The State of South Dakota closed its 2025 budget year with an operating surplus of $63 million– $41 million in excess revenues and $22 million in spending that was below what had been budgeted.
South Dakota’s largest revenue source, the state sales tax, finished the year $3.7 million lower than recent estimates and 0.6% lower than collections from the previous year.
Governor Larry Rhoden says unforeseen unclaimed property receipts were the biggest driver of excess revenues. He says the state received more than $47 million in unexpected unclaimed property receipts since the 2025 legislative session. Beginning in FY2026, such dollars will be dedicated to a trust created by SB 155.
During the 2025 legislative session, Rhoden and legislative leadership agreed to keep $106 million left unspent to help cover the costs of a future men’s state prison. Between the $63 million surplus and the $106 million left unspent by the Legislature, $169 million will flow to the state’s two primary reserve funds, as required under state law.
The state’s reserve funds now total $492 million or 19.9% of the FY2026 budget.
The Bureau of Finance and Management published a document highlighting South Dakota’s accomplishments as one of the best financially managed states. You can see that information below or by clicking on this link “South Dakota: A Model of Fiscal Strength.”
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