PIERRE, S.D. (KELO) — A panel of state lawmakers will decide next month what the Legislature should consider doing next year for county governments in South Dakota.

The Legislature’s Study Committee on County Funding and Services plans to gather September 13 at the Sioux Falls Ramkota convention center, where the South Dakota Association of County Commissioners will be holding its annual meeting at the same time.

The legislative panel will take several hours of testimony from county officials starting at 8:30 a.m. CT. The lawmakers will spend the afternoon voting on specific ideas. Those that win endorsement will become legislation for the House and Senate to consider in the 2024 session that opens January 9.

The panel met for a third time Wednesday at the Capitol. “I want this committee to be unified on the bills we come forward with,” said its chair, Republican Rep. Roger Chase.

Many of the situations that county officials have described as challenges are tied to property taxes, jails and juvenile justice, all of which were legislative study topics during the 2022 interim. Chase said lawmakers could remove their names as co-sponsors after the current committee’s legislation has been introduced for the 2024 session. He wants the committee to actively support whatever bills come forth: “I think that’s what failed in the three summer studies we had last year.”   

Among the ideas that surfaced from the committee Wednesday were shifting a portion of the state alcohol tax to counties, such as Republican Sen. Jim Bolin tried in 2017; giving counties some of state government’s surplus funds each year, as suggested by Republican Sen. Al Novstrup; and allocating to counties some or all of any permanent reduction in the state sales tax, as proposed by Republican Rep. Neal Pinnow.

The panel’s co-chair, Republican Sen. Randy Deibert, still serves on the Lawrence County Commission. He listed 10 ideas, including letting counties take an administrative fee for collecting and distributing property taxes; shifting counties’ veteran services officers, emergency management personnel, court-appointed attorneys and mental-health holds to state government’s responsibility for funding; redistributing part of the alcohol tax; letting counties charge a fee for search and rescue; offering incentives for cybersecurity; realigning election costs; and returning a greater role to state government for juvenile corrections.

Lake County Commission member Kelli Wollmann and commission administrative officer Shelli Gust told their story. “The current property tax system has not allowed Lake County to generate enough revenue to keep up with expenses,” Gust said. “There is nowhere left to cut.”

Wollmann said she’s served on the Lake County Commission since 2011. “There’s no one answer, I believe. I want you to know we are struggling, not just in our county, but many others,” Wollmann told the legislators.

Buffalo County Commission member Dawn Cable said none of the neighboring counties was willing to consolidate with Buffalo County because it includes the Crow Creek Indian Reservation and its challenges. She said the county population is 1,830 and has one active business.

Attorney Eric Erickson and executive director Kris Jacobsen delivered recommendations from the South Dakota Association of County Commissioners. Jacobsen said her board would like state government to take on funding responsibility for mental health holds, veteran services officers and poor relief administration, as well as a share of indigent legal defense costs.

“Additional revenue is needed,” Jacobsen said. But, she added, the county commissioners board members are willing to defer to the Legislature for what those steps might be.

Republican Sen. David Johnson said the committee needs to consider that many voters in some counties such as Lake and Pennington don’t want to pay higher taxes and fees. “Perhaps it’s time to do some cutting back,” Johnson said. “It should be on the list.” 

Chase said the committee needs to think about what happens if a county government goes insolvent. “Just a question,” he said. 

Whether to recommend that counties be allowed to charge a sales tax split the co-chairs. Chase said rural residents already were paying up to 6.2% tax on items they purchase in municipalities, while Deibert said many rural counties no longer have much of a retail base.

Republican Rep. John Mills said the committee hasn’t talked about consolidation. He said the state could offer incentives “I don’t have a formula, a proposal, but it should be on the table for our final discussion.”  

Chase noted that the county seats of Alexandria and Mitchell are within 10 miles of each other, while only the Missouri River separates Pierre and Fort Pierre.

Tax-increment financing districts that municipalities use as incentives don’t help counties for years, according to Republican Sen. Helene Duhamel. She said Pennington County has more than 100 TIF districts.

“They’re diverting the dollars for the 20 years or so from the counties,” Duhamel said. “We have to figure out how counties can somehow be part of that conversation.”