Noem says budget surplus will be used for prison construction

(The Center Square) - South Dakota Gov. Kristi Noem said Monday she plans to us an $80.7 million budget surplus to offset prison construction costs.

The $80 million surplus includes $24.3 million, which was above the forecast for fiscal year 2024 and $56.4 million saved by reductions in state government spending, according to Noem.

“South Dakota makes common sense decisions based on small government, low taxes, and spending within our means. We don’t just talk about fiscal responsibility – we follow through!” Noem said in a statement. “We will continue to budget responsibly for the people, and we will avoid unnecessary debt by using this surplus for prison construction costs."

The surplus was transferred to the state's budget reserves, which now has $322.8 million or 13.3% of the fiscal year 2025 general fund budget," according to Noem.

Noem proposed a $132.4 million one-time allocation in December for a new men's prison in Sioux Falls. The prison would replace the state penitentiary built before South Dakota became a state.

The building is no longer suitable, the Department of Corrections said in a budget document.

"The prison houses almost 275 more high/medium custody offenders than is recommended by the American Correctional Association for a prison that size," the document said . "The facility does not meet modern correctional standards and is not laid out in a way that is conducive for efficient staff supervision. Millions of dollars are spent annually to maintain and repair this facility, and it cannot be updated in a cost-efficient manner to serve the state’s current needs."

A disturbance at the penitentiary in March led to charges against 11 inmates, according to Attorney General Marty Jackley's office . The inmates pleaded not guilty and are scheduled for trial next month.

A women's prison under construction had a shortfall of $4 million, the governor said in December . Federal funds were recommended for water, $4 million from the land design funding and $21 million in one-time funding to keep the state from going into debt.