They called it tax relief. Here’s who actually got relieved.

Those of us over a certain age might remember a Monopoly Chance card, now discontinued: “Pay Poor Tax, $15.” It always made my brother, sister and I howl with indignation. We knew, even at a young age, that it was unfair.

I've been thinking about that card a lot lately, because it feels like South Dakota’s middle- and lower-income citizens just drew one.

“The largest property tax cut in SD history.”

This last session, the legislature passed two bills — Senate Bill 96 and Senate Bill 245 — that cut property taxes for owner-occupied homes.

But to pay for it, they raised the statewide sales tax from 4.2% back up to 4.5%, ending a temporary cut South Dakota families had been counting on. Counties can also tack on an additional half-cent sales tax on top of that.

In summary: sales taxes go up for everyone. Property taxes go down — but only if you own your home. And not by equal amounts.

Who benefits — and who pays

‍The property tax break is calculated as a percentage of your tax bill, which means the bigger your house, the bigger your break. Someone in a $600,000 home gets significantly more relief than someone in a $180,000 home. As one analysis put it plainly: “those who need it least get the most and those who need it most get the least.”

Meanwhile, a USD economics professor estimates the average household will pay about $120 more per year in sales taxes. That hits lower-income families harder, because sales taxes take a bigger bite out of a smaller paycheck. When you make less, a larger share of your income goes toward taxable purchases. The wealthy have the luxury of saving; working families spend what they earn just to get by.

And if you rent? You pay the higher sales tax, get zero property tax relief, and your landlord isn’t legally required to pass any savings along to you. As the same professor noted: “There’s significant relief for homeowners who tend to be older, tend to be more wealthy, and then a tax increase for renters and younger people. ‍

Saying the quiet part out loud

To me, the most remarkable part of this story isn’t the policy. It’s that the people who wrote it admitted its flaws. Republican Senate Majority Leader Jim Mehlhaff acknowledged the law is regressive and said it plainly: “It is regressive. There’s no denying that.”

‍This isn’t tax relief. It’s a tax shift — moving the burden off people who have more onto people who have less.

They left a better deal on the table

What makes this especially frustrating for me is that a better option existed — and it had bipartisan support.

‍House Bill 1308B, drafted by Rep. Erik Muckey (D) and Rep. Tim Czmowski (R), would have:

• Cut property taxes for owner-occupied homes

• Eliminated the grocery tax — relief that goes to 100% of South Dakotans, including renters

• Funded the “Big Three” — education, state employees, and Medicaid providers — without creating new long-term fiscal obligations

As Rep. Muckey said when the bill was killed: “This was a bipartisan effort to bring forward tax relief to 100 percent of South Dakotans.” House Republicans let it die.

Instead of broad relief, South Dakotans got a plan that the Republican Senate Majority Leader himself called regressive — one engineered under gubernatorial primary pressure, not sound fiscal policy. As Rep. Muckey put it: “Strange bedfellows in the gubernatorial primary came together to force through property tax relief, whether it was the right thing to do or not. For the record: it wasn’t the right thing to do.”

What we deserve

South Dakota already has no income tax, which means our system leans heavily on sales taxes to fund basic services. When you raise the sales tax and call it “relief,” you’re not relieving the people who need it. You’re relieving the people who don’t.

In the meantime, education was not funded at the state’s full legal obligation — 3% or inflation, whichever is lower. That means the responsibilities in the gap in funding gets passed down to school districts — who then inevitably have to pass it on to local taxpayers. I’ve said it once and I’ll say it again: there will be no lasting property tax relief as long as education is underfunded.

Working families deserve a tax structure where the relief goes to the people who need it most — not a shell game dressed up as a win during an election year. At the same time, our teachers and learners deserve full funding. HB 1308B showed it was possible. Our legislature chose differently.

That’s exactly the kind of choice I’m running to change.

As for that “Pay Poor Tax” Monopoly Chance card? It was discontinued in 2021.

Eventually, even Hasbro figured out that was no way to treat your neighbors. The South Dakota legislature missed that memo.