Lawmakers voted down two proposals this week that would have shifted financial resources away from schools and into city coffers. Both efforts were backed by the South Dakota Municipal League, the advocacy organization representing city government officials.

Legislators voted down a proposal Wednesday that sought to change the make-up of local boards of equalization, shifting majority control to school districts. Schools would have been required to assume administrative costs of conducting the equalization meetings. By rejecting SB 97 on a 21-13 vote, municipal governments will continue to have majority representation on equalization boards, which act as a first-line appeals process for local property valuation. A school board member from each school district will continue to serve on each panel.

Rep. Shantel Krebs, R-Renner, tried to convince lawmakers that school districts needed to assume control of the boards because schools, not municipalities, receive the bulk of property taxes. She chided school boards not showing up to equalization meetings and for not wanting to assume the responsibility for valuation appeals.

“That one school board member that should be on the local board of equalization usually doesn’t show up,” Krebs said before suggesting that the biggest beneficiaries of property tax dollars should be willing to show up and talk to citizens about their property tax concerns.

Sen. Mark Johnston, R-Sioux Falls, spoke in opposition to the plan. He chronicled e-mail communications from school board members, county commissioners and city officials – all of whom he said opposed the change.

“If the counties don’t want it, if the school boards don’t want it, if the city counselors don’t want it – what are we doing,” Sen. Johnston said.

Other lawmakers argued against the change because they believe the current process is better for property owners. Sen. Stan Adelstein, R-Rapid City, characterized the proposal as “grossly unfair” to property tax payers because schools have a greater interest in higher valuations.

FINE REVENUE

The Senate Judiciary Committee voted down an attempt Thursday by the Municipal League to reverse a recent South Dakota Supreme Court ruling that concluded city governments were improperly enforcing traffic violations on state highways.

Fine revenue collected from a violation of municipal ordinance flows to city governments. When revenue is generated from a traffic violation on a state highway, the money goes to schools. By using the improper enforcement procedure, city governments were collecting money for the city’s coffers at the expense of the state’s school districts. The issue was settled by the Supreme Court last year, when the Court determined that the South Dakota Constitution requires all revenue from state fines be distributed to schools. The Municipal League is pushing SB 164 to try to counter the constitutional mandate.

Dick Tieszen, a lobbyist representing ASBSD, testified in opposition to the legislation, urging lawmakers to ignore the back-door attempt subvert the Constitution and divert funding from the K-12 schools.

Yvonne Taylor, the executive director of the Municipal League, countered Tieszen’s testimony, arguing that the money isn’t being diverted from schools because cities have been following the procedure for years.

Sen. Mike Vehle, R-Mitchell, voted against the measure, arguing that the state sets traffic laws for state highways and the Constitution clearly requires the money to go to schools.

Members of Senate Judiciary deferred the legislation to the 41st legislative day on a 4-3 vote, which typically kills the measure. However, ASBSD lobbyists have confirmed that the Municipal League is attempting to revive the bill using a legislative maneuver called a “smoke-out.”