(The Center Square) - South Dakota’s House Taxation Committee Thursday discussed two bills that would reduce property taxes.

House Bill 1043 would exempt $100,000 of the "full and true value" of owner-occupied single-family homes. House Bill 1052 would change eligibility requirements for a property tax relief program for disabled veterans and surviving spouses.

The committee heard from Michael Houdyshell, Secretary of the State Department of Revenue, about the impact of property taxes. 

Property taxes accounted for $1.5 billion collected statewide in South Dakota during 2022, Houdyshell said. 

“These are all monies that go to local government to provide K-12 education, county services, municipal services, townships, other special taxing districts like road districts, ambulance districts, and so on and so forth,” said Houdyshell. “But we play a very critical role in overseeing all the local property tax systems to ensure that everything is assessed equitably, that taxes are spread fairly, and in compliance with state law.”

Of the $1.5 billion collected through property taxes, about 56 percent went to schools, 27 percent to counties, 13 percent to municipalities, and smaller amounts to townships and special assessments, Houdyshell told the committee.

A significant chunk of state taxes comes from the sales and use tax and the contractors’ excise tax, which makes up about $2 billion collected, said Houdyshell.

“This is really the bread and butter of our revenue stream in South Dakota and funds all the various governmental services that we provide to the citizens of our state.”

On the heels of a year that saw South Dakota add $115 million to the state’s reserves, according to the Annual Comprehensive Financial Report, Gov. Kristi Noem said during her State of the State Address this week she wants to see tax cuts. The governor is advocating for the elimination of the grocery tax. 

“We continue to have record surpluses. What should we do with our surplus? My answer is simple: Cut taxes and provide relief to South Dakotans,” Noem said during the speech. “I have been to a lot of grocery stores across the state over the past few months. Prices have increased so dramatically over the past two years that families are unprepared when they see the final bill in the checkout line. When I’ve been checking out groceries, about one in every four shoppers have had to put something back because they can’t pay for everything. Folks, South Dakotans need this relief.”