PIERRE, S.D. (KELO) — Another proposal for a tax cut — this time, for South Dakota homeowners, through a reduction in property taxes for K-12 schools — is moving forward in the Legislature.

The House Taxation Committee voted 13-0 Thursday to endorse HB-1043. The one-sentence bill would exempt the first $100,000 of assessed value on an owner-occupied home from the statewide general school levy.

The proposal came from the Legislature’s Study Committee on Property Tax Structure and Tax Burden last year. Republican Rep. Trish Ladner and Republican Sen. Jack Kolbeck are carrying the bill, which now heads to the House Appropriations Committee for further consideration.

That’s also where the House tax panel recently sent two other proposed tax cuts. One is a reduction of the state sales tax to 4% that Republican Rep. Chris Karr and Republican Sen. Ryan Maher brought. Another is the governor’s 0% state tax rate on groceries that Republican Rep. Mary Fitzgerald and Republican Sen. John Wiik are carrying.

The appropriations panel in the coming days will begin forming revenue estimates for the rest of this budget year that ends June 30 and the new budget year that starts July 1. State revenue through the first six months has come in $145.7 million more than the Legislature’s official forecast. What the appropriators decide will help steer legislators’ discussions on which of the three plans should be pursued.

Ladner told the tax committee that the property-tax cut would be about $350 for each owner-occupied home and save homeowners roughly $70 million to $80 million. She said the state-aid formula to K-12 schools would be adjusted to cover the amount. The Legislative Research Council is preparing an official estimate.

By comparison, Governor Kristi Noem’s cut would cost about $102 million and Rep. Karr’s reduction would cost about $170 million.

“Schools and counties are held harmless,” Ladner said. “Other taxes are not changed.”

Testifying as opponents were Derek Johnson, from the governor’s Bureau of Finance and Management, and Jessica Filler, director of policy and legal services for Associated School Boards of South Dakota.

Filler indicated the impact might be higher. “That’s a huge hit to our schools, 70 to 90 million dollars in local effort that will be taken away.” She said schools districts would need to use opt-out levies because they can’t afford cuts if state aid isn’t increased the same amount.

“There is nothing in this bill that guarantees the state will put in more money,” Filler said.

Ladner disagreed. “It will be made up by (state) general funds the schools receive,” Ladner said. “The schools will not be harmed whatsoever.”

Testifying in support were Kolbeck as well as lobbyists for AARP, South Dakota Retailers, South Dakota Chamber of Commerce and Industry, and South Dakota Realtors.

Nathan Sanderson, the retailers executive director, said polling done for his association last year suggested that South Dakotans saw a greater need for a property-tax cut than a sales-tax cut. He said 49% thought their local property taxes were too high and 14% thought the state sales tax was too high.

“Of those three options that are here, we prefer the property-tax cut,” Sanderson said.

Republican Rep. Greg Jamison suggested the tax panel let the appropriators know which approach it favors. But Republican Rep. Kirk Chaffee, who chairs the tax panel, said the appropriators need to look at the numbers.

Republican Rep. Neal Pinnow called for the tax panel to send forward Ladner’s property-tax cut. He began as a “no” but changed his mind as he gathered more information. “If everything I heard is true, I think this could be good for South Dakota,” he said.