PIERRE, S.D. – Property tax relief has emerged as the dominant issue of the 2026 South Dakota legislative session, with both Republican and Democratic leaders acknowledging voter frustration while sharply disagreeing on how — or whether — the problem can be fixed this year.

Republican leaders say rising property taxes reflect years of increased government spending and warn that quick fixes could simply shift costs rather than provide lasting relief. Democrats counter that many proposals under discussion would move the burden onto renters, seniors, and low-income households without addressing the root causes.

Senate House Leader Scott Odenbach said lawmakers are weighing whether to pursue tax shifts or reduce spending to provide relief.

“I’ve said many times, I said it last year, it’s the spending,” Odenbach said. “We often reflexively around here, people go and say, ‘How are these various government agencies going to absorb a cut if there is one?’ And I’ve tried to make us think as well how the taxpayers who are paying the property taxes have absorbed the tax increases they’ve had to over the past five years.” 

Odembach said property tax increases have forced families to cut their own household budgets, a reality lawmakers must consider as they debate potential reductions in state spending.

Democratic leaders said they agree that property taxes are a concern, but argue that proposals tied to sales tax increases or levy shifts would harm people who do not own property.

House Minority Leader Erin Healy said some ideas being discussed look good on paper but would move costs to other groups.

“The owner-occupied property tax policy that we’ve heard floating around — by raising sales tax, you’re not actually lowering costs,” Healy said. “You’re shifting that burden on to other people, onto renters, onto seniors with fixed incomes, and working families who have already spent most of their paycheck just to get by.” 

Healy said Democrats are still searching for a solution that provides relief without cutting core services or shifting costs onto vulnerable residents.

Both caucuses acknowledged there is no clear consensus. Lawmakers from both parties said many of the proposals studied over the summer have failed to gain broad support, increasing the likelihood that any action this session could be limited or incremental.

Republican leaders also noted that significant property tax relief would require hundreds of millions of dollars, raising questions about how state government is funded and what services might be reduced.

As the session continues, property taxes are expected to remain central to debates over the state budget, education funding and the role of government spending.