[{"_1":2,"_87":-5,"_88":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,75],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},"mediaId",6135608,"mediaKeyId","5673311-42b2652dd248ce569c8522024126de0b","parentId",5673311,"title","City finance leaders warn sales-tax lag and property-tax cap will pressure future budgets; recalibration to begin","audioSeconds",1733,"startMs",1738000,"endMs",4488,"viewUrl","/Search/View?dp=1&key=5673311-42b2652dd248ce569c8522024126de0b&start=1738&end=4","thumbnailUrl","https://assets.pipeline.soar.com/5673311-42b2652dd248ce569c8522024126de0b/thumbnail_1738000.jpg","articleUrl","/articles/6135608/Sioux-Falls/Minnehaha-County/South-Dakota/City-finance-leaders-warn-sales-tax-lag-and-property-tax-cap-will-pressure-future-budgets-recalibration-to-begin","mediaUrl","https://secure.pipeline.soar.com/6135608-9536c7f457b132a2c1159f30e31131f1/orig.mp4?Expires=1771175199&Signature=Ny5YvLAHbKBS0Ew8BacMhafDZ7ThukVwf1MazVJppymLrNQnvLLYplgQ6ETrDS8khuFPD8E-AhX0k5l5R7wBvIdAJWlJRmLHtD-zX7IyaT-1ty36aIrw5Gfr7o8h9VqMOkF9O5VJ6LesEG-xBrq00SASnNvqEPpzE5u-Awo7MsE3lHpa5b~fyE2QtGCrU6JngbFyYe8yIwVqEMSjT23AXgRm-qD3KMxFEQpup81wrHnEXw1mvXnb1pduHv6PmU0E-k6ACWLELS~3LeJzQsyZlqXc6kkE7qd~27VLTco3i41HbqoIOqWnD7XbDQUUuq-bNgT-jxUc~cAgAgsk8-jF5g__&Key-Pair-Id=KUT5TJCACFTXG","author","City Council of Sioux Falls, SD","date","2025-07-15T00:00:00Z","article","City finance leaders told the Sioux Falls City Council on July 15 that a shortfall in sales-tax growth and the state’s newly enacted property-tax growth cap will reduce future city revenues and that staff will begin budget recalibrations as part of the 2026 budget process.

Why it matters: The city relies on a mix of property taxes and a first-penny sales tax to fund core services such as police, fire, streets and parks. Finance staff said the sales-tax slowdown and a cap on growth that limits how much new construction can raise property-tax revenue over the next five years will depress revenue growth and put pressure on reserves and future budgets.

Director Sean Pritchett and Budget Officer Tim Kanda described the immediate position and near-term projections. Pritchett said the recently enacted Senate Bill 216 places \"a cap now on growth for the next 5 years,\" which the city models as a 3% cap on growth. He explained that \"growth\" for city budgeting refers to new construction added to the tax base rather than market-driven reassessments of existing homes.

Kanda said city revenue performance through June was close to budget expectations overall but that sales tax is the primary source showing a lag. He said the city currently expects to come in about $3.8 million below sales-tax budget expectations for 2025 but that other revenues (permits and higher-than-budgeted interest income) and one-time budget savings are offsetting most of that shortfall this year. Kanda reported projected interest income of roughly $4 million compared with a $2 million budget, and he said building valuations have stayed near $1.1 billion in recent years (generating roughly $3.6 million in permit-related revenue).

On reserves, Kanda said the city's general fund reserves stood at about $81.1 million on Jan. 1, 2025 and that the council’s policy target is 25% of the expenditure budget (about $62 million). He noted that with current projections and a proposed one-time $5 million loan to the airport (to be repaid later), the city expects to end 2025 near the $81 million range — roughly $20 million above the 25% policy minimum but that the SB 216 effect reduces projected future reserves if not addressed.

Pritchett presented a 10-year outlook that models the SB 216 cap against the city's historic average property-tax growth (historically around 3.5%–4%). He said the city’s conservative estimate of lost revenue from the cap is roughly $26 million over 10 years under the model used at the meeting and that the effect grows over time because future revenues compound off a smaller base. Pritchett said that without recalibrations the city’s reserves could drop below the 25% policy threshold earlier than previously forecast.

Despite the warning about future impacts, staff recommended not cutting planned 2025 sales-and-use-tax capital expenditures now. They told the council they believe available buffers — one-time savings, deferred bond payments this year, and higher investment income — provide a $5 million cushion at a 1.5% sales-tax growth scenario and a larger cushion if sales taxes recover to 3%.

Councilors asked specific questions about options and constraints. Councilor Spellberg asked about tax and permit consequences if the state built a large project in the city; staff said such projects generally do not generate property tax for the city if owned by the state and that sales-tax effects would be primarily indirect. Councilor Thomason asked about taxing medical cannabis; staff said medical products are generally treated like other medical items for tax purposes and that the city lacks clear local authority to create a new tax without state authorization. Councilor Bassey asked whether the SB 216 cap affects tax increment financing (TIF); staff said TIF was generally excluded from the cap calculation but officials are working with county equalization staff to clarify implementation.

No formal council action was taken during the July 15 presentation; staff said the 2026 budget will be released the following week and that budget recalibrations and recommended adjustments would come through the regular budget process.

