FEDERAL CHALLENGES TO FOOD ASSISTANCE WILL COST SOUTH DAKOTA $5 MILLION ANNUALLY
PIERRE, S.D. (Makenzie Huber / South Dakota Searchlight) – Federal changes to a food assistance program will cost South Dakota $5 million starting next fiscal year, according to the state Bureau of Finance and Management.
The situation “could be much worse,” said state Department of Social Services Secretary Matt Althoff, given that the estimate is significantly lower than costs anticipated in other states.
President Donald Trump signed the policy changes for the Supplemental Nutrition Assistance Program into law on the Fourth of July as part of broader legislation known as the One Big Beautiful Bill Act. The SNAP provisions include expanded work requirements and requiring some states to match a percentage of benefits. Previously, the federal government covered 100% of the benefit cost.
South Dakota’s $5 million price tag comes from a shift in some of the program’s administrative burden from the federal level to the state, according to state officials.
Budget impacts in other states include an estimated $133 million in Connecticut and $240 million in Maryland. Those states will be required to match federal SNAP benefits at 15%, while South Dakota won’t have any match to pay. That’s because the new law allows states to avoid a match if their SNAP error rate is below 6%.
South Dakota has the lowest error rate in the nation at 3.28%. SNAP payment error rates measure how accurately a state determines eligibility and benefit amounts for recipients.
Althoff credited the low error rate to his staff’s “due diligence” and focus on accuracy. South Dakotans currently receiving SNAP benefits should not see a change in the level of benefits they’re receiving due to an increase in the state’s administrative burden, he said.
The $5 million cost will impact other parts of the department’s budget or the broader state budget, he added.
“We’re not squirreling away that money right now, so there’s going to be a reduction in services or something else if that’s to be achieved,” Althoff said. He did not suggest potential cuts.
In May — the most recent month of available data — 37,712 South Dakota households received SNAP benefits, costing the federal government $14.9 million. Of the 75,282 people receiving benefits, 45% were children.
Stacey Andernacht, vice president of public relations for Feeding South Dakota, is grateful for Althoff’s assurances about the minimal impact to beneficiaries. But she worries that people affected by expanded work requirements for SNAP won’t be able to obtain the food they need.
Nonpartisan policy institute Center for American Progress estimated in June that 14,000 South Dakotans would be at risk of losing some or all SNAP benefits due to expanded work requirements.
Work requirement exemptions were removed for homeless people and veterans, able-bodied people from 55 to 64 years old, people caring for a dependent child older than 13, and people 24 or younger who aged out of foster care at 18. Exemptions were added for tribal members covered by the Indian Health Service. The law did not set a deadline for when the new work requirements will be implemented.
Andernacht said she expects the largest impact to be among older adults and adults with teenage children. They may seek help from nonprofits like Feeding South Dakota and other food banks to meet their needs, she said.
According to the state Department of Social Services, there were 1,714 able-bodied SNAP recipients between the ages of 55 and 64 as of July 1.
Andernacht recommended families continue to use SNAP benefits as normal until federal guidance is released. She said adults who fall within the expanded work requirement categories should be proactive in seeking work.
Feeding South Dakota reported a $2.5 million budget shortfall in May due to a loss of federal support alongside a 12% increase in demand for mobile food distribution across the state, Andernacht added.
“We’ll put roughly the same amount of pounds into the state as last year, but we’re serving more people every month,” Andernacht said. “The only way to serve more is to stretch. You either serve more people less food or you serve fewer people and the same amount of food.”
FISCAL RESPONSIBILITY OR NEGLECT OF STATE PRIORITIES? SURPLUS SPARKS DEBATE ABOUT BUDGET CUTS
PIERRE, S.D. (Makenzie Huber / South Dakota Searchlight) – Now that South Dakota has finished its fiscal year with a $63 million surplus, some Democrats and people affected by budget cuts are criticizing the state’s Republican administration and legislative majority for slashing spending too aggressively.
Falling sales tax revenues and rising Medicaid obligations drove lawmakers to enact targeted spending reductions in the fiscal year 2026 budget they adopted during the legislative session that ended in March. Among the notable cuts were those affecting Temporary Assistance for Needy Families, the State Library, tobacco-use prevention efforts, and subsidies for high school students taking dual credit college courses.
Last week, Gov. Larry Rhoden reported that the state ended the 2025 fiscal year with a $63 million surplus. About a third of the surplus came from state departments spending less than their budgets allowed. About two-thirds came from higher-than-expected unclaimed property revenue.
Unclaimed property consists of an array of abandoned or forgotten private assets, including money from bank accounts, PayPal accounts, stocks, life insurance payouts, uncashed checks, unused refunds, and the contents of safe deposit boxes. Holders of the money or items, such as banks, try to find the owners. The property reverts to the state after three years.
Rhoden told South Dakota Searchlight he didn’t regret any cuts, since they were made to ongoing programs and most of the surplus came from unclaimed property, which is an unpredictable revenue source.
In his weekly column, he added he’s glad the state didn’t spend more money on “this handout or that pet project.”
“For those who wish that we would’ve spent more, I won’t apologize for making fiscally conservative decisions as your governor,” Rhoden wrote. “South Dakota is a leader in disciplined financial management.”
