Gov. Larry Rhoden announced South Dakota closed fiscal year 2026 with a $69 million budget surplus, driven by higher-than-expected revenues and lower agency spending.
The surplus included $30 million in revenue above projections and $39 million in spending reversions, meaning state agencies spent less than budgeted. Sales tax collections accounted for $17 million of the surplus, with sales tax revenue growing 6.6% over fiscal year 2025.
Rhoden credited the state’s strong economy and fiscally conservative budgeting practices for the positive results. Budget and Finance Commissioner Jim Terwilliger said South Dakota’s balanced-budget approach and financial discipline continue to support the state’s top credit ratings.
Under state law, the surplus was transferred to reserve funds, which now total $325 million, equal to 12.7% of the fiscal year 2027 budget, and will be available for future one-time investments.
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