South Dakota
New revenue forecasts don’t improve grim budget situation for South Dakota lawmakers • South Dakota Searchlight
South Dakota lawmakers already knew it was a tight budget year. They learned Wednesday it could be worse than they thought.
State government’s day-to-day operations are funded by “ongoing” revenue, such as sales taxes, while money from federal stimulus programs and other “one-time” sources are typically used for one-time needs such as construction projects.
Legislative Research Council Fiscal Chief Jeff Mehlhaff spoke to the Legislature’s main budget committee at the Capitol in Pierre and said ongoing revenues, including sales taxes, “will see negative growth” this year.
“The last time this occurred was fiscal year 2010, in the midst of the 2009 recession,” he said.
Lawmakers will adopt official 2026 revenue estimates Thursday, and those estimates will be used to help build the next annual budget. On Wednesday, Mehlhaff, who works for the Legislature, and State Economist Derek Johnson, who works for the governor, separately presented their revenue estimates to the budget committee.
Before the legislative session began last month, then-Gov. Kristi Noem’s budget proposal estimated $2.46 billion in ongoing revenue for the 2026 budget.
Her budget plan — inherited by new Gov. Larry Rhoden after Noem departed to become U.S. secretary of Homeland Security — includes numerous cuts to close a $51 million gap between ongoing revenue and ongoing expenses.
Noem budget includes cuts, but also new school choice program and more prison money
Johnson estimated Wednesday that 2026 revenues will be $17.6 million less than Noem’s budget proposal originally estimated.
Johnson also provided updated numbers for the current budget year. The bureau estimates this year’s ongoing revenue to be $2.38 billion – about $9 million less than lawmakers expected when they made this year’s budget last winter.
The picture presented by Mehlhaff was different. The Legislative Research Council’s earlier ongoing revenue estimate for the current budget year was $2.42 billion, and he said the new estimate is $2.39 billion, a nearly $30 million decline.
Mehlhaff’s estimate for the next budget year is $2.46 billion in ongoing revenue, putting the council’s estimate in line with Noem’s initial estimate.
Both state officials outlined economic conditions affecting the state’s revenue, including persistent inflation, lower farm income, and a slowdown of people filling jobs.
“Since about January 2024, we’ve been flat to negative on employees in South Dakota,” Mehlhaff said. “That, to me, is a bit concerning in terms of growing the economy.”
Noem estimated $1.45 billion in sales tax revenue for this year. The council’s revised estimate is $10 million less than that, while the bureau’s is about $14 million less.
Johnson said the outlook is negative.
“The consensus seems to be that interest rates are going to be higher for longer,” Johnson said. “That suppresses economic activity.”
One factor in the budgetary difficulties is the Legislature’s own doing. During the 2023 legislative session, lawmakers reduced the state sales tax rate from 4.5% to 4.2% until 2027, costing an estimated $100 million annually in lost revenue.
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South Dakota
Nature: Prairie chickens in South Dakota
South Dakota
Democrats fail to field candidates for a majority of South Dakota legislative seats
(SOUTH DAKOTA SEARCHLIGHT) – Democrats are running for 46 of South Dakota’s 105 legislative seats — leaving 56% of seats without a Democratic candidate.
That doesn’t bode well for the party ahead of November, said Michael Card, professor emeritus of political science at the University of South Dakota.
“It doesn’t put them in a position to actually put forward their ideological policy preferences and have much of a success at getting those enacted,” Card said.
In the state Senate alone, Democrats have failed to field a candidate for 22 seats, which is nearly two-thirds of the chamber. In the House, Democrats have failed to field a candidate for 38 seats, which is 54% of the chamber.
There is only one Democratic legislative primary in the state: a state Senate race in District 26, which includes the Rosebud Reservation.
There are no statewide Democratic primaries, after announced candidates for governor and U.S. House dropped out or failed to gather enough petition signatures to make the ballot, leaving one Democrat in each of those races.
Statewide candidates will have less name recognition than Republican candidates ahead of the general election, since they didn’t have primaries, Card said. In the Legislature, Card said Democrats “are guaranteeing they won’t get a majority.”
In contrast, Republicans have primary races for governor, U.S. House and U.S. Senate. Five legislative districts do not have Republican primaries, but do have Republican candidates. There is a Republican candidate running for every legislative seat, except for one House seat in District 27, which includes the Pine Ridge Reservation.
Card said there are several factors leading to poor candidate turnout among Democrats, including a self-fulfilling cycle of failure.
“A lack of winning makes fewer people willing to take a chance on running for office,” Card said. “Why run if I think I’m going to lose?”
