Week 7 – Session 2026

Pictured here with Cooper Falkenhagen, a student at A-B-O School in Onida.

Welcome back to my latest legislative update for this session. I am writing this update on Thursday, February 26th. This week included "crossover day" (which was Tuesday), so the pressure to get House bills out of this chamber is over. We are now focusing on surviving Senate bills, but I would be remiss if I didn't acknowledge some disappointments I had this week as well.

Two bills that I had been heavily involved with found their demise in House action this week.

HB 1308, if amended, was an effort to raise the state sales tax from 4.2% to 5%. This would have allowed the additional revenue coming into the general fund to:

·       Eliminate the sales tax on food.

·       Lower the mill levies on general and special education by about half.

·       Reduce owner-occupied property taxes by approximately 17–20% for city residents

(and even more for those in the county).

·       Provide modest revenue increases to the "Big 3" (K-12 public education, state employee

salary increases, and support for Medicaid providers).

When the amendment failed to garner enough support from House members, the original HB 1308 came into play. The features of the unamended bill included a two-step increase in the state sales tax: from 4.2% to 4.7% in the first year, then a climb to 5.0% in the second year. Under this version, the increased revenue would have been applied to bring general and special education mill levies down to zero, achieving a robust 29% to 40% decrease in owner-occupied property taxes. It also included a more generous percentage increase in funding for the Big 3.

After much debate and discussion, the vote on HB 1308 didn’t garner enough support to pass. In fact, in my opinion, it went down decisively. Several of us worked on this bill for weeks; with the help of the very competent staff from the fiscal department of our Legislative Research Council (LRC), our numbers were solid and accurate. Representative Czmowski’s presentation of HB 1308 to our fellow Representatives was flawless.

Unfortunately, raising one tax to offset others simply didn’t find a receptive audience. We learned just how serious some are about lowering property taxes. The good that came out of the exercise was running the numbers and discussing at length the goals of providing the Big 3 with adequate funding and lowering property taxes by shifting... ...towards another revenue source has raised the discussion of what is possible and what isn’t. Any kind of tax increase needs a two-thirds majority vote, and that is not easy to get from any legislature I have been a part of. As I leave the discussion on HB 1308, the positive is that discussions go on and my colleagues are more "clicked in" to the realities of possible solutions to the most talked-about issue this session.

The other bill that went down to defeat this week was HB 1113. I had invested a lot of time in this bill, having worked on it since last session, and I felt a little empty when I lost the effort by a single vote.

This bill would have allowed the South Dakota Housing Authority to set up a down payment assistance program for people looking to buy a manufactured home. Manufactured homes represent an excellent opportunity for homeownership, as the per-square-foot price for these homes is at least half of what a conventional stick-built house costs. Furthermore, these modern and efficient homes appreciate in value, unlike mobile homes of the past.

There are tradeoffs, to be sure, but the value is there. Since the Housing Authority didn't have any programs for this category of housing, I thought it was time to pursue a program funded by a $5 million transfer from an existing housing infrastructure fund that hadn’t been robustly used.

Because of the repurposing of funds from infrastructure to a down payment assistance program, the vote required a two-thirds majority, and unfortunately, I fell short. When I asked some of my colleagues why they didn't vote for it, some explained that they philosophically cannot support a government program as the answer to a problem that could be overcome by stricter personal budgeting and better spending choices.

I respectfully disagree with some of that sentiment—especially since the down payment assistance was a 0% loan that had to be paid back when the title of the home changed hands. While it was frustrating, I chose not to get down about it and instead move on to other challenges and opportunities.

I want to thank the professionals at the South Dakota Housing Authority; they were great to work with and provided excellent information and suggestions on how this program could work. If I am back for another term, I am going to take another run at it and maybe tweak it a bit to find a little bit more support. One must stay optimistic. 

Thank you for reading and I appreciate the texts and emails you have sent me. See you next week.

– mw