SIOUX FALLS, S.D. (KELO) — With South Dakota closing its 2025 budget with a surplus of $63 million, South Dakotans are sharing their conflicting feelings regarding the surplus.
Gov. Larry Rhoden made the announcement on Monday. It comes as state government started the new fiscal year on July 1. The money will be added to the $322,757,524 that state government previously had in its two reserve accounts.
In a press release from Governor, Larry Rhoden, he praised the state saying despite a tighter budget, they ended the fiscal year in strong shape.
“What other state has the lowest unemployment rate in America, the 2nd best overall tax system, the 2nd least regulations, no income tax, a AAA credit rating, a fully-funded pension, and 136 consecutive years of balanced budgets? Very few states can boast even one such accolade – and no other state can boast all of them together.”
Democratic Rep. Kayden Wittman was critical of the surplus, saying in an interview with KELOLAND News that budgets reflect priorities, and the state should ask itself if that money could have been better spent.
“I think that we were very fiscally responsible with our taxpayer dollars this legislative session, but I think that when we see surpluses like this, it’s a wasted opportunity for other unmet needs that are occurring in our state that we could be addressing.”
Rhoden also responded to criticism of the reserve funds saying he wont apologize for making fiscally conservative decisions.
“Since we announced our year end surplus, South Dakota has been criticized by some who say that we should have spent more money on this handout or that pet project. But I’m glad we didn’t,” Rhoden said.
He explained the surplus was driven in part by state agencies spending $22 million less than what they were budgeted, saying “That’s just good, commonsense decision making from the leaders of our agencies. They didn’t spend more than what they were allocated, and they looked for opportunities to save.”
Wittman responded to that statement, saying if feeding hungry children is a pet project, then our state’s priorities are upside down.
“I hope he wasn’t referring to proposals like mine to expand free school lunch access, especially when the cost was just $616,000 annually and the support was broad. The Governor’s office was the only opposition,” Wittman said. “Feeding kids isn’t a handout. It’s one of the most fiscally conservative, strategic investments we can make.”
Wittman brought forth House Bill 1089, during the 2025 legislative session which would have established parameters for the reimbursement of school districts that provide free or reduced-price meals to students and ultimately failed in House Appropriations.
Rhoden said that South Dakota is a leader in disciplined financial management and we shouldn’t start doing business like other states.
“We came into this last legislative session knowing that we had a bit of a budget pinch. Then-Governor Noem recommended $80 million in cuts, and I stood by those. The legislature passed $70 million of those cuts but added none of their own. We did have to cut to get to where we’re at today. That’s how South Dakota families balance their budgets, and that’s how our leaders do business in Pierre.”
Wittman said a surplus isn’t a bad thing, but some of the sacrifices in the name of fiscal responsibility are questionable, saying there were quite a few opportunities for the state to have used those dollars in a wise and more responsible way.
“Some of the other things that we saw sacrificed in the name of fiscal responsibility this year during the legislative session were increasing dual credit costs for college students, we cut funding for infant and maternal mortality, we reduced funds for the state library, we cut services for Medicaid expansion, we did not reimburse our mental health providers enough for them to sustain services,” Wittman said.
Wittman said as a state they can can both help the community and ensure fiscal responsibility as well as helping the most vulnerable citizens.
“Fiscal strength is not about hoarding, and it’s not about continuing to build up our rainy day fund, we already have it a significant rainy day fund,” Wittman said. “It’s about helping our community and helping our constituents, and right now I just, I see us failing to help the most vulnerable among us.
Wittman said she is hoping to work with the governor and hopes that they will be able to find a way to work together moving forward.
“I have reached out to the governor’s office and I’ve requested a meeting with him, and I would love to have a serious conversation with him about what it would look like, to continue to champion this effort, and if there is any opportunity for us to work together during the next legislative session,” Wittman said.
