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Sturgis TIFs included in new report by SD Department of Revenue
Associated Press & News Reports - July 10, 2018

PIERRE, S.D., -- The South Dakota Department of Revenue’s inaugural Tax Increment Financing (TIF) annual report is now available online.

Rapid City leads the state in number and increased value of TIFs. Rapid City’s 23 active TIF districts are producing $482 million in new property value  waiting to be placed back on the books for the city, county, and school district. Aberdeen and Mitchell both have 18 active TIF districts, producing  $88 million and $55 million, respectively, in increased property value. Sioux Falls is using 14 TIF districts to add $130 million in taxable property value.

TIFs are a tool used by municipalities and counties to redevelop areas or grow a local economy by offsetting the cost of public infrastructure improvements by lending taxpayer money to developers.  The loan to developers is repaid by additional property tax revenue generated by the newly developed property.  Once the taxpayer funded loan to the developer is paid off, the increased tax revenue funds city, county, school district and other taxing jurisdictions.

According to analysis by the Dakota Free Press, in the listed active TIF districts combined, tax increment financing has funded at least $918 million worth of projects that have added $1.413 billion in taxable value to property that was worth $327 million pre-development.  The $1.413 billion in new taxable value won’t go on the tax rolls until the new taxes from those many improved properties have paid off the developers’ costs.

Among the 191 TIFs reported, two TIFs are losing money for counties: Minnehaha County TIF #2 for the SDN Communications facility has lost 23% of its pre-TIF base value, and Rapid City TIF #75 for the St. Joseph Street apartment project has lost 51% of its pre-TIF base value.

The report lists  39 cities and 22 counties in South Dakota that have  190 active TIF districts. The report contains the classifications for TIF districts as authorized by state law, a TIF district summary and a breakdown of each of the 191 active TIF districts. Of those 191, four of them are in Sturgis; two of them are for residential developments.

The annual report can be found at https://dor.sd.gov/Taxes/Property_Taxes/PDFs/2017TIFAnnualReport.pdf

 

 



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