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Revenue Department: Staffing partially to blame for inconsistent assessments

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(The Center Square) – Staffing issues are partially to blame for inconsistencies between counties in property tax assessments, the Department of Revenue told South Dakota lawmakers Monday.

Twenty-five of the current 64 county directors of equalization have five or fewer years of experience, DOR Division Director Wendy Semmler told the Study Committee on Property Tax Assessment Methodology.

She said experience level had a “major impact” on a tax office’s operations.

“I would say that it takes anywhere from three to five years for a director to fully understand all aspects of their job,” Semmler said. “We are finding that many people are not sticking around to get that experience because being a director of equalization is no walk in the park. There are the education requirements that we’ve talked about, they have to deal with stressful encounters of taxpayers both in the office and when they’re out expecting. I’m very thankful that I don’t have to worry about whether or not I’m going to stumble across a meth lab or an angry dog when I’m in the everyday course of my job.”

Another contributing factor is the level of support directors of equalization get from their local county commission.

“No two counties are the same,” said Semmler. “I think it’s pretty pertinent to this discussion to acknowledge some of the reasons why there is that variability. County commission support is crucial to ensuring that the director of equalization has all that they need in terms of resources.”

On top of that, counties use different software vendors, which Semmler said can create challenges.

“The Department of Revenue can provide all the guidance regarding what they need to do but we can’t show them how to do it because each system has their own nuances and we’re not experts in each one of those systems,” said Semmler.

Committee members are tasked with studying the methodology by which real estate tax assessments are made and making recommendations for policies that can “increase the efficiency or effectiveness of assessment” and improve accuracy and consistency, according to the Legislative Research Council.

Property taxes are the primary revenue source for local governments. South Dakota’s property tax ranks 35th in the country at 1.31%, according to the Tax Foundation. The state also levies a 4.2% sales tax and a $0.28% gas tax but stands out from most neighboring states by not imposing an income tax.

Local governing bodies are responsible for determining the taxes needed to cover required services and changes in the real estate market have no impact on revenue need, the DOR told committee members.

Levy rates go up if property values go down and vice versa if property values go up, the agency said.

Monday’s meeting is the first of several that will be held over the summer.

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