Numbers and clarifications reported by staff at the meeting: general fund reserves about $81.1 million as of Jan. 1, 2025; 25% policy target ~ $62 million; estimated sales-tax shortfall ~ $3.8 million for 2025; projected additional interest income ~$2 million above budget ($4 million projected vs. $2 million budget); building valuation trend near $1.1 billion and permit revenue roughly $3.6 million; staff-estimated 10-year revenue impact from SB 216 roughly $26 million (model-based).","mediaType","Video","parentTitle","Sioux Falls City Council Informational Meeting 7-15-25","oneSentenceSummary","City finance staff told the July 15 City Council that a sales-tax slowdown combined with a state cap on growth used in property-tax calculations will reduce future revenues and that staff will start recalibrating budget assumptions as part of the 2026 process.","taxTitle","Sioux Falls, Minnehaha County, South Dakota","taxId",2746,"location","headline","","shortSummary",{"_33":76,"_35":36,"_37":38,"_39":77,"_41":78,"_43":79,"_45":80,"_47":81,"_49":82,"_51":83,"_53":84,"_55":56,"_57":58,"_59":85,"_61":62,"_63":64,"_65":86,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},6135612,"Sioux Falls presents SHAPE 2050 draft trends; public review planned before final approval",583,135000,718000,"/Search/View?dp=1&key=5673311-42b2652dd248ce569c8522024126de0b&start=135&end=718","https://assets.pipeline.soar.com/5673311-42b2652dd248ce569c8522024126de0b/thumbnail_135000.jpg","/articles/6135612/Sioux-Falls/Minnehaha-County/South-Dakota/Sioux-Falls-presents-SHAPE-2050-draft-trends-public-review-planned-before-final-approval","https://secure.pipeline.soar.com/6135612-49494cace9e008b209db22d29005da29/orig.mp4?Expires=1771175199&Signature=hjtTZKarswXymogSvQbuDX2fRNEjG2rdRJKotUv8tG8QiRLNsCvonVAoVY0ZTFN31ugKC~LbytiE1VhgaDXQ0YUutebCyjyVotGfIuKmKb0yzF-9Vu0n1Yhl3EpeHPY-srxCkJUH-Go1y06sN1i336HS1xHZfnBYZkEr0V8SKsGyklxjKxwWY8~H0LnBzEpoda1eIBm3VROO9sLBShrBCWbmv5I6oLUQRl7l55uZONgmzVIM~VveX4R5BRA-mHwipFLbt1Mt4RSDLGwpcNv7-Dqyn-t0qak7GLVn4PvhzRtadIPLyxzUSCMBlapI5JQZ2Yfe8cBkpdLcPqGpwxE0HQ__&Key-Pair-Id=KUT5TJCACFTXG","City staff and their consultant presented draft trends for the SHAPE Sioux Falls 2050 comprehensive plan at the Sioux Falls City Council informational meeting on July 15, outlining housing, mobility, conservation, economic development, community resources and infrastructure as the plan’s six core priorities and saying the city will return the draft to the public for review.

Why it matters: The SHAPE 2050 plan will guide land use, transportation and capital decisions for the next 25 years in Sioux Falls and nearby jurisdictions; the council and staff said the draft will be reviewed again with the public and the advisory committee before coming to elected officials for formal approval.

Kevin Smith, planning manager with Planning and Development Services, told the council the SHAPE effort complements regional work such as the Go Sioux Falls metro transportation planning effort and is intended as \"a little more in-depth look at the next 25 years of growth and development, bringing forth policies and goals and objectives, things that we've heard from the community.\" Chris Shires, a planner with Confluence, summarized the draft trends developed from public engagement and a statistically valid community survey.

Shires presented six major trends the team heard: 1) housing and neighborhoods (support for housing at multiple price points and preserving existing neighborhoods); 2) transportation and mobility (walking, biking, transit, traffic safety and right-sizing parking); 3) conservation and resiliency (parks, trails, resilient public facilities and drought-tolerant landscaping); 4) economic development (infill, mixed use, downtown and biotech/healthcare focus); 5) community resources (services for people experiencing homelessness, education, childcare and indoor recreation); and 6) infrastructure and public spaces (design standards, street and utility planning and maintenance).

Shires told the council the team used pop-up events, neighborhood meetings, focus groups, stakeholder interviews and an online engagement site to collect input and that the next step is to return draft chapters to the public and the advisory committee. \"The goal being that and we're on track to wrap this up at the end of the year, that we'll have the draft done at the end of the year and then we can go through that official approval process the beginning of next year,\" he said.

Councilors pressed for clarification on several items. Councilor Sigheti asked about apparent differences between survey results and the draft trend priorities, noting that \"39% of the people talked about was addressing maintenance and repair across the city\" in early survey results and asking why maintenance appeared lower in the presentation’s list; Shires said the trend list was not presented as a strict rank order and that subcategories (including maintenance) had been prioritized internally and would be clarified in follow-up public vetting. Councilor Thomason asked whether respondents specified what they meant by \"indoor recreation;\" Shires said in-person and online comments used general terms such as \"community center\" and occasionally listed activities such as hockey or indoor courts but that the input was largely generalized and would be followed up.

City staff and the consultant also emphasized regional coordination: Smith said the SHAPE plan is being developed in coordination with nearby jurisdictions—Tea, Harrisburg, Brandon, Hartford and Crookston—to align long-range land use and transportation plans.

What comes next: Staff and consultants said they will schedule additional in-person and online review opportunities and update the city's SHAPE web pages and the online engagement site so residents and neighborhood groups can review draft chapters and submit comments. The team indicated the draft should be completed by the end of 2025 and then enter the city's formal approval process in early 2026.

The council did not take any formal action on the plan at the July 15 meeting; the presentation was informational and staff described further public outreach and draft revisions as the next steps.","City staff and consultants summarized six draft trends for SHAPE Sioux Falls 2050 at the July 15 City Council informational meeting and said they will return drafts to the public and advisory committee for review, with a goal to finish a draft by year’s end and begin the formal approval process next year.","actionData","errors"]

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City finance leaders warn sales-tax lag and property-tax cap will pressure future budgets; recalibration to begin

Sioux Falls presents SHAPE 2050 draft trends; public review planned before final approval