On January 14th, we will start the historic 100th Legislative Session in the great State of South Dakota. A few weeks ago, Governor Noem presented her Budget Address. The FY2026 recommended budget is $7,300,714,543. Ten years ago, the recommended budget was $4,319,861,165. One must wonder, how has the budget increased by three billion dollars? The recommended budget includes a reduction of $89,284,510 from last year. I have received several calls and emails to continue funding some of these programs, such as SD Public Broadcasting, the dual credit program, the Civil Air Patrol, and Veteran’s funding.
Sales tax revenue is running 2% lower than last year. Reduced spending can be a result of the high inflation we have experienced over the last few years. Although it has come down recently, time will tell where we stand over the next few years.
On a positive note, unclaimed property revenue is estimated at $228.67 million by the end of the fiscal year. Some of this money is eventually claimed, but this is much higher than the estimates, in part due to a new bank charter opening in South Dakota and turning over a large amount of unclaimed property.
The budget address revealed a 1.25% increase for the big three: schools, state employees, and healthcare providers. Although this may not be as much as we would like to see, on average this is keeping above inflation.
The Incarceration Construction Fund to build two new prisons, which has $612,535,092 allocated so far, will be a major topic of discussion, as an additional $212,464,908 in funding is needed to fully fund the $825,000,000 project. A 288-bed medium security female prison is under construction in Rapid City, at a cost of $87,145,020, which is $252,951 per bed. A 1,512bed maximum security male prison is being designed for construction in Lincoln County, at a cost of $487,480 per bed. Obviously, in a time of financial uncertainty, the Appropriations Committee will need to decide if building prisons will take priority over other needs, such as education, state employees and healthcare providers.
Being a county employee, I was assigned to the Local Government and Taxation Committees and have prepared the following five bills: SDCL 34-45-4 requires Municipalities and Counties to report 911 Fee information using the State Fiscal Year, which results in the municipality extracting information from two different fiscal years. This bill would change the reporting period to the calendar year.
SDCL 9-38-1 requires all private campgrounds in a 15mile radius from a municipal campground to approve of the construction or expansion of a municipal campground or tourist accommodation facility. This bill would lower the approval requirement to 75% of the private campgrounds.
Municipalities and Counties routinely see businesses pop up which are not a Permitted Use in that Zone. The applicant is then required to apply for a Conditional Use Permit or a Change in Zoning to a District that allows such business. This bill would require the applicant to provide verification the property is zoned properly prior to Department of Revenue issuing a Sales Tax License.
Counties are only authorized the powers the State grants them. Drainage applicants, normally a farmer/rancher, have a very tightwindowof opportunityin the spring and fall to complete drainage work. SDCL 46A-10A would be amended to provide administrative approval by the County Drainage Administrator if the applicant obtains waivers from abutting landowners, saving the applicant valuable time.
County Drainage Applications can be costly to the taxpayers with notifications, postage, advertising, and site inspection. Currently, SDCL 46A-10A-30 mandates the fee for a permit may not exceed one hundred dollars, which has not been updated to actual costs. This bill would amend the statute to remove the maximum fee, allowing a county to determine the fee as they do with other permits.
I am also working on legislation that involves Veteran’s benefits, Veteran’s Service Officer State reimbursement, and retirement eligibility.
I look forward to discussing issues of importance with the citizens of Jerauld, Sanborn, Miner and Davison Counties over the next several months. If you have any concerns, feel free to contact me at jeff. bathke@sdlegislature.gov.