Democrats haven’t held a statewide office since 2015, and they haven’t held a majority of either legislative chamber since 1994.
Joe Zweifel, deputy executive director of the South Dakota Democratic Party, said the organization worked “really, really hard” to convince Democrats to run for office.
“But you can’t force people to run for office,” said Zweifel, of Sioux Falls, who’s running for a legislative seat himself in District 12.
He’s heard the open seats called a “failure.” But he disagrees, choosing to focus on the Democrats who did step forward.
“We’re running quality, good candidates in those races,” Zweifel said.
The South Dakota Democratic Party hopes to build on legislative successes, such as a new law from Rep. Kadyn Wittman, D-Sioux Falls, that commits state funding to cover the family portion of reduced-price school meals.
“That specifically is a return on investment for our donors, and it shows that Democrats are doing good things for the people of South Dakota,” Zweifel said.
Wittman’s success helped inspire Democratic District 13 House of Representatives candidate Ali Rae Horsted, of Sioux Falls, to take a second run at the Legislature. Horsted ran unsuccessfully for the Senate against Sen. Sue Peterson in 2024, garnering 42% of the vote.
Horsted plans to build on that success and the name recognition she already has in the district. She hopes she’ll have “better odds” in this election, since there are two House seats for every district.
Horsted said it would better serve South Dakota if the state had a more balanced Legislature. While the latest Legislature was 92% Republican, 52% of voters in South Dakota are Republican. South Dakota has the lowest percentage of Democrats, 7.6%, in the Legislature nationwide.
“I think it’s important that people have options on the ballot,” Horsted said, “and people are able to vote for candidates that represent their values and their vision for the future of South Dakota.”
Makenzie Huber is a lifelong South Dakotan who regularly reports on the intersection of politics and policy with health, education, social services and Indigenous affairs. Her work with South Dakota Searchlight earned her the title of South Dakota’s Outstanding Young Journalist in 2024, and she was a 2024 finalist for the national Livingston Awards.
South Dakota Searchlight is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.
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South Dakota
From Big Ideas to Better Places: Building Livable Communities Across South Dakota
From East River to West River, South Dakota communities share a common goal: creating places where people of all ages can live, work and thrive. AARP’s Domains of Livability provide a framework to help communities do just that. Through the AARP Community Challenge grant program—designed to spark quick, impactful local projects—South Dakota communities are turning big ideas into visible, people-centered improvements.
Read the South Dakota Community Challenge Grant Report, which showcases grant-funded projects across the state designed to build more livable communities.
What Are AARP’s Domains of Livability?
AARP’s approach to livable communities is rooted in eight interconnected domains that together support quality of life at every age:
- Outdoor Spaces and Buildings – Safe, accessible parks, streets and public buildings
- Transportation – Affordable, accessible options for getting around
- Housing – A range of choices that support independence
- Social Participation – Opportunities to connect, learn and have fun
- Respect and Social Inclusion – Communities that value people of all backgrounds and ages
- Civic Participation and Employment – Meaningful ways to engage and contribute
- Communication and Information – Clear, accessible ways to stay informed
- Community Support and Health Services – Access to services that support well-being
These domains work best when addressed together—something South Dakota communities are embracing.
Turning Vision into Action with Community Challenge Grants
AARP Community Challenge grants fund short-term, “quick-action” projects that can ignite long-term change. Across South Dakota, these grants have helped communities pilot ideas, build momentum and demonstrate what’s possible when residents put people first.
Here’s how local projects are bringing the Domains of Livability to life:
- Outdoor Spaces and Buildings: Communities have used grants to enhance parks, create pop-up public spaces, add benches and shade and install wayfinding signs. These improvements invite people to linger, gather, and enjoy shared spaces—supporting both physical activity and social connection.
- Transportation: Small, thoughtful transportation projects can make a big difference. Community Challenge grants have supported safer crossings, improved walkability and bikeability around key destinations and the planning or installation of transit amenities like shelters and seating—especially important for older adults and people with mobility challenges.
- Housing and Community Support: Some projects focus on helping residents age in place by improving access to information about home modification resources or by testing neighborhood-level solutions that connect people to services. These efforts strengthen independence and peace of mind.
- Social Participation and Inclusion: Murals, community events and creative placemaking projects funded by AARP grants have sparked community pride and social connection. By involving residents in design and implementation, these projects foster respect, inclusion and a strong sense of belonging across generations.
- Communication, Civic Participation and Opportunity: From hosting community conversations to creating new tools for sharing local information, South Dakota communities are using grants to engage residents in shaping their future. These efforts elevate local voices and encourage ongoing civic participation.
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