From the campaign
Property Tax Relief Without the Sales Tax Hike
South Dakota homeowners are being taxed out of houses they have lived in for decades. SB 245 trades one tax for another. SB 96 is the cleaner path. Here is how I would deliver real, permanent property tax relief without raising the sales tax on working families.
South Dakota homeowners are being taxed out of houses they have lived in for forty years. Young families are priced out of their first homes. Seniors on fixed incomes are watching their tax bills outpace their Social Security increases. This is the property tax crisis, and it is the most immediate kitchen-table issue in District 32.
The 2025 and 2026 legislative sessions did pass property tax relief. They did it the wrong way.
What SB 245 actually does
SB 245 passed in the 2025 session and takes effect July 1, 2026. The bill creates a property tax reduction fund using three-tenths of the sales tax, plus a one-time fifty-six million dollar transfer from state reserves. The Department of Revenue estimates up to a fifteen percent average property tax reduction for owner-occupied homes.
Sounds great. Read the next sentence.
The mechanism depends on a sales tax increase. South Dakota's statewide sales tax is scheduled to rise from 4.2 percent to 4.5 percent in 2027. Three-tenths of every additional sales tax dollar funds the property tax relief.
That is not relief. That is a tax swap. Working families who rent pay the new sales tax and see zero property tax benefit. Roughly one-third of South Dakotans are renters. Small businesses pay the new sales tax on every transaction. Senior homeowners who downsized out of their houses years ago pay the new sales tax with no offset.
That is why three citizen groups launched a referendum effort on April 29, 2026 to repeal SB 245. They are right to do it.
SB 96 is the cleaner path
The same 2025 session passed SB 96, which authorizes counties to impose an optional county gross receipts tax in exchange for reducing owner-occupied property taxes. Counties choose. Voters choose. Local control. No statewide sales tax hike.
That is the South Dakota way. We do not need Pierre to do this for us. We need Pierre to get out of the way.
What I would actually do
Property tax relief done right is three things.
One. Structural reform that caps the growth of assessed valuations. The single biggest driver of property tax increases is not the mill levy. It is the appraisal that keeps going up faster than people's wages. Cap the year-over-year growth in assessed valuation on owner-occupied homes. Pair the cap with regular reassessment so the system stays honest.
Two. Shift some school funding off of local property tax and onto the state. South Dakota has a school funding formula that puts an outsized share of the bill on local property taxpayers. A modest shift toward state general fund support reduces local property tax pressure without raising any other tax. The state's job is to manage the money it already collects better, not to find new things to tax.
Three. Spending discipline at the state level. The 2026 general appropriations bill, HB 1326, passed the House 50-17 and the Senate 25-9. It added eighty million dollars and twenty-six new state employees in one year. The 2025 budget bill added twenty-four FTEs the year before. Pierre has grown faster than the families it serves. That is the discipline problem behind the property tax problem.
What I will not do
I will not vote for a property tax relief plan that raises the sales tax on working families. Period.
I will not vote for a state income tax. The proof that an income tax does not reduce the sales tax is in every state that has both. South Dakota's no-income-tax status is the single most important thing protecting working family budgets in this state.
I will not vote for corporate tax carveouts that give one industry a special deal while homeowners and small businesses pay full freight. That is not economic development. That is favoritism.
Common questions
Property tax is the issue people stop me about on the street. Some of the most common questions are answered in the FAQ section below. Have one that is not there? Write to zac@zac4sd.com and I will answer.
Anticipated pushbacks · prepared responses
Common questions on this issue
These are the questions and concerns that come up most often. The responses below are my honest answers, not talking points.
- Q. Property tax cuts mean schools lose funding. Are you against education?
- A. Property tax relief does not mean cutting school funding. It means finding better ways to fund schools than taxing homeowners out of their homes. SB 245 uses existing sales tax revenue for relief. SB 96 allows counties to choose sales tax over property tax. There are multiple ways to fund schools that do not punish seniors on fixed incomes or young families.
- Q. The state needs that revenue to function. You can't just cut without cutting services.
- A. The 2026 G-Bill added $80 million and twenty-six new state employees in one year. That is not the foundation of essential services. That is growth for growth's sake. When I talk about spending discipline, I mean asking hard questions about every new dollar and every new position.
- Q. No income tax means we rely on sales tax, which hits the poor hardest.
- A. The best protection for working families is keeping the overall tax burden low. A state income tax has never reduced the sales tax anywhere it has been tried. It has simply stacked one on top of the other. South Dakota's no-income-tax status keeps more money in working families' hands.
- Q. You opposed SB 63, the apprenticeship office. Don't you care about workforce development?
- A. I fully support workforce development. What I oppose is creating a new state office with seven new employees and an $830,000 annual price tag funded only for two years with no plan for year three. Workforce development can be pursued through existing agencies and private partnerships.
- Q. Data center tax incentives bring jobs. Aren't you against economic development?
- A. Economic development that gives tax breaks to massive corporations while raising the burden on homeowners is not economic development. It is corporate welfare. Real economic development grows the tax base broadly, not by privileging a handful of favored industries.
- Q. Property tax relief sounds great, but how do you actually make it permanent?
- A. Through three steps. First, structural reform that caps the growth of assessed valuations. Second, shifting some school funding off of local property tax and onto the state. Third, long-term spending discipline. No single bill fixes this. A sustained plan does.