan delivers economic freedom for South Dakotans:

  • More Money in Your Pocket: Homeowners save $1.6 billion annually—$3,000 to $5,000 per household in Sioux Falls and Rapid City (April 15, 2025, 20:46). Farmers save $200M-$225M net each year, with an average of $3,900 per farm in places like Custer (April 15, 2025, 20:31). That’s money you can spend, save, or invest in your future.
  • Real Impact for Rapid City: In Rapid City, Sarah saves $3,500/year, paying off her mortgage 7 years early, saving $70,000 in interest. Mike saves $2,500/year, clearing $15,000 credit card debt in 5 years, saving $9,000. Lisa, a business owner, saves $5,000/year, cutting her shop loan by 4 years, saving $50,000. Tom saves $3,000/year, paying off $20,000 equipment debt by 2028, saving $3,500 (April 15, 2025, 21:16).
  • Businesses Thrive: Businesses under $100,000 pay nothing, and larger businesses save on property taxes ($5,000–$50,000/year in Rapid City), fueling growth. More businesses mean more jobs, more opportunities, and a stronger economy for everyone.
  • Rebates Empower You: The $200 million surplus means up to $325 back per voter. Your money stays with you—not the government—giving you the freedom to choose how to use it.
  • No Risk, All Reward: Schools get their $960 million, locked in by law (Section 2(c)), with Rapid City contributing ~$84 million (April 15, 2025, 20:31). Services like roads and police are safe—Rapid City’s $22.4 million for police and $11.2 million for roads are fully funded. The $200 million buffer ensures no cuts, even if the economy slows.

You Deserve This Relief

South Dakotans work hard—you shouldn’t live in fear of losing your home to property taxes. For too long, families, farmers, and seniors on fixed incomes have carried the burden while the establishment benefits. This plan puts you first, with safeguards to keep government in check:

  • GRT capped at 2.5%, sales tax at 4.5%—no increases without your two-thirds vote (Section 2(b), 2(g)).
  • Extra funds returned as rebates—up to $325 per voter (Section 2(f)).
  • DOGE-SD measures like zero-based budgeting, public audits, and a citizen oversight committee keep things honest, preventing past mismanagement seen in counties like Custer and Fall River (Section 5, April 15, 2025, 14:00).
  • Property taxes can’t come back without a two-thirds voter approval (Section 6(a)).

Join the Movement

We’re not waiting for the establishment to act—we’re taking this directly to you, the people. Join us on April 19, 2025, at the Liberty Forum in Rapid City to learn more and help get this on the November 2026 ballot. We need 35,017 signatures by May 2026—your voice matters in this fight for tax freedom!