South Dakota’s $69M Surplus Includes $32M From Social Services
South Dakota ended its 2026 fiscal year on June 30 with a $69 million budget surplus, growing the state’s reserve funds to $325 million. Governor Larry Rhoden’s office announced the figure Monday and called it evidence of “fiscal responsibility.”
The surplus came from two places. State agencies collected $30 million more than projected in revenue, with $17 million from higher-than-expected sales tax receipts. The remaining $39 million came from state agencies spending less than their approved budgets.
The biggest single source of unspent money was the Department of Social Services. The department reverted $32 million back to the state treasury from its $1.8 billion budget. That department administers Medicaid, the Supplemental Nutrition Assistance Program (SNAP), and Temporary Assistance for Needy Families (TANF).
$32 million reverted from South Dakota’s Department of Social Services, which oversees Medicaid, SNAP, and TANF, in fiscal year 2026.
Rhoden’s office said the surplus funds “will be available for one-time investments in future budget years.” Under state budget rules, those dollars cannot fund ongoing operations like Medicaid administration or daily program costs. They can fund things like construction.
Democratic Lawmaker Says Needs Were Left Unmet
Rep. Erik Muckey (D-Sioux Falls), a member of the Joint Appropriations Committee, said the surplus deserves a harder look. “The message isn’t about the surplus,” Muckey said. “The message is we’ve clearly had opportunities to make a difference, and did we leave money on the table to accomplish that?”
“Did we leave money on the table to accomplish that?”
Rep. Erik Muckey, D-Sioux Falls, member of the Joint Appropriations Committee, July 2026
Muckey pointed to the DSS reversion as a missed opportunity, specifically citing “significant needs” in addiction treatment and behavioral healthcare.
Jim Terwilliger, commissioner of the Bureau of Finance and Management, declined to explain what drove the DSS reversions on Monday. He said the details will be presented to the Joint Appropriations Committee next week.
That delay matters. Legislators cannot challenge or redirect spending decisions they cannot yet examine. Until the committee receives an accounting, the public has no way to know whether the $32 million went unspent because services were not needed or because they were never offered.
What You Can Do Now
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Contact the Joint Appropriations Committee directly and request a public accounting of the DSS reversions before next week’s hearing. The South Dakota Legislature’s contact directory is at sdlegislature.gov. Ask: “Why did the Department of Social Services revert $32 million? Were Medicaid, SNAP, or TANF services reduced or denied?”
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Call Governor Rhoden’s office at (605) 773-3212 and ask whether the administration plans to direct any surplus dollars toward addiction treatment or behavioral health services in the next budget cycle.
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Contact Rep. Erik Muckey’s office to express support for budget transparency. Muckey sits on the Joint Appropriations Committee and is already asking the right questions. Reach the South Dakota House at (605) 773-3851 and ask to leave a message.
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Submit public comment to the South Dakota Department of Social Services at dss.sd.gov if you or someone you know was denied or lost access to Medicaid, SNAP, or TANF services in fiscal year 2026. That documentation strengthens the case for oversight.
Sources
South Dakota Searchlight: Governor Celebrates Surplus as Democratic Lawmaker Says State Missed Opportunities South Dakota Bureau of Finance and Management: State Budget Documents and Revenue Reports South Dakota Department of Social Services: Program Overview for Medicaid, SNAP, and TANF South Dakota Legislature: Joint Appropriations Committee Membership and Schedule