Why do property tax rates continue to rise in Sioux Falls?

After watching the Sioux Falls school board meeting last night about the possible Sanford donation of land for another school, it got me thinking about property tax rate increases.

Since I have purchased my home about 15 years ago my property taxes have over doubled. In that time I had one small equity loan and a re-finance. Most of the increases have come from rate increases. While I can understand a rate increase with a community that has slow building and housing growth, that hasn’t happened in Sioux Falls. In fact when you think about record building permits over the last five years and the hot seller’s market in housing you would think that rate increases would not be needed due to this massive growth.

There are several ways increases happen. The city can raise property tax rates each year, and they have every year for probably the past 20 years or longer. Minnehaha county also has had several opt-outs along with the school district and now with a new high school looming in 2019, get prepared for another BIG increase in our property taxes.

It also doesn’t help that the county has to fund the drastic increase in criminal justice services through our property taxes. The city really should be helping to pay for incarceration with the 2nd penny and the alcohol tax really should be doubled to help alleviate those costs. It would also help if our PD was properly staffed, trained and paid to help combat crime through prevention instead of whack a mole.

That is why I am confused about the math. How can we continue to add housing and commercial property and have several press conferences about this growth yet have to raise rates consistently? So which is it? Is the massive growth adding to the tax rolls? Damn right it is. So are we being over taxed on our property? Probably, especially on private housing.

Part of the problem is all the cheerleading about building permits is kind of a false pep rally. Many of the big projects in our community are public or non-profit projects. And the ones that are not are getting TIFs or other tax abatements. In other words, the big wheels in town are seeing some big tax cuts while the rest of us are ponying up for infrastructure through higher taxes for projects like Flopdation Park.

The system is clearly broken and the city, school district, county and state need to take a different approach to funding government instead of constantly increasing our property taxes. I had a few solutions above, but I also think we should suspend or end the TIF program. It hasn’t proven that it pays for itself through workforce development or providing affordable housing. TIFs are corporate welfare in Sioux Falls and little else. I would encourage the next mayor and council to seriously look at ending this program and initiating different programs for developers like deregulation to save them money.

Let’s face it, if you are working class in this city you are getting the shaft when it comes to taxes (and don’t think apartment dwellers are immune, the high rental rates are proof property tax rates are high). Sales taxes are also very regressive. Taxing food at a higher rate to supplement teacher was and is a bad idea.

It’s time to stop the incremental property tax rate increases and use common sense when funding essential government services.



5 comments ↓

#1 "Very Stable Genius" on 01.23.18 at 5:28 pm

It’s because property values are going up at a higher rate than wages in this town. Many are or will walk into a world in this town where they own more than they can afford.

Based on Zillow, my home value has gone up 25% in the last ten months…. Are wages going up that quickly? I don’t think so. Its analogous to what they use to call “bracket creep” back in the late 1970s, where inflationary wages moved you up to a higher progressive tax rate.

Realistically, the only way to deal with this is to raise wages and or lower the tax mill rate relative to any major real estate inflation. Although, I question how “realistic” either of these ideas are….. Or, I guess they could cut spending, but is that “realistic” either?

#2 Fluff Mc Fluffin on 01.23.18 at 6:58 pm

Agreed, they are getting out of hand.

#3 Jon on 01.23.18 at 8:53 pm

Bought our house here in town for 155,000 two and half years ago. It is now valued at 180,000. My paycheck only goes up roughly 2% per year. I want to sell this house, but would have no place to go with how expensive houses are in this town. I sense a major bubble coming to the SF housing market in the upcoming years.

Also, I think the new high school, new middle school, new Whittier school will bring crushing property tax increases in the near future.

I moved here 6 years ago to escape a higher tax state and am now seeing everything creep up here.

#4 Bald-n-Surly on 01.24.18 at 8:15 am

Generally speaking, planners tell me, growth doesn’t pay for itself. That’s a myth. Also, housing is clearly inflated, again, which is dangerous.

#5 The D@ily Spin on 01.24.18 at 9:34 am

Property values have risen but there’s also inflation and value of the dollar. Some states freeze property taxes somewhat so that people (especially seniors) are not priced out of their homes. Sounds good but once sold purchaser pays new rate.