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Property tax credits rise from the ‘ashes’ of failed SD school choice legislation • South Dakota Searchlight [1]
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Date: 2025-02-11
A bill described as an “opportunity for a phoenix to rise out of the ashes” of South Dakota’s school choice debate advanced out of a legislative committee Tuesday at the Capitol in Pierre.
The legislation from state Sen. John Carley, R-Piedmont, would provide property tax credits to help families pay for private school, homeschooling or other forms of alternative instruction.
Rapid City resident Tonchi Weaver, representing the conservative political action group Citizens for Liberty, made the “phoenix” comment while testifying in support of the bill. She was referencing failed attempts from earlier in the legislative session to create publicly funded savings accounts for families’ nonpublic education costs.
Weaver said tax credits are another way to provide that help.
“I think this is a conversation that needs to be had and an idea that needs to be put forward,” she said.
Property owners could use the credit for their own children, or contribute it to support other children. A cap would limit a taxpayer’s credits to 80% of what the state allots for a public school student in the South Dakota education funding formula. Carley said that would initially set the cap at about $6,000 per taxpayer.
Schools and counties both receive property tax revenue. Carley said the credits would only apply to the school portion of taxes.
The bill would cost school districts a combined $14 million to $21 million per year in lost revenue, according to Carley, who attributed the estimate to a fiscal note prepared by the Legislative Research Council. The fiscal note was not yet publicly available Tuesday morning.
Dianna Miller, a lobbyist for South Dakota’s large school districts, said the bill would transfer a greater education funding burden onto the state. She said the funding formula works like a glass of water, with school districts pouring their property taxes in first and the state — which is funded primarily by sales taxes — filling the rest of the glass.
“You’re cutting the local effort that’s going to be poured in there by giving a tax incentive to people,” Miller said. “So the state is going to end up paying more.”
Miller was one of several public school representatives who testified against the bill. The state Department of Revenue also opposed it, saying it would create a new administrative burden for county and state officials tasked with managing the program.
Opponents also raised concerns about accountability, saying there is nothing in the bill — other than a requirement to turn in receipts for expenses — requiring families benefiting from the program to prove their children are being educated.
Sam Nelson, a lobbyist for the Sioux Falls School District, said the bill would set a bad precedent by allowing people to use taxes for their own priorities rather than shared needs like public schools.
“If we’re going to allow people to opt out of supporting a bedrock of their communities, when can I opt out of paying for roads and bridges in Lincoln County that I don’t use or that don’t service me every day?” Nelson said. “I’d really like to pour a new driveway for my house. Can I opt out and pay for that?”
Ultimately, there were enough supporters of the concept on the Senate Education Committee to send it to the full Senate on a 4-3 vote.
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