South Dakota
Hot topics aplenty on South Dakota’s 2026 legislative session agenda
With a slate of hot-button policy issues on the table and limited funding to work with, state Sen. Jim Mehlhaff of Pierre said it is difficult to predict how the 2026 legislative session will play out in the Capitol this year.
“A legislative session is just like the rest of my life — it usually goes just the way I didn’t plan,” the Republican Senate majority leader said of the roughly two-month session that convenes Tuesday, Jan. 13. “Maybe we can have respectful discussions and find good compromises, but it could also become a rodeo-and-a-half, too.”
All joking aside, South Dakota lawmakers are expected to tackle a roster of topics that could have long-lasting impact on the state and its roughly 925,000 residents.
Mehlhaff said that in addition to the annual battle over how to spend state money, legislators are also sure to dive headlong this session into property tax reform and legislation regarding data centers.
Rep. Mike Derby, a Republican from Rapid City, said other major policy issues on the 2026 agenda include efforts to change the state’s electoral process, possible regulation of tax increment financing districts and refining how economic development tools are used in the state.
Hovering over any policy debates, however, will be the difficult task of developing and passing an annual state spending plan following a year when overall tax revenues fell by 1.4%. In response, Republican Gov. Larry Rhoden has proposed no funding increases for schools, state employees and government-funded health programs.
“That’s what we’re going to spend all session talking about,” said Derby, who will lead budget discussions as chairman of the Joint Appropriations Committee. “We have a long list of ideas people want to discuss.”
Passing a spending plan for the upcoming fiscal year is the Legislature’s only required action each year. After several years of receiving a total of roughly $1.3 billion in federal funds related to the COVID-19 pandemic, lawmakers are back into what Derby describes as budget “normalization” mode.
In his budget address in December, Rhoden proposed a lean budget but did include $14 million in discretionary funds lawmakers could possibly use to advance one-time local, regional or statewide projects.
Patrick Lalley / Sioux Falls Live
Derby noted that the governor’s budget recommendation is subject to review and alteration. For instance, some lawmakers might try to use the discretionary money to give one-time bumps to state employees, schools and Medicaid providers, he said.
Other ideas that could rise up during budget negotiations include funding of airport expansions, finding ways to tap into funds from unclaimed property and using money Rhoden targeted toward boosting state reserves to fund new or ongoing projects instead.
Lawmakers tried and failed in 2025 to reform the property tax system, which largely funds local schools and county governments.
The push to reform the property tax system comes as many South Dakota homeowners have seen sharp increases in property valuations that have correspondingly caused their tax bills to jump. Most state government operations are funded through the state sales and use taxes.
A summer task force made 19 recommendations on how to reduce the burden on homeowners, and those ideas are still on the table.
Rhoden has offered a plan to allow counties to vote in a local sales tax to offset a reduction in property taxes, and gubernatorial candidate U.S. Rep. Dusty Johnson has floated a plan to give homeowners a $400 annual property tax credit.
Mitchell Republic file photo
Mehlhaff told News Watch he will offer a plan this session to increase the statewide sales tax by 2% and use that money to remove the burden of funding schools from local taxpayers.
Pros and cons of data centers
The decision on whether to allow construction of data centers that use extensive electricity and water to store huge amounts of computer data is perhaps the hottest topic in South Dakota right now.
The issue
drew a large crowd and high emotions
at Tuesday’s Sioux Falls City Council meeting.
“There’s going to be a robust debate about whether we should incentive data centers to come to South Dakota or put up barriers to them,” Mehlhaff said.
A bill
has already been filed to provide tax exemptions for data centers in an attempt to encourage their development in the state.
Mehlhaff, who is a co-sponsor of that bill, said he would rather see data centers built in the United States, including South Dakota, instead of in foreign countries such as China.
Democrats to push prison reform
The recent large expenditures related to building new prisons for men and women in South Dakota will translate into efforts in the upcoming session to reform elements of the state judicial system and current criminal sentencing laws, said Rep. Erin Healy, a Sioux Falls Democrat who is the House minority leader.
In the past two years, lawmakers have approved construction of a $650 million men’s prison for a site in eastern Sioux Falls and an $87 million women’s prison now being built in Rapid City.
Healy said she expects to see legislation filed to keep low-level offenders out of prison and to provide better prison programs to reduce recidivism.
“I think people are realizing that incarcerating people is a very expensive endeavor and that if we take care of people after arrest or before re-entry (into society) that we can avoid some of those costs,” Healy said. “We can help people before they enter the system because it costs us less money but also because it’s the right thing to do.”
Healy expects to file a bill to provide some criminal immunity from drug charges to anyone who witnesses someone else suffering an overdose.
Amid a tight budget year, Democrats will be looking for new revenue streams in 2026 to counter the funding freezes Gov. Rhoden has proposed for schools, state employees and Medicaid-funded health programs, Healy said.
She also said the rhetoric in the Capitol might be heightened due to the upcoming 2026 gubernatorial election as candidates and their supporters seek to drive home messaging they believe will resonate with voters.
Rhoden, one of those candidates, faces primary challengers from within and outside of the state Legislature.
“There are going to be some interesting developments and potentially we’re going to see some new priorities coming out from different camps aligned with gubernatorial candidates,” Healy said.
— This story originally published on southdakotanewswatch.org.
(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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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.
