Committee Sends Bill Letting Local Governments Keep Unused CPI to Floor With No Recommendation

The House Tax Committee voted to send House Bill 13-17 to the House floor with no recommendation after split testimony over whether removing the three-year cap on carrying forward unused index/CPI increases would promote local budgeting flexibility or expose future taxpayers to sudden large levy increases.

Sponsor Representative Travis Ismay (District 28B) framed the bill as restoring local flexibility, saying local governments that conservatively reduce budgets should not lose baseline authority and that "this will allow them to do that" without being forced to raise budgets each three-year cycle.

Wendy Semler of the Department of Revenue opposed the measure, stating the current three-year carryforward "was intentionally designed to provide budgeting flexibility" while also limiting the potential for accumulation of unused authority. She warned that allowing indefinite carryforward could permit a jurisdiction to accumulate decades of unused authority and enable a future governing body to enact a large tax increase in a single year.

Speakers including representatives of the South Dakota Farm Bureau and the Retailers Association echoed concerns about potential long-term impacts on property owners and urged deferral. The sponsor and some supporters argued the bill simply returns local authority and does not create additional taxation beyond the existing 3% plus growth cap.

After competing motions and roll-call votes, the committee ultimately approved a motion to send HB 13-17 to the floor with no recommendation, allowing the full House to debate the measure.