As South Dakota Republican Gov. Larry Rhoden signed his property tax relief bill into law Thursday, he was already planning another proposal to ease the burden across the state.

The new law, which will take effect July 1, limits the increase in owner-occupied residential assessments to 3% countywide for five years; sets a five-year, 3% cap on the amount taxing districts and school capital outlay budgets can increase as a result of new construction; exempts some home improvements worth less than 40% of a home’s value from affecting assessments; and expands eligibility among disabled and elderly people for property tax assessment freeze programs, including an increase in the multi-person household income limit from $45,000 to $65,000, and an increase in the maximum value of an eligible home from $300,000 to $500,000

The legislation was the only major property tax reform bill approved during the annual legislative session, among three such bills that survived until the session’s last week.

The possibility of citizen-initiated property tax relief ballot measures was mentioned several times during the legislative session, and a potential ballot question is listed on the Secretary of State’s website that would roll back nonagricultural property tax assessments and cap annual valuation increases. 

Rhoden is hopeful his plan will assuage South Dakotans’ concerns. But “there’s more work to do,” he said during a press conference at the Capitol in Pierre.

The Legislature passed a resolution to create a summer task force to “identify impactful, substantive measures” to provide significant and lasting property tax relief for homeowners. The task force will include 16 lawmakers, a representative from the Bureau of Finance and Management, and a representative from the Governor’s Office.

Legislative leaders say the task force will primarily analyze local government spending and funding. The state does not receive property tax revenue, relying instead on the sales tax. Cities receive revenue from sales taxes and property taxes, while counties and schools are reliant on property taxes. 

Proposals to cut local government funding historically have not fared well in the Capitol, Rhoden noted.

“We need to deliver meaningful property tax relief and actual property tax cuts for South Dakotans,” he said. “We need to find a way to do it without making the state or counties or school districts go broke.”

Rhoden is keeping his new plan under wraps until his administration nails down details. He plans to reveal the plan in the coming days.

He told members of the press it’ll provide an alternative funding source for local governments, targeted to the areas struggling the most with residential property taxes — which could indicate areas such as the Black Hills and the Sioux Falls metro area — rather than taking a statewide approach to the issue.

“Additional funding should be the last resource,” Rhoden said, “not the first.”

Senate President Pro Tempore Chris Karr, R-Sioux Falls, said the governor hasn’t shared details of his proposal with the Legislature yet. He said the governor’s proposal sounds “tangential” to the task force’s purpose.

“The task force is meant to set everything on the table: whether that’s a new source of revenue or lifting property tax or sales tax exemptions,” Karr told South Dakota Searchlight. “Everything needs to be on the table to look at how we’re funding schools and counties, and hopefully provide relief.”