Rapid City, SD – As volunteer spokespersons for the Vote Yes January 20th effort, and more importantly advocates for decades now for our community and smart growth that benefits all of us; we (Mark Merchen, John Way, Representative Derby) have spent hours making sure we had our facts correct, as we sought to help our community make an informed (not emotional) decision regarding the Destination District vote January 20th. To that end we provided to the Team Rapid City effort the content at https://voteyesjan20.com/
As we wrestled this topic of TIF, we often would say to each other “well that person should know that” as being an “authoritative source” to provide the “facts” regarding a particular element of the “TIF is good, TIF is bad” debate.
One of those “authoritative sources” we reached out to was South Dakota Department of Revenue Secretary the honorable Michael S. Houdyshell. This presentation will not be sufficient to relay all we discussed in multiple conference calls and emails, but we asked Secretary Houdyshell if we could provide this word for word summary statement in an email he sent.
What I can say, though, is that new valuation is generally a benefit to all property owners, because the tax burden is being spread across more value.
Once the TIF is dissolved and the valuation is added to the books, this new growth (along with other growth over time and general market reappraisal) should help hold property tax levies down.
One of the other “authorities” on TIF is Mr. Toby Morris, Managing Director of Colliers Securities LLC. Toby is a past commissioner of the South Dakota Governor’s Office of Economic Development and has arguably put together more Tax Increment Financing funding than anyone else in the State. At a recent Elevate Rapid City forum on TIFs, Mr. Morris provided the following chart that seems to further validate Secretary Houdyshell’s summary statement above:
TIF Impacts in Rapid City Increased Valuation = Lower Mill Levies
The other “authoritative source” closest to the TIF and revenue history and “facts”, is the Rapid City Finance Director Daniel Ainslie and TIF Staff Expert Mike Dugan.
As to the impact of TIF in terms of valuation increases, lower mill levies, and the associated new tax revenues to fund our city, schools, county and public services those TIF project generates — at a recent public forum Mr. Ainsley’s office provided the following facts in an informational circular.
The original assessed valuation (base value) of the current active TIF districts in Rapid City was $108,565,899 before the TIF was approved. The 2024 certified equalized tax valuation of these same districts was $556,040,356. A gain of $455,474,457 in property tax value due to new development.
These new valuations, and the associated increase in property tax revenues to the community when these TIF mature, WOULD NOT BE THERE “BUT FOR” the City Council agreeing that the applicants require statement that the development projects were not economically viable without the TIF consideration by the City Council.
Are there any development projects that applied for TIF, and were denied approval by the City, that went forward anyway? The answer is no.
Here is the real numbers that have caused the mill levies in Rapid City, the School District, and the County to go steadily down since 2018.
The original base value of all Rapid City TIFD’s that were approved and now dissolved was a combined $358,430,380. The current 2025 valuations of these same districts is $4,232,937,282. A gain of $3,874,506,902.
To apply Secretary Houdyshells summary comment: Once these TIFs are dissolved and the valuation is added to the books, this new growth (along with other growth over time and general market reappraisal) should help hold property tax levies down.
TIFs are good for our community and “but for” the approval of those TIF developments, those projects would not go forward and would not generate long term, new growth and help hold property tax levies down for the rests of us. Vote Yes on January 20th.
Submitted by Mark Merchen, Economic Development and TIF Subject Matter Expert; and John Way, Retired Banker with 42 years of banking experience and lender of over a dozen TIF projects
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