A person climbs the stairs of the South Dakota Capitol. (Joshua Haiar/SD Searchlight)
A task force studying costly legal services recommended a state public defender’s office last month to ease the burden on counties when defendants can’t afford a lawyer.
But Sen. Jim Mehlhaff, R-Pierre, a member of the task force, told legislators during a separate study committee meeting on county funding issues Wednesday in Pierre that the recommendation, while a step forward, “does not provide a lot of relief to counties.”
That’s because the state office would only handle appeals and abuse and neglect cases. The projected budget to set up the statewide office would be $1.4 million and would save counties roughly $1.5 million, but the proposal doesn’t address other aspects of indigent legal service costs. South Dakota is one of a few states across the country that leaves indigent defense responsibilities to counties.
Mehlhaff is also a member of the county funding committee, which is studying ways to relieve counties of expensive services and find new sources of revenue. He added that it would take “a long time” to set up an office to handle all indigent legal work in the state.
“I think the larger counties would benefit more than the smaller and intermediate counties from such an office,” Mehlhaff added.
The cost of indigent legal services is top of mind for county commissioners across the state, representatives of the state county commissioners association told legislators earlier this summer.
“In a nutshell, unfortunately, I don’t think the work that committee is doing is going to resolve or provide any short term relief for the counties,” Mehlhaff said.
Another suggestion discussed by the legal services task force is a request for one-time money for cash-strapped counties and an extensive study in seven counties where little data is available on public defense costs and outcomes in court. Representatives from the county commissioners association also suggested capping a criminal indigent case expense at $10,000 for a county, with the state covering the rest.
The summer study on county funding and services is casting a wider net, including a discussion on opening other revenue streams for counties, such as sales taxes, administrative fees or diverting some alcohol tax funds to counties.
While cities can implement a sales tax up to 2% and the state’s sales tax is 4.2%, counties cannot implement a sales tax. Legislators on the committee discussed allowing counties to set their own sales tax rates, like cities, or adding a statewide sales tax with funds distributed among city and county governments.
The suggestion of a tax increase was controversial among legislators on the committee, in part because a majority of legislators passed a law last winter temporarily reducing the state sales tax from 4.5% to 4.2%.
Sen. Randy Deibert, R-Spearfish and vice chairman of the committee, told legislators that in a recent estimate his home county generated about $787 million in taxable sales in fiscal year 2022. If the county implemented a 2% sales tax on that amount, it would receive $15.8 million in revenue. If it implemented a 0.2% sales tax, it would receive $1.57 million.
Rep. Neil Pinnow, R-Lemmon, told legislators that a sales tax for counties is not “the golden goose,” but he’s willing to explore how it could work for all of South Dakota’s 66 counties.
“If we looked at a sales tax for counties, we’d have to look at a formula so rural counties like Ziebach could get a base fee, where every county got a minimum,” he said. “That’s a long term fix. In my view we have to stabilize the counties right now to give us time to do long-term legislation to solve the long-term problem.”
Pinnow admitted that the political challenge of adding a sales tax for counties could be comparable to climbing Mount Everest.
The chairman of the summer study committee, Rep. Roger Chase, R-Huron, told legislators that “little approaches” ranging from small county sales taxes to administrative fees could be successful.
“We don’t have a grandiose plan that we’re going to raise sales tax by 2% across the state of South Dakota and that it’s all going to the counties,” Chase said. “We know it’s not going to work and know that it can’t work.”
Legislators brainstormed a list of possible legislation that could be introduced at the 2024 legislative session beginning in January. The commission will officially recommend legislation at a later meeting this year.
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