Task force weighs Senate Bill 96 sales-tax credit as cash-flow analysis flags multi-year reserve declines

At a June 9 meeting of the Yankton County Budget & Policy Task Force, members reviewed limits on property-tax growth, the local effects of Senate Bill 96 and a preliminary cash-flow analysis that shows the county’s reserves have fallen sharply over recent years.

The presenter explained that county budgets are limited by state rules to CPI plus counted growth — the example used for planning was 2.5% CPI plus about 0.9% growth — and that reappraisals and classification caps can trigger rollbacks that affect the entire owner‑occupied class. "The county budget can go up by CPI plus growth. So it's 2.5% plus growth," the presenter said, underscoring the narrow margin for revenue increases.

On Senate Bill 96, staff summarized the bill as creating a roughly one-half–percent special sales-tax fund the state would collect and remit to the county to offset the owner-occupied levy. "It is a half half a percent. It'll go ... it's a special fund that will be created just for to offset the owner occupied levy in Yankton County and just the county levy," the presenter said. The presenter also noted common state exemptions would carry through (for example certain medical equipment and specific exempted items) and that the law's effective date (statutory July 1) plus local implementation timing means collections would not affect the 2027 levy year used for 2028 payable taxes.

Task-force members discussed enactment options: the county commission could adopt an ordinance or resolution, or refer the measure directly to voters; any local enactment could be petitioned for a public vote, and staff advised consulting the state's attorney for definitive legal guidance. The group emphasized that while SB 96 would help owner-occupied taxpayers, "it's not going to solve financial challenges" facing the county on its own.

The meeting also focused on a cash-flow analysis the task force is developing to show monthly liquidity and identify months when inflows are insufficient for obligations. The presenter recommended establishing a formal minimum-fund-balance policy but cautioned that current reserves may be too low to fully fund such a policy immediately. "We feel based on this it would be advisable to have a policy for minimum fund balance," the presenter said.

Members reviewed multi-year cash trends: the presenter said cash reserves dropped by about $2.2 million in one year, by roughly $3 million the next, and more recently by about $560,000, a pattern described as "precipitously dropping." Those figures drove calls for tighter budget controls and targeted departmental reviews, particularly in highway/roads & bridges and the sheriff’s office, where peer comparisons showed variance in staffing, pay and jail cost-per-day metrics.

Staff acknowledged current limits on data completeness: the presenter said the auditor’s office has limited staff capacity to pull the detailed account- and transfer-level data needed to finalize the cash-flow model. "We don't have enough data to really to really determine the accuracy of this cash flow report," the presenter said, and the task force agreed to request additional account detail and run department-level cash-flow analyses (enterprise funds such as roads and bridges were specifically mentioned).

The subcommittee agreed to forward the first two revised financial reports (the shorter budget report and the quarterly cumulative-variance report) to the full commission for review while continuing work on the cash-flow analysis and scheduling deeper dives into prioritized departments. The group set follow-up meetings and asked staff to involve department leaders in any targeted reviews.

Next steps: staff will seek additional account detail from the auditor’s office, refine the cash-flow analysis with department-level inputs, and prepare the recommended financial reports for the commission; the commission will then decide whether to take up SB 96 locally or refer it to voters after getting legal advice.