Joshua Meyer Testimony in South Dakota: Truth In Taxation

ALEC Tax & Fiscal Policy Task Force Director Joshua Meyer testified before the South Dakota House Committee on Taxation on SB 183 and its potential impact on South Dakota property taxes.

You can read his testimony below:

Dear Chairman Aylward, Vice Chairman Hughes, and members of the committee,

My name is Joshua Meyer. I serve as Director of the Tax and Fiscal Policy Task Force at the American Legislative Exchange Council. I appreciate the opportunity to share ALEC’s nonpartisan research and analysis as you consider how this legislation will impact South Dakota.

Senate Bill 183 bears similarity to the ALEC model policy Truth in Taxation.

Truth in Taxation recognizes some of the inherent issues with how property taxes are calculated: Allowing assessment growth to dictate the level of property taxation means tax burdens are based on capital gains that may never be realized.

Truth in Taxation thus proposes a common language for how taxing districts and taxpayers talk about property taxes—instead of focusing on tax rates, property taxes may be discussed in terms of tax collections. When tax collections are increased, taxpayers are seeing their bills go up. When tax collections stay the same, taxpayers bills stay the same.

In short, Truth in Taxation relies on 2 components:

1. Revenue-neutral property tax collections limit
2. Transparency measures, including notification requirements, open meetings, and recorded votes

South Dakota already has the basic foundation of Truth in Taxation in statute. It establishes a limit which grows at the lesser of 3% or the rate of inflation. Exceeding that limit requires a 2/3 vote. Taxpayers receive notice of increases after the fact and have the opportunity to put the increase on the ballot.

Senate Bill 183 adds additional transparency requirements to that foundation. It requires notice be provided to taxpayers in advance of the vote. That adds another layer of accountability

Truth in Taxation comes from policy enacted in Utah in 1985. If you open up Google an search for “Utah Truth in Taxation Notice,” you find notices similar to what would be required under Senate Bill 183. You find online webpages from counties and school districts, laying out why they are proposing to increase property taxes, information on historical tax rates, and information on the meeting when the vote will occur.

Over the long term, Truth in Taxation has kept Utah competitive and kept property taxes sustainable. Since 2010, population of the state of Utah has grown by nearly 30%. Depending on the year, it has been the first or second fastest growing state in the country. That growth includes domestic migration into the state, especially from California. All that growth has driven up property values and increased home prices—that has led to its own policy concerns in Utah, but important for this subject is that property taxes have held steady. Utah also has the 4^th lowest effective property tax rate in the country. In short, then, Utah has grown, property values have increased, but property taxes have held steady.

Kansas enacted Truth in Taxation in 2021. The following year, more than half of taxing authorities in the state voted against increasing property taxes.

In ALEC’s Rich States, Poor States report, Utah has ranked 13^th for property taxes in 2008 and 15^th in 2025. So, in spite of all this growth I’ve mentioned, rapid increases in property values, property taxes have held steady. In fact, relative to personal income in Utah, property taxes have decreased. This is the impact of Truth in Taxation.