As city officials have been celebrating the growth of Sioux Falls, Minnehaha County officials have been left with the hangover.
The City of Sioux Falls saw an eight-percent increase in sales tax in 2013 while state law only allows Minnehaha County to increase property taxes by a maximum of three percent.
That eight-percent increase helps the city add more police officers to keep up with the growing population. At the same time, the county jail is bursting at the seams and the caseload is stacking up for prosecutors and public defenders. As that gap grows, Minnehaha County officials are trying to figure out how to build a new multi-million dollar facility to keep up with the growing number of criminals.
"The burden is on the county, not the city, for the negative growth of the community," Minnehaha County Commissioner Gerald Beninga said.
The growing population means robust sales tax numbers, which is the city's main funding source. More money means more staff, including 15 additional police officers in the last five years.
"We grow by about two to three percent population-wise every year and that's about what our call volume grows at too,” Sioux Falls Police Chief Doug Barthel said. “So, by adding those officers, we're able to continue to keep up with that. I know for a fact the state's attorney's office is not growing at that same rate.”
That's where the growing pains are becoming a problem for Minnehaha County. Once police arrest a criminal, it's up to the county to put them in jail, feed them, prosecute them and even defend them in court.
While the city celebrates its revenues, the county's main source of revenue - property tax - is only allowed limited increases every year by state law.
"We get just the property tax. We don't get any sales tax revenue so, generally speaking, the city is getting the positive growth issues to deal with and the county deals with the people who can't take care of themselves and the people we have to take care of because of public safety issues," Beninga said.
"There is definitely a funding disparity between the city and county and what the solution is for that I don't have that," Barthel said.
County officials are currently asking the state legislature to change the property tax formula. If that doesn't work, the county may have to opt out of the formula and raise taxes on its own to pay for a new jail and increased criminal justice costs.
"The last option for us is to opt out and again that's not a comfortable solution," Beninga said.
The bill commissioners are pushing for would allow counties to raise property taxes three to four percent every year. The legislation will be up for consideration Thursday but the bottom line is the increase in crime is going to lead to increased taxes and an expensive hangover for taxpayers.
Five Year Revenues
City of Sioux Falls Minnehaha County
Sales Tax Property Tax
2013 8% 3%
2012 6.2% 2.1%
2011 3.2% 0%
2010 3.8% 3%
2009 -5.8% 3%