Bill would cut taxes for river district’s residents

A state lawmaker from Aberdeen has introduced a bill that, if passed, will reverse 2008 legislation that allowed the James River Water Development District to raise its taxpayer-funded income by 183 percent.

Republican state Sen. Al Novstrup believes there’s substantial support among state lawmakers to reverse HB 1245, which resulted in $1.5 million in new taxes this year for residents in the James River Water Development District, an entity engaged in watershed improvement projects along the river from Aberdeen to Yankton.

Speaking from Pierre Wednesday, Novstrup said that the increase has become a “warm issue” for both constituents and legislators.

The real issue at this time is not the use of James River district’s funds, said Novstrup, but a failure of legislators to comprehend the ramifications of House Bill 1245, which was passed in a previous session.

“No one understood the implications of HB 1245 when they voted for it,” he said.

Passed during the 2008 legislative session, HB 1245 approved the redistricting of several water develop- ment districts — including the JRWDD — but Novstrup said he and other legislators weren’t aware that the bill would result in such a dramatic tax increase.

The bill expanded the JRWDD from nine to portions of 13 counties, and it included a mechanism for joining or leaving the district.

But Novstrup said it also included a final provision that slipped by lawmakers.

The final sentence in the bill said that any water development district with revised boundaries is considered a “new taxing district.” That provision gave the districts up to two years to set their tax levies to a maximum of 30 cents per $1,000 of assessed valuation. It also eliminated an opt-out that dramatically increased James River district incomes starting in 2001. The bill, however, does not eliminate the possibility of future opt-outs.

Novstrup said that in House committee testimony, JRWDD Manager Darrell Raschke testified several times that the tax increase effects of HB 1245 would be minimal for those counties already in the district. Novstrup said in that testimony leading up to HB 1245, Raschke had an obligation to tell the whole story and, according to Novstrup, Raschke failed to explain the bill’s final provision.

“If you leave out a section,” said Novstrup, “you’ve misrepresented by omission.”

In a telephone interview Wednesday with The Daily Republic, Raschke had little sympathy for Novstrup’s position.

“I apologize if they didn’t understand it. But I’m from West River South Dakota. I went to a little country school, and I was taught to read. Is it my fault they didn’t read the bill? I think the job of a legislator is to read every bill they vote on,” he said.

Under the HB 1245 change, James River levies for Davison County rose from 10.1 cents per $1,000 of assessed valuation in 2008 to 24.3 cents in 2009. Taxes levied in 2009 are payable this year.

In real dollars, that means Davison County taxpayers paid a total of $100,696 last year and will pay out $250,384 this year — a 149 percent increase. Hanson County’s JRWDD levies jumped from $33,224 to $80,713, a 143 percent increase.

Overall, the total 2008 to 2009 increase for the entire district jumped from $815,000 to $2.3 million — 183 percent increase.

Novstrup has introduced SB184, which would roll back taxes to 2008 levels.

Novstrup told The Daily Republic that SB 184 will correct last year’s legislative oversight.

Along with reverting to 2008 taxing levels, SB 184 would mandate that future tax increases would be limited to growth and an index factor. The bill also has a provision that gives more local control on inclusion or exclusion from development districts. Such a measure could be referred to voters by a four-fifths vote of county commissioners or a petition representing 5 percent of voters in the existing or proposed district.

“Times are tough,” said Novstrup, “and most government entities have had a zero increase in income. For this government entity to say that taxpayers owe them a 149 percent increase is pretty outrageous.”

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