Lots going on tonight... A little name dropping, and Senate Bill 173

I managed to catch dinner tonight with SDWC reader and Iraq war vet/Bronze Star recipient Joel Arends who is here in Pierre taking the bar exam this week. And shortly thereafter I was chatting with several legislators including Senator Brock Greenfield, Representative Russ Olson and his mom Representative Betty Olson (okay, kidding on the mom thing).

Betty had just come from an open meeting where the whole USFWS/Prieksat thing was the topic. I think they're meeting again next week at the same time. She indicated she chatted with my son's godfather, outdoor personality Tony Dean. I might have to try to catch that meeting last week myself.

Conservative blogger Steve Sibson is in town tonight, and I had a chance to speak with him for a few minutes. We hadn't met in person, so it was good to put a face to the name.

The big thing this evening was a explanation of legislation from Representative Al Novstrup. The big thing we talked about was the smokeout of SB 173, and the attempt at having the "DO NOT PASS" recommendation struck from the measure.

In listening to what he had to say about the measure, this issue is as clear as mud. People want to fix the inequities of the 150% rule. Except from what I'm hearing, this bill not only doesn't really fix anything, it locks in the problem.

Don't understand all of this? You're not alone.

As it was explained to me, the 150% rule came about in 1999 and ever since, property bringing 150% over what similar adjacent properties have brought have the additional amount of taxation tossed out. So, we're not taxing new properties at their true sale value.

Probably the biggest example of this is in Lawrence county where (according to the county assessor) the current taxed value is $23, 383, 190. Except the true value of property is $467,663,800. A difference of $444, 280, 610 that's being lost because it represents sales over the 150% rule.

You can understand where that might set up some problems. And everyone acknowledges that SOMETHING needs to be done. But there's some disagreement over whether or not SB 173 is the answer.

After it went through the Senate it stalled in House tax committee where it was thought dead, but just today found itself smoked out.

It's not as if the bill doesn't have an impressive array of supporters. Sponsors include Senators Knudson, Abdallah, Dempster, Garnos, Gray, Hansen (Tom), Hanson (Gary), Lintz, McCracken, McNenny, Olson (Ed), and Smidt (Orville) and Representatives Rhoden, Brunner, DeVries, Dykstra, Halverson, Hargens, Jerke, Lucas, Noem, Pederson (Gordon), Pitts, Rave, Tidemann, Turbiville, and Vanneman.

But the opponents make a pretty convincing argument that we might not want to consider this as the ultimate answer, either.

One of the criticisms of the 150% rule is that it let big land purchasers such as Ted Turner off the hook for paying more. But under SB 173, there's no indication that he'd pay any more. In fact, has has low taxes now, and because of 173, he'd continue to enjoy lower tax rates because of Ag use.

Probably the biggest concern I heard about SB 173 is that because it bases things on rent values, it sends the valuation system askew. Valuation controls bonding and state aid to education. So if you're basing taxes off of cash rent, after a while it gets tough to determine valuation.

Another big concern expressed? Most (not all) of the other states that tax land this way (full rent or based on productivity) have a state income tax. If we pass it, are we going to find ourselves in the same situation as well? Are we just locking in broken values and putting the problem off for another ten years?

One bill that we might hear more about is HB 1304 which SB 173 opponents point to as one possible compromise. If not an implementation, at least a study based on the premise.

Everyone knows the system is broken. It's just a matter of whether they can permanently fix the problem this year, or just put off the inevitable.

We'll hear from on both sides of the issue in the coming days, with more to come.

Comments

Anonymous said…
I knew it. This Prieksat thing just sent up my antenna. He hadn't acted toward hunters any different than any other state or federal game cop, so what's the rub. Now we know..... He busted Tony Dean, violating some hunting law no doubt.
So now Prieksat has hell to pay. The Governors office, media and the outdoor bureaucracy are out to get him. It all makes sense now. No getting things past pp. What did TD do?? over bag on ducks? pheasents? Snow geese? or use a gill net????
Anonymous said…
Who benefits from SB 173?

I'll bet my bank that Jim Lintz's taxes go down. I wonder how Rhoden's will be impacted.

This bill simply highlights what's terribly wrong with a system that relies so heavily on property taxes.

We're essentially considering an income tax for farmers and ranchers. We're throwing out the idea that we'll tax on the value of their land.

So what if ag producers property taxes are rising because of comparable sales. That's whats happening to the rest of us. Deal with it, or move to a real income tax.
PP said…
Anon 12:30.. That's just silly. I believe it was an organization of sportsmen, and from what little I heard, I wasn't sure where they stood on things.

(Hence my thinking I needed to go to the next meeting).
nonnie said…
2:52. Well, not in Lake Co. Our taxes will go up at least 11%. Valuations will go up 40+%. So that means our capital outlay amount, opt out amount, and newly desired bond issue for a gym will go up as well. I hope they bury 173 20 feet under. I agree it's a complicated issue, but simply socking it to the ag property owners again is NOT the answer. And that apparently is what 173 does here.
Anonymous said…
You came face to face with Sibby and you didn't punch him in the face? You're a better man than I, PP.
Anonymous said…
1:14 you are a jerk!

Ask your County Assessor how this 150% rule works. Hypotheically if someone pays 1 million/acre for land, because that is 150% above the County average, it isw taxed at the County average.

Doesn't that seem like it needs to be fixed?

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