The commission met in regular session Wednesday November 8th.
It was a pretty light agenda; the main subject being whether to continue with the five-year tax forgiveness program in what is called the Discretionary Formula. The program was approved by the state legislature years ago as a means of allowing counties and cities to encourage economic development. The relevant statute, 10-6-35.2, states this: “Any structure…shall, following construction, be valued for taxation purposes in the usual manner. However, the board of county commissioners of the county where the structure is located, may adopt any formula for assessed value to be used for tax purposes. The formula may include for any or all of the five tax years following construction all, any portion , or none of the assessed valuation for tax purposes."
In 2001, Meade County adopted a forgiveness formula of 20-40-60-80-100 for commercial businesses for buildings valued at $30,000 or more, which was consistent with all the other counties in the state. The commission changed that to 0-0-0-0-0 in 2010, in an effort to set us apart from other counties; and until recently was one of only two counties statewide to do so, as Fall River County has apparently also recently adopted this formula. In 2012, the commission expanded the formula to cover Ag structures valued at greater than $10,000.
Until recently, the commission believed, and actually had it confirmed by the Department of Revenue, that the state made up the “lost” tax dollars to the school district. When pressed, though, they were unable to show proof, and Auditor Lisa Schieffer confirmed that each year, she is given an added levy to be spread out over all the other taxpayers in the school district. So we put this on the agenda to review two things: 1) Is this fair to all the other taxpayers, and 2) Is it having the desired effect of bringing in new businesses and new construction to increase the tax base.
What we found out is this: The taxpayers have made up an average of about $62,500 annually to the school district since 2012. By my math (which is a little sketchy; I dropped Math in college - but then I took Business Math and got a B+), that comes to about 2 cents per thousand of valuation for each taxpayer. Additionally, the county’s “lost” revenue has averaged about $83,000 in tax forgiveness over the same time period; the taxpayers have not been asked to make up that difference - we just got by on less.
The main question we had, though, is it bringing in new businesses to the county, providing more jobs and increasing our tax base? Scott Peterson of Scott Peterson Motors, Aaron Schoen of Jake’s Collision Repair, Ryan Aldren of Rasmussen Mechanical, and the mayor and city manager of Summerset, along with a developer from that city, all spoke to the commission about their experience with this formula, and seven other businesses provided letters. Scott testified that after Storm Atlas, which destroyed the old Jacobsen Ford complex he had recently purchased, that he seriously considered not rebuilding - just walking away. The Discretionary Formula was the over-riding factor which convinced him and his wife, Susan, to build the multi-million dollar complex at Exit 32. I believe he said they now employ 28 people, up from eight in the old location. Aaron re-located from Belle Fourche to the space vacated by Scott; and again, he stated the Formula was the main reason why. Ryan said the Rasmussen family wasn’t even considering Sturgis as the location for their business until they were advised of the Formula; and said without it, they would not have built here. The mayor’s contingent confirmed what the others told us in regard to their city. Additionally, we heard that Butte County and the city of Spearfish, after seeing the success it’s had in Meade County, are now considering adopting the same Formula. I really hope they don’t.
So the board majority affirmed the continuation of the Formula with no changes. The revenue is now starting to come into the county and school district from the early partakers of this policy, it’s brought many new businesses to our county, and I like the fact that Ag also qualifies for the tax break. It looks to me like it’s really paid off.
God Bless Meade County.