Vermillion is a college town built around a historic Main Street with an urban feel. With the University of South Dakota just about a mile away, the stretch stands apart for its youthful energy and academic culture. Best explored on foot, Main Street pairs 19th-century brick storefronts with stops like Café Brulé and the nostalgic Coyote Twin Theater. Murals and sculptures add pops of color to the town center, including works from Mural on the Wall and the Mirrored Medicine Wheel. Below are some of the downtown’s best highlights.
Walkable, Accessible, And Student-Friendly
Since most of downtown Vermillion is centered on Main Street, the district is compact and pleasant to stroll. Better yet, walking here from the University of South Dakota only takes about 20 minutes, making it accessible for students without cars. In recent years, the Vermillion Downtown Streetscape project has also enhanced pedestrian accessibility and safety. By implementing ramps, wider sidewalks, and well-placed crosswalks, navigating downtown Vermillion is easier and safer than ever.
Parking In Downtown Vermillion
Alongside its pedestrian-friendly improvements, the Vermillion Downtown Streetscape project made sure to maintain ample parking. Main Street and the first blocks along its north and south side streets offer plenty of free parking for locals and visitors alike. Removing the hassle of parking meters, you can explore downtown Vermillion without stressful time constraints.
Charming Architecture
With many buildings built between 1880 and 1942, history cements downtown Vermillion. Main Street stands out for its historic facades, where brick storefronts tell a story. After a fire destroyed much of the street in the late 19th century, a town ordinance banned wood-frame buildings from the district, explaining the streetscape we see today.
Some main street structures predate the infamous fire, like the present-day Dakota Brick House restaurant. Other brick landmarks were rebuilt in accordance with the ordinance, like the Classical Revival-style Clay County Courthouse, constructed between 1912 and 1913. Coupled with old-fashioned lampposts and weave-patterned pavement inspired by Main Street’s brick buildings, downtown Vermillion is a living time capsule.
Cool Cafes And Shops
Like all the best college towns, Vermillion is fueled by caffeine, a cafe-culture haven. Main Street W houses cozy places like Café Brulé, which specializes in “comfort food, decadent desserts, and espresso coffee drinks with classic hospitality.” A few doors down, The Bean Community Coffeehouse is a favored spot for students, serving everything from sweet cream cold brews to Italian cream sodas.
If you grab a to-go order, shopping is a great follow-up. The stores in downtown Vermillion reflect its diverse population, with something for every budget and vibe. Cash-strapped students and retro enthusiasts are drawn to spots like the Civic Council Thrift Store, but you can also find clothing boutiques like Blue Monarch. For your next read or a new board game, Outside of a Dog Books & Games is another cute and welcoming store to hunt for a souvenir.
Public Art
As you continue strolling downtown, Vermillion’s award-winning outdoor art is impossible to miss. Since 2017, the Vermillion Community Mural Project (now Mural On the Wall) has decked out downtown with colorful and meaningful installations. The massive artworks depict Indigenous themes, elements of local culture, and messages of inclusion, including the “It Gets Better: Vermillion Pride” installation outside Café Brulé.
Vermillion is also known for its SculptureWalk, installed by the Vermillion Cultural Association. Much like the downtown murals, these 6 sculptures breathe life into the district, depicting themes like resilience and family, along with Indigenous culture. The Mirrored Medicine Wheel is a striking example, situated at the corner of Main Street and Elm. Bear in mind, 2026 marks a rotation for the Sculpture Walk, meaning locals and visitors can expect to see a new set of sculptures sometime in the spring.
Dining, Entertainment, And Nightlife
In the evening, downtown Vermillion sees no signs of slowing down. Foodies flock to Cee Cee’s 605 Scratch Kitchen & Bar for happy hour cocktails and made-from-scratch dishes, while Native-owned Dez From The Rez serves cultural comfort foods with a modern twist. Afterward, Main Street’s Coyote Twin Theater is a great follow-up for new film releases and freshly popped popcorn.
Once night falls, Vermillion’s bar scene keeps downtown alive. On Main Street, Carey’s Bar has served locals and students since 1954. Nearby, the Main Street Pub is favored for its classic bar bites, while XIX (19) Brewing Company specializes in good beer, good company, and themed trivia nights.
Explore Towns Near Vermillion
There are countless cool towns to explore near Vermillion if you want to keep the good times rolling. 30 minutes southeast, North Sioux City offers an eclectic range of entertainment. During the day, visitors can enjoy NASCAR races at the Park Jefferson Speedway. Later, evening calls for gaming on “The Strip,” a two-block gambling district with spots like Beano & Sherry’s Casinos.
For outdoor fun, the town of Beresford is a gateway to Union Grove State Park. A 20-minute drive from Vermillion, Union Grove is home to serene tree-studded hillsides, making it a popular place to picnic, hike, or spend a night under the stars. Alternatively, 30 minutes west of Vermillion, Yankton is a blend of both towns. At Riverside Park, visitors can stroll, fish, and picnic along the Missouri River. Further inland, Broadway Ave is dotted with casinos like the South Point Gaming Lounge.
A Day In Downtown Vermillion
While it’s helpful to have an itinerary, exploring downtown Vermillion can be even better with a bit of curiosity and spontaneity. Tucked in between its top bars, murals, and cafes, you could find a hidden hangout locals love or a piece of public art not detailed online. That being said, Vermillion’s top-frequented restaurants and shops are popular for good reason, so don’t be afraid to follow the crowds. No matter where you start, go, and end, this South Dakota downtown is an absolute joy to walk through.
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