The South Dakota Legislature’s Joint Committee on Appropriations adopted updated revenue forecasts Thursday (Feb. 12, 2026), boosting ongoing revenue estimates by about $30 million.
Afterwards, Governor Larry Rhoden revised his proposed Fiscal Year 2027 budget to include a 1 percent increase in state funding for public education, community support providers and state employees.
Rhoden said his original budget left no room for the so-called “big three” because nearly all ongoing dollars were spoken for by mandatory increases from the federal government.
“When I presented my budget, nearly all of the ongoing dollars were spoken for by mandatory increases from the federal government,” Rhoden told reporters. “So we didn’t have anything left for the big three, which are education, healthcare, and state employees. Well, we do now.”
The governor said the increase supports teachers and schools to give students the best opportunity for their future, keeps South Dakota healthcare strong, and supports state employees who help keep South Dakota strong, safe, and free.
“That’s my proposal,” Rhoden said. “And I hope the legislature goes along with that. They will obviously have a lot to say about that.”
The Joint Appropriations Committee on Thursday raised this fiscal year’s one-time estimates by about $17 million and raised ongoing estimates by about $30 million.
A 1 percent inflationary increase would cost about $24.8 million, leaving about $5 million in ongoing revenue, according to a reporter’s question at the press conference.
Rhoden said he has no preference for what the leftover money would go toward.
“When you get into those smaller numbers, I’ll leave that in the hands of the legislature,” Rhoden said.
Todd Epp with the South Dakota Broadcasters Association contributed to this story.
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