Compiled by the Office of Secretary of State Joyce Hazeltine
Constitutional Amendment A
Title: Initiated amendment to Article VIII, Section 15 of the South Dakota Constitution concerning the taxation of real property for school purposes.
Attorney General Explanation
School districts have a constitutional right to use real property taxes to pay their expenses. On average, about half of school funding comes from property taxes. If property taxes are removed as a source of revenue for schools, the Constitution requires that the Legislature find some other method of funding public schools.
Amendment A would not eliminate property taxes, but would prohibit using such taxes for public schools.
Amendment A contains no effective date. If it is effective immediately, and the Legislature does not meet and find an immediate alternative revenue source, then contract rights may be violated. Property taxes for payment of existing school bonds will probably not be affected.
Amendment A may conflict with Amendment F. If both constitutional amendments pass and are found to conflict with each other, one or both could be declared void.
A vote "Yes" will prohibit the use of property taxes to fund public schools.
A vote "No" will leave the Constitution as it is.
Pro -- Constitutional Amendment A
Since 1972 SD taxpayers have complained about the tax system in their state. Several initiated measures have been submitted to the voters, but all have failed because of heavy resistance from the Executive Branch, the Legislature and special interest groups. Consequently, South Dakota is still in dire need of tax reform!
Several studies have confirmed the inequities and problems with our tax system. A 1989-90 study, ordered by Gov. Michelson, found that (1) property taxes are high, (2) property tax assessments are unequal and unfair, (3) current tax sources are inequitable. The findings and recommendations of this study were largely ignored. Another study of the property tax problem is now being conducted because of rapidly rising property assessments and tax bills.
Amendment A is designed to "jump start" tax reform by changing the way education is funded. Currently approximately 62% of property tax revenue is earmarked for Kindergarten-12 grade education. This heavy reliance on property taxes has caused huge increases in property tax bills to meet increased costs of education for the past 2 1/2 decades. And in spite of these increases, education is still not properly funded; school are in disrepair, teachers receive the lowest average salaries in the nation, and bond issues for buildings or repairs are being voted down in many school districts.
Under section 15, Article VIII of the Constitution, the Legislature has responsibility for funding education by "general taxation" and therefore should initiate tax reform. An offer to withdraw this initiative from the ballot was made to the last Legislative session if serious tax reform was introduced and put to a vote of the people. This offer was ignored and the Legislature will not enact tax reform until required to do so by a vote of the people.
The taxpayers of SD need Legislative action on real tax reform; not more studies of a known problem.
VOTE "YES" ON AMENDMENT A
Submitted by: David D. Ruff, 3040 Ridge Road, Spearfish, SD 57783. Mr. Ruff is one of the sponsors of this initiative.
Con -- Constitutional Amendment A
Amendment A is an 11-word sentence that would create major problems for South Dakota’s kids and our quality of education will suffer.
1. LOSS OF LOCAL CONTROL
If passed, virtually every dollar used to fund South Dakota’s public schools will come from either the state or federal government, and policy makers in Pierre and Washington, DC will decide the revenue side of every school district’s budget. This will lead to fewer opportunities for our young people at a time when they need more communication, problem-solving and mathematical skills than ever before.
2. PROPERTY TAXES WOULD NOT GO AWAY
Currently, local school districts receive an average of 62 percent of property taxes paid; cities, counties and special districts receive the rest. Even if Amendment A were to pass, property tax payers would still be paying a tax bill that would be nearly 40 percent of its current total.
3. TAX CHAOS WILL RESULT
If passed, Amendment A would go into effect the day after the state election canvass in December, 1998. Calculating taxes owed would be chaotic, and potential lawsuits would tie up this question in the courts for months or years.
4. LEGISLATIVE APPROVAL OF ALL SCHOOL CONSTRUCTION PROJECTS
School bonds have been let under terms that they be repaid by local property taxes. If property taxes are no longer available for school purposes, serious questions will arise about how current bonds will be repaid.
And since no local property taxes could be used to let bonds for future construction projects, school districts would have to get funding approval for each new construction project from the state Legislature.
5. LOSS OF FEDERAL MATCHING FUNDS
Most federal school aid programs require local matching funds, so there is a distinct possibility that some local programs will be pared back or cut entirely. This could affect a variety of services including special education and school lunch programs.
Amendment A deserves an "F." Vote NO on A.