Ed and Tammy Davis have lived in their Black Hills cabin between Johnson Siding and Pactola Reservoir for 21 years.
The couple moved to the Black Hills in the early 2000s when Ed, who served in the military for three decades, was transferred to Ellsworth Airforce Base. Their 1,600 square foot cabin sits on an acre of land.
“Even when we bought our property, it was fairly expensive up in the hills," Ed Davis said. "We felt very fortunate we could live up here.”
The couple hopes to pass their home on to their children and grandchildren. But recent spikes in property taxes have the Davises worrying whether they’ll be able to hold onto their cabin. Between property taxes and insurance, it costs the Davises $600 a month to live in a house they’ve paid off.
“It’s crazy. You haven’t done any upgrades or anything like that, but your property taxes go up and go up and go up," Davis said. "They don’t have any justification for it, you know?”
The Davises are retired and on a fixed income. Ed is a disabled veteran.
Pennington County recently assessed the cabin at $485,000. Ed said that’s more than double what they paid for it.
“They’re just going to tax us right out of our property, is what they’re going to do," Davis added. "Eventually—the guy that can afford the taxes is going to be living in this house instead of the guy that worked hard for it.”
That’s something lawmakers sought to address during the 2025 legislative session, which mostly concluded in the middle of March.
Of the dozen proposals introduced to bring property tax relief, lawmakers passed only one. For the Davises, it would allow them to freeze their property taxes at the current rate.
“When you look at property taxes it’s such a frustrating thing because all you can do is rearrange the chairs," said Jim Mehlhaff, R-Pierre, the Senate majority leader, during a recent press conference. "Because there’s some places around the state where the property tax pain is pretty acute. There may be a revolt.”
Mehlhaff points to a recent ballot question in North Dakota to remove property taxes altogether. The proposal failed but still concerns many.
State lawmakers passed Senate Bill 216, which was crafted by a working group convened by Gov. Larry Rhoden. It provides a five-year tamp down on total assessed value of all property within a county. That value cannot increase by more than three percent. In addition to increasing market value thresholds, it also increases income amounts for who qualifies for an assessment freeze.
That enhanced eligibility is something Bob Paul, with a group called Tax Relief for Property Owners, says he really likes.
“With the increased income eligibility and increased valuation, that’s going to put a lot more elderly people into that program that in the past did not qualify for it," Paul said.
Still, Paul said he would like to see something done with the rapid rise in property tax valuation. The group backed a failed proposal that would have brought valuations down to their pre-pandemic level and then cap increases by three percent.
“Our thinking is if we can get those valuations down and get them under control, then we have more control over property taxes," Paul added.
Still, others say the property tax issue comes down to spending by taxing districts. Lawmakers established an interim committee to look at reducing property taxes.
According to the state Department of Revenue, just over 56 percent of property taxes go toward schools.
In addition to a legislative fix, Republican Rep. Karla Lems says an interim legislative group aimed at reducing property taxes should look at the education funding formula.
"That’s kind of been the elephant in the room. No body wants to go there, but we’re going to have to tackle that," Lems said. "I know it’s very complicated.”
The basic structure of the state’s education funding formula goes back to 1995, and is calculated based on several factors, including a targeted ratio of teachers to students. So, the more students a district has, the more the formula calculates the total need. A portion is paid for by property taxes, with the state paying the remainder.
Gov. Rhoden said he’s unaware of any proposals to change the education funding formula, but that a lot of effort has been put into the current funding system.
“We'll always have the debates on whether or not we're funding education adequately or not and the percent of the increases, but I'd be hard pressed to think that they have anything, you know, I won't sell them short or prejudge them, but we've got a pretty sound education funding formula.”
The Legislature’s property tax study group has not yet announced its membership, nor its first meeting date.
