South Dakota state government ended its 2026 fiscal year with a surplus of $69 million.
The surplus included $39 million in spending reversions– meaning state agencies spent less than they budgeted. The largest area of unspent funds came from the Department of Social Services, totaling $32 million.
The remaining $30 million surplus came in the form of revenue that came in above estimates. Sales tax revenue growth accounted for $17 million of the surplus. In FY2026, sales tax grew 6.6%, nearly two percent more than the historical average growth of 4.7%.
Per state law, the $69 million surplus was transferred to the state reserve funds, which now totals $325 million, or 12.7%, of the FY2027 budget and will be available for one-time investments in future budget years.
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