South Dakota Ends Fiscal Year with $63 Million Operating Surplus
PIERRE, S.D. – Today, Governor Larry Rhoden announced South Dakota closed the state fiscal year 2025 budget year with an operating surplus of $63 million.
“South Dakota is a leader in our nation – especially when it comes to disciplined financial management,” said Governor Larry Rhoden. “We will continue to be careful stewards of taxpayer dollars by making wise long-term investments, maintaining conservative fiscal policies, and only spending within our means.”
The surplus included $41 million in excess revenues and $22 million in spending below what was budgeted.
The Bureau of Finance and Management (BFM) also published “South Dakota: A Model of Fiscal Strength,” a document highlighting South Dakota’s accomplishments as one of the best financially managed states.
“South Dakota’s disciplined financial management, low debt levels, conservative budgeting practices, AAA credit rating, and fully funded pension system helped achieve our distinction as a leader in fiscal strength,” said BFM Commissioner Jim Terwilliger. “This document puts all these accomplishments and more in one convenient place.”
Unforeseen unclaimed property receipts were the biggest driver of excess revenues; the state received more than $47 million in unexpected unclaimed property receipts since the 2025 legislative session. Beginning in FY2026, such windfalls will be dedicated to a trust fund via SB 155, which Governor Rhoden signed into law.
South Dakota’s largest revenue source, the state sales tax, finished the year $3.7 million lower than recent estimates and 0.6% lower than collections from the previous year.
During the 2025 legislative session, Governor Rhoden and legislative leadership agreed to keep $106 million left unspent on the bottom line to help cover the costs of a future prison. Between the $63 million surplus and the $106 million left unspent by the Legislature, $169 million will flow to the state’s two primary reserve funds under state law.
The state’s reserve funds now total $492 million or 19.9% of the FY2026 budget.
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Courtesy of taxpayers in other states like Minnesota, California and others that help financially subsidize South Dakota’s annual budget.
I would guess the vast majority of this money is related to unclaimed property and has nothing to do with “revenue” or tax payer funds.
It would be interesting to see where it all originated from.
Don’t break your arm, you are going to need both of them in good working order when you return to Union Center following the convention next summer. For that matter, I would not brag about this figure as it comes at the cost of unfunded county mandates, cutting the safety networks for South Dakota children that need public health assistance; amongst others who suffer at back-to-back hypocritical gubernatorial administrations.
Seems like that would be a great jump-off point for property tax reduction? For school funding as a State, SD is second in the nation for federal funding behind MS, 16th in the nation for local effort funding (property tax) and 48th in the nation in State provided funding (sales tax, etc). It’s time for the legislature to stop blaming school spending (almost last in the nation for per pupil funding) and emergency services spending, who are almost 100 percent local funded. Give us some of our communities sales tax back for property tax relief.
the issue of federal funding seems a bit murky. Curious about how much money actually goes to the state government, AI can’t seem to provide a straight answer, says it’s almost $4 billion that goes to “state and local governments” so
some of that is county, municipal, and tribal. Some of this money goes to people who write grant proposals. I have actually met some of these people. One got a grant for kitchen renovations for tribal housing in Flandreau. Everybody was getting new kitchen cabinets. Did you know the federal government will pay for your home renovations?
Another got a grant to give pedicures in Sioux Falls.( A group of nurses were recruited as volunteers to help with all the pedicures and then she hosted a nice luncheon for all us volunteers.) Another nurse I knew was hired by the Flandreau tribe to do nothing at all but sit in an office and write grant proposals. It’s a big business.
It seems we get only 1% of federal aid to the states. If we had more people writing grant proposals, we could get more federal money. Of course this has nothing to do with state revenues or spending, but it gives people weird numbers to complain about, believing all that money is going to the state treasury.
At least half of the 492 million should be paid directly to the Lakota Nation because half of the
State lives on Stolen Indian land.
Read the 1868 Ft. Laramie Treaty.
The treaty is still an official United States treaty
that set aside lands in South Dakota, Wyoming and Nebraska to be unceded Indian land.
It established that the UNITED STATES GOVERNMENT would hold authority to punish white settlers who committed crimes against the
tribes.
In 1980 The United States Supreme Court ruled that tribal lands HAD BEEN TAKEN ILLEGALLY,
and the tribes were owed compensation to which they refused.
The fund as of 2018 is over a billion dollars.
I would propose a tax on every property that sits on the original treaty map as long as you choose to live there.
Compensation for stolen land.
Before you piss and moan in reply, just remember
this is YOUR government that made the deal.
So now, you can deal with the truth, because sometimes The Truth Hurts.
OK larry. You give up your land first.
Sounds good, which tribe? The Sioux slaughtered the Arikara and took land without treaty. I’d be in favor of finding the Arikara to have it. Truth does hurt if you don’t want the whole truth
How much of a “rainy day” fund do we need? Half a billion is a lot of money. Isn’t it time to start returning the money to those of us who paid it? As another commenter said, $63+ million is a good starting point. Bottom line, the state has been plowing money into this fund for years. It’s time to determine how much is enough and then send the rest back to taxpayers.
Rhoden is doing well!
What on earth does this have to do with Rodent?
Falling backwards into unclaimed money isn’t a blueprint for financial stability.
If it’s unclaimed money than the conservatives won’t want to spend it. They will quickley work to put it into a trust fund for unclaimed property.
This is funny. Running around doing nothing… he’s almost worse than Noooeeemmm. Maybe she better? Made decisions, big girl decisions.
If Brunner were Chief of Staff Rhoden would be a shoe in.