So this is an interesting story;
The more we look into the property tax reductions over the past ten years, the more questions we have. While we are still researching this, some things that stick out so far;
DOC: Historical – Tax Reduction Program.pdf
Tax Reduction Program – Informational Jan. 8.pdf
How was the mayor(s) (Munson & Huether) able to sign off on these, through the Planning Department without the review of the city council? Or even the County Commissions and School District? Were there any state laws violated?
One of the biggest recipients was involved in many LLC’s and ownership groups related to Legacy Development. Ironically one of the persons who would have known about the reductions, Daren Ketchum, now works for Legacy.
Many of the recipients are long time established, successful Sioux Falls businesses, like Raven & Gage brothers. Why would they need tax incentives?
Some of the recipients also received TIFs on top of the reduction, for example Washington Square.
Ironically Midco received a 2018 reduction of $129K. This is just a year after announcing a sponsorship of our Aquatic Center.
Did the TenHaken administration decide to blow the lid off of this to 1) wash there hands of the practice and 2) to see if the media will do some digging around? COS Erica Beck worked in the Planning office when some of these reductions were handed out.
Like I said, we are still researching the ‘many’ connections between the reduction recipients and the previous administration and will have more findings coming soon.
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.
As I have mentioned before, with Sioux Falls School District recently passing a $50 million dollar opt-out and the plans for a possible $30 million dollar bond for a new HSÂ this is the WRONG time to be handing out property tax discounts in the form of TIF’s to wealthy, successful developers. Not to mention all the issues with open enrollment causing widespread segregation and almost half of Sioux Falls students on FREE or reduced lunches.
Here are a few more reasons;
• The county is struggling to make ends meet with rising crime while building a new jail.
• Developers, especially one of the largest in the city, having been doing very well for a long time, especially with record breaking building permits, do they really need tax discounts or breaks to be successful? Shouldn’t we be focusing tax incentives on affordable and workforce housing and not retail and luxury lofts?
• The state is in the midst of considering some rule changes when it comes to giving so much power to municipalities concerning TIF’s. Expect some legislation in the upcoming 2018 session. Not only does the county and school district want a bigger say in these matters, so does the state.
• There are numerous conflicts of interest on the council. Besides Councilor Marshall Selberg being an independent contractor for Lloyd Companies, the mayor and some of the others have received campaign donations from Lloyd. Starr, Neitzert and Stehly seem to be the only candidates who have not. You can’t hardly vote on a $43 million dollar project with a TIF incentive with only 3 votes.
There are way to many conflicts of interest here for the council to even consider a TIF incentive. I think approving the project is fine, but when it concerns a tax discount, that should be taken off the table.
I knew it was going to be a rough road getting that many signatures in a short period of time. I think they lacked the manpower to get it done. Not sure how many they were short, but after talking to a couple different people from the drive and associates it looks like they came up about 1,000 short (which ironically means they got about as many signatures as the number of people who voted in the last school board election) So I guess we are stuck with paying the $50 million dollar ‘SINISTER’ tax.
I also got thinking about the statement from the school board that they wouldn’t spend the entire tax, and that’s all fine and dandy, but they still have to ‘collect’ the tax. So does that mean at the end of the year, what they don’t spend will be refunded back to us?
LOL!
In other words, even if they don’t spend it, it still gets collected and goes into investments. At least the school district will not only be able to retain teachers they will keep some stock brokers in Sioux Falls employed. Now shut up, go pay your higher taxes on food so we can retain teachers who teach kids on FREE and reduced lunches. Makes sense? Right?
l3wis