South Dakota Constitution Article 11 - Revenue and Finance.
South Dakota Constitution – Article XI: Revenue and Finance
Article XI of the South Dakota Constitution lays out the rules and principles governing the state’s taxation, public revenue, debt, and financial procedures. This article ensures fiscal responsibility and provides limits on how the state and local governments can raise and spend money.
🔹 Section-by-Section Summary of Article XI:
§1 – Taxes to be Uniform
Taxes must be uniform on the same class of property within the same jurisdiction.
The legislature may classify property for taxation and exempt certain categories.
§2 – Use of Public Funds
Public funds may only be used for public purposes.
Direct or indirect aid to private entities is generally prohibited unless authorized.
§3 – Credit of the State
The state may not lend or give its credit to any individual, association, or corporation.
Exceptions may apply to specific economic development programs, as allowed by constitutional amendment.
§4 – State Debt Limit
The state cannot incur debt exceeding $100,000 except for specific purposes (e.g., suppressing insurrection, repelling invasion).
Larger debts must be approved by a vote of the people.
§5 – Sinking Fund
A sinking fund must be established when the state incurs debt, to ensure timely repayment.
§6 – Local Government Debt
Municipalities and counties must also seek voter approval for debts exceeding 5% of taxable property, except in emergencies.
§7 – Special Assessments
Local governments may levy special assessments for improvements (like streets or sewers) that benefit specific properties.
§8 – Highway Funds
Revenues from motor vehicle licensing and fuel taxes are restricted for highway and road construction/maintenance purposes.
§9 – Balanced Budget Requirement
The state must not spend more than its estimated revenue.
South Dakota is constitutionally required to maintain a balanced budget.
§10 – Trust Funds
Details management of permanent school and other trust funds; prohibits the loss or diversion of these funds.
§11 – Prohibited Taxes
The state is prohibited from imposing inheritance taxes, personal income taxes, and corporate income taxes, unless approved via constitutional amendment.
🧾 Key Themes:
Fiscal Responsibility: Limits on debt and mandates for balanced budgets.
Tax Fairness: Uniform taxation and property classifications.
Public Purpose Doctrine: Strict limits on using public funds for private benefit.
Highway Revenue Protection: Ensures transportation funds are used only for infrastructure.
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