SIOUX FALLS, S.D. (KELO) — A panel of state lawmakers has wrapped up work on ideas that could help ease financial strain on South Dakota counties.
The final list on Wednesday from the Legislature’s Study Committee on County Funding and Services included eight proposals and two resolutions.
The chairs, Republican Rep. Roger Chase and Republican Sen. Randy Deibert, will deliver a report of the work to the Legislature’s Executive Board. If the board approves it, the Legislative Research Council would then assemble drafts for the 2024 session that opens January 8.
Chase said copies of the final summary would be provided to committee members for approval. Their meeting coincided with the annual meetings of the South Dakota Association of County Commissioners and the South Dakota Association of County Officials at the Sioux Falls Ramkota Convention Center.
County officials spent the morning telling lawmakers about difficulties that county governments face.
“We will just become more and more minimalist, less and less capable,” Clay County Commission chair Elizabeth Smith said about the increasing difficulties counties have faced in the wake of the property-tax limits the Legislature enacted a quarter-century ago at the suggestion of Governor Bill Janklow, after voters in 1994 nearly passed a constitutional amendment.
“You’ve given us the testimony,” Chase told county officials as the lawmakers broke for lunch. “We’ll run with it. We need your help when we get to Pierre in January.”
Here’s a look at what the panel agreed in the afternoon to take forward:
Letting county governments charge administrative fees to other governments, such as school boards and municipalities, for collecting property taxes. Deibert said counties provide the manpower for assessing property values and collecting taxes. “I see it as a fairness issue,” Republican Rep. John Mills said. Still to be worked out is whether the fee should be a percentage of the taxes or be based on a county’s costs. Noted Republican Sen. Helene Duhamel: “The state charges a percentage on the sales tax for each municipality that receives it.” But Republican Sen. David Johnson spoke against it: “It’s a new tax, a new fee, paid ultimately by the citizens of South Dakota.”
State funding of veteran service officers. State law requires that county governments have VSOs. Counties currently pay their salaries and benefits, but Johnson wants state government to pay 100% of those costs as well as for training. Still unclear is how salaries would be set.
State funding of emergency management staff. State law requires that county governments have EM personnel, who are paid from county revenue. The proposal would shift the responsibility to state government.
Capping court appointed attorney costs at $10,000 per case. State government would pay the costs above that level. “This is getting to the heart of the matter as far as county funding is concerned,” Republican Sen. Jim Bolin said. Added Democratic Sen. Liz Larson, “This is the most impactful item I see on this list.” A committee administered by the state Unified Judicial System this summer also has been studying potential changes in indigent defense costs. Republican Sen. Jim Mehlhaff serves on the two panels. Chase said that when he was a Beadle County commissioner it was difficult to know how much should be budgeted for indigent defense costs. “We’ve got 91 we’ve got to convince this is a good idea,” Chase said. Republican Rep. Lance Koth, who serves on the Legislature’s Appropriations Committee, said the appropriators and Governor Kristi Noem need to be apprised of this before she delivers her budget recommendations to lawmakers in December. “We’re going to get an early indication from the governor’s office how they feel about this suggestion and this bill,” Chase said. Republican Rep. Neal Pinnow said he wants to see the bill but “is really hesitant” about how its cost might compete with other ideas such as providing more property tax relief. “It seems like an awful large dollar amount that we’re asking the state to fork over to the counties,” Pinnow said.
Change distribution of alcohol beverage tax. Bolin said he will be “championing” this proposal that would shift 25% of the revenue from state government to counties, taking $4.5 million from what the state now gets. Bolin called it his “number one priority” because counties are “the first line of influence in dealing with the criminal justice system.” Chase said counties also support other services related to these problems: “It’s not a new tax. It’s shifting the percentage from the state to the counties.” Johnson said he’d like to go the full amount but Bolin disagreed: ”I’d rather have a manageable bite before we take the whole thing.” “I have to take that as good advice,” Johnson replied, “but I hate to have to take that as good advice.”
State funding for mental-health holds. Republican Rep. Amber Arlint said happy people generally don’t commit crimes.
State grant program to cover cyber-security costs. Chase called it “an important, important issue.” Hackers focus on easy prey, Chase said: “To me, a lot of rural South Dakota counties are easy prey.” Larson said there are “a lot” of federal funds available and it didn’t make sense that South Dakota was one of two states whose governors chose not to apply for them: “This is a very important issue for counties.”
Allow counties to use state government’s obligation recovery center to pursue debts owed to counties. Said Chase: “I think it’s an important thing to move forward on.”
Resolution calling for a centralized state database for property values. Chaffee said counties have been spending as much as $250,000 apiece on assessment software. The proposal calls for the state Department of Revenue to pay for software and licensing fees, and in turn the department would receive reports from counties in a uniform format. Deibert said Montana has a statewide database for property. Koth said state government is spending “hundreds of millions of dollars” upgrading its technology systems and suggested the committee work with the state Bureau of Information and Telecommunications to see whether this fits strategically with those changes. “It’s one taxpayer system,” Duhamel said. “It is in the best interest of the state to move in this direction.”
Resolution calling for a county incentives fund. The wording would encourage cooperation, Chase said. “Don’t say consolidation at this point,” Johnson said. Pinnow disagreed with the idea, saying the committee shouldn’t do anything. “I don’t know that we should be handing down directives, especially talking about closing courthouses,” Pinnow said. But Duhamel said counties could use the funding for cooperating on courthouses, jails and software: “It’s smart seed money, and it’s where we want to go,” Duhamel said. Chaffee said the software resolution could be joined to it; “It’s the same thought process,” he said. Johnson stressed that the resolution should avoid the word ‘consolidation,’ explaining that three county commissioners had spoken to him in the previous 24 hours telling him the same thing. “They want to handle this themselves, at least the three who spoke to me,” Johnson said; he added, “Consolidation is an inevitable discussion. Ten, fifteen years from now it’s going to have to be handled by the Legislature.” Koth called it a good idea but said the committee might not have “enough horsepower” to keep pushing for more appropriations. “I don’t know what the upper limit is,” Koth said. “The counties are important to us…It’s going to boil down to: Do we have the money?” Deibert, who still serves on the Lawrence County Commission, said, “The possibilities are there. They need a boost.” He added: “The cooperation also needs to be between the counties and the state to solve this.” Said Mills, “Some just need the nudge.”
The committee also agreed to support legislation being independently drafted that would increase the amount that townships must pay counties for maintaining township roads to $2,000 or more. State law currently sets the amount at $200.