Proposed Budget - Fiscal Year 2027
South Dakota Governor Larry Rhoden released his fiscal 2027 budget proposal on December 2, 2025. The recommended budget calls for $7.44 billion in total spending, a 1.6 percent increase from fiscal 2026’s budgeted amount. General fund spending is recommended at $2.51 billion, a 2.1 percent increase from the budgeted amount for fiscal 2026. Total fiscal 2027 general fund increases are $50.7 million, with the largest increases going towards social services ($23.8 million), human services ($21.3 million), and corrections ($13.3 million). General fund ongoing receipts are estimated at $2.52 billion in fiscal 2027, a 2.4 percent increase from fiscal 2026’s revised level. The total estimated reserve balance is $315.2 million, or 12.5 percent of proposed fiscal 2027 appropriations.
Key Budget Highlights
The governor’s recommended budget is focused on keeping South Dakota safe, strong, and free through making targeted investments where needed, saving extra money for the future, and paving the way for property tax relief. The budget proposal is based on the core principles of keeping the perspective that it's the people’s money, not the state’s; balancing the budget every year; not spending one-time money on ongoing expenses; using one-time dollars to pay debt and invest for the long-term; conservatively projecting revenues and expenses; maintaining reserves of at least 10 percent for emergencies; fully funding the pension plan; and protecting the state’s AAA credit rating. Highlights of the budget include:
Keeping South Dakota Strong
- Funds the recommendations of the Governor’s Resilience and Infrastructure Task Force (GRIT) including hardening IT infrastructure, creating a backup to the State Radio system, and studying the feasibility of future nuclear energy.
- Invests one-time dollars in state-owned buildings for future generations.
- Provides ongoing funding to cover increased usage of Medicaid program, ensuring individuals who need support are able to access services.
- Includes funding to backfill the loss of federal funding for the administrative costs of the SNAP program as well as open government programming provided by South Dakota Public Broadcasting.
Keeping South Dakota Safe
- Fully funds the staffing needs of the new women’s correctional facility in Rapid City, ensures funding is available for new educational and mental health support, and provides one-time funding to purchase additional security equipment at existing correctional facilities.
- Invests in the South Dakota National Guard through expanding the Sturgis National Guard Readiness Center and construction of a new vehicle maintenance shop.
- Recommends one-time funds for the Highway Patrol to replace their existing airplane to better assist law enforcement in the state.
- Addresses the impacts of the opioid crisis by providing additional opportunities for local communities to access opioid settlement funds.
Keeping South Dakota Free
- Includes a transfer of funds to support the growth of the Sioux Falls and Rapid City Airports.
- Recommends additional support for technical colleges to increase opportunities for students including funding for a new Advanced Manufacturing Center at Southwest Technical College and funding for equipment at all four technical colleges.
- Supports rural communities by prioritizing Rural Health Transformation as well as continuing to improve high-speed connectivity for South Dakotans.