Study on county funding hoping for solutions

by: Eric Mayer

Posted: Aug 28, 2023 / 03:47 PM CDT

Updated: Aug 28, 2023 / 04:54 PM CDT

SIOUX FALLS, S.D. (KELO) – Heading into 2024, state lawmakers will be well aware of the problems county governments in South Dakota are facing.

Through three official summer meetings with lawmakers and members of the South Dakota Legislative Research Council, a variety of people involved in county governments have laid out a string of problems with funding, property taxes, public safety, criminal justice system and road maintenance.

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The group’s fourth meeting will be Sept. 13 in Sioux Falls alongside the annual meeting of the South Dakota Association of County Commissioners. The panel of 14 lawmakers plans to vote on specific ideas and possible solutions to aid county governments.

Republican Sen. Jim Bolin is one of the lawmakers on the Study Committee on County Funding and Services. He emphasized higher costs have hampered counties’ main expenses of public safety and maintaining roads.

“You always have to remember that counties, the only real resource they have for funding is the property tax,” Bolin said. “It really comes down to increased costs and limited resources for counties to deal with these problems. They’re your basic local government, especially if you don’t live inside city limits.”

In a state with one of the lowest tax burdens per capita in the region, Bolin said property taxpayers will get fed up with higher property taxes.

“Things have been going along reasonably well for about 30 years,” Bolin said. “But some of these inflationary pressures, societal changes and a lot of things have caused property taxes to go up.”

On the opposite side, county officials have told lawmakers property taxes aren’t providing enough revenue to cover basic costs. In the most recent meeting, Lake County Commission member Kelli Wollmann and commission administrative officer Shelli Gust told lawmakers Lake County is not generating enough revenue to keep up with expenses and there are no areas left to cut.

In a unique example, Buffalo County Commission member Dawn Cable told lawmakers the central South Dakota county has a population of 1,830 and only one active business.

Along with lawmakers, other organizations are monitoring what possible legislation develops from the county funding summer study.

South Dakota Municipal League executive director David Reiss said municipalities are watching the ongoing study of county revenues.

“The South Dakota Municipal League and member municipalities are looking forward to working with legislators and County representatives on bill proposals where appropriate,” Reiss said in an emailed statement to KELOLAND News. “To ensure that South Dakota communities are considered and that municipalities are not adversely affected.”

South Dakota has 66 counties, 64 organized and 2 unorganized (Oglala Lakota and Todd), and each county has different makeups geographically and demographically.

Clay County is 412 square miles, while Meade County spans 3,471 square miles.

Populations can vary from very rural like 917 in Jones County to nearly 200,000 in Minnehaha County, according to data from the 2020 census.

Each county faces main costs with public safety and roads, while county auditors do a bulk of the work for statewide elections. County consolidation hasn’t happened since 1983 when Washabaugh County merged with Jackson County in western South Dakota.

Bolin said his hometown of Canton is bigger than 19 of the 66 counties in South Dakota. He also highlighted how the current county system was created before automobiles.

“It’s undeniable that we have much greater expenses and at the same time, limited avenues for resources,” Bolin said. “Within five years, some of these counties are going to look at being financially non functional.”

Eric Erickson, a Sioux Falls attorney and lobbyist for two county organizations, told state lawmakers 15 to 17 of the state’s 66 counties were closer to “default” and many counties operate “paycheck to paycheck.”

Brookings County State’s Attorney Dan Nelson pointed to problems with a 2013 state law that drove up public-safety costs for county governments. Nelson said the law kept more felony offenders at the local level.

Bolin said some possible solutions would have the state cover or reimburse counties for costs associated with jury trials and decrease the state’s share of a 2% alcohol tax and increase the county’s share.

Kris Jacobsen, executive director for the South Dakota Association of County Officials, told lawmakers her board would like state government to take on funding responsibility for mental health holds, veteran services officers and poor relief administration, as well as a share of indigent legal defense costs.

She said counties still need additional revenue, but would defer to lawmakers to figure out how that would work.

Bolin said he believed county funding problems and possible solutions are high issue topics for members in the Senate. He said possible recommendations agreed upon by the committee in the coming weeks still face hurdles when the 2024 Legislative session starts.

“We’re getting pretty close to a breaking point here,” Bolin said.

What’s the current system with counties?