This is the 14th consecutive year South Dakota has reported a year-end surplus. It was achieved this year despite a $3.7 million decline in sales tax revenue.
Surplus shows a ‘neglect’ of state needs, former state contract worker says
What the governor calls “disciplined financial management,” Carter Linke calls “neglect and cruelty.”
Linke’s contract position with the state Department of Health through Black Hills Special Services Cooperative was cut in May. He served as a tobacco prevention coordinator, researching emerging tobacco products and providing tobacco education to school districts and communities. The Legislature and Rhoden approved a $3 million annual cut to the program.
South Dakota still needs the work he was doing, Linke said.
“This notion that South Dakota is being fiscally responsible doesn’t really address the full picture and neglects the purpose of what these programs were and why they’re essential,” he said.
Linke now plans to pursue a master’s degree out-of-state this fall.
Partisan split on unpent funds
House Majority Leader Scott Odenbach, R-Spearfish, said the Legislature worked to “tighten up” budgets for state departments to avoid reverted funds like the $22 million reported for the 2025 fiscal year.
“Just like everything else, it’s a matter of being smart, defining priorities well and only budgeting for what you really need,” Odenbach said.
Democratic Sioux Falls Rep. Erik Muckey said reverted funds aren’t always a sign of overbudgeting and can also result from state departments failing to carry out their missions. He sits on the legislative budgeting committee.
Muckey pointed to recently approved cuts to Temporary Assistance for Needy Families benefits and a Department of Social Services fund transfer regarding what he said the department described as “under utilized” mental health funding. Officials in the department said the unused funds were connected to a workforce shortage, according to Muckey, but he said it was a sign the state does not reimburse providers enough to sustain a mental health workforce.
“You can understand my ire for that when we have money and aren’t using it properly,” Muckey said.
Rhoden said the reversions are a sign of “commonsense decision making” to find opportunities to save money.
“If every state and Washington, D.C., did business that way, our country would be a lot better off,” he said in his weekly column.
Extra money goes to budget reserves
The $63 million surplus will flow into the state’s reserve funds. So will $106 million set aside during the legislative session to potentially help fund the construction of a new men’s prison. Legislators plan to meet Sept. 23 for a special session to consider a prison proposal.
Rep. Kadyn Wittman, D-Sioux Falls, criticized the surplus and unspent funds. She said the Governor’s Office opposed her most recent push to provide free lunch for public school children, which would have cost $616,000 annually.
“The budget really reflects our values, and this year we chose as a Legislature to bank millions of dollars instead of investing in critical areas,” Wittman told South Dakota Searchlight.
She’d like more flexibility with unspent funds to meet needs and bridge funding gaps after the legislative session ends, rather than “banking it.”
Reserve funds are “hard to get at,” Muckey said, because lawmakers need a two-thirds majority to pull money from the funds. Muckey said that law shouldn’t change. That’s why it’s important, he said, to fully address the state’s needs upfront rather than having leftover money “go to the bottom line and watch things starve.”
The state’s reserve funds, now at $492 million, account for 19.9% of the fiscal year 2026 budget. Muckey would like to reduce that to 15%.
South Dakota can be fiscally responsible and take care of people because “those things are not mutually exclusive,” he said. Lawmakers often refer to reserves as “rainy day” funds, and Muckey said program cuts that hurt people are the kinds of “rainy days” the state should use excess reserve funds to avoid.
“When we are experiencing ‘thunderstorms’ in our state, why are we not using our rainy day fund to help people?” Muckey said. “We’re just hoarding cash.”
Rhoden said in the surplus announcement that the $106 million left unspent in the 2026 budget is intended to “help cover the costs of a future prison.” But Odenbach said the money could be used for other priorities.
“We need to decide where to put it,” Odenbach said, “whether that’s put toward a prison or property tax relief.”
SD budget reserves spending
In the last decade, the South Dakota Legislature pulled funding from the state’s budget reserves for various needs and projects, according to the state Bureau of Finance and Management.
Fiscal year 2024: Transferred $93.6 million to the incarceration construction fund.
Fiscal year 2023: Transferred $183.7 million to the incarceration construction fund.
Fiscal year 2020: Transferred $14.9 million to the general fund to keep budget reserves at 10%.
Fiscal year 2019: Transferred $6.6 million to the general fund to keep budget reserves at 10%.
Fiscal year 2018: Used $5.9 million to help pay for the state’s increased share of K-12 education due to a new funding formula.
Fiscal year 2016: Used $27.4 million to pay South Dakota Board of Regents and technical college debt and freeze tuition for students.
$50 MILLION PAID BACK IN UNCLAIMED PROPERTY IN FISCAL YEAR 2025
SIOUX FALLS, S.D. (Dakota News Now) – At Wednesday’s interim appropriations meeting, state appropriators heard that the state paid out $50 million in unclaimed property during the 2025 fiscal year.
Unclaimed property includes any abandoned or forgotten private assets from either bank accounts, PayPal accounts, stocks, uncashed checks, and even unused refunds.
After three years, the property is controlled by the state.
Right now, due to the fact that unclaimed property received has accumulated a lot faster than it’s been claimed and paid out, the state has collected billions of dollars of it.
But South Dakotans can reclaim this property at any time, and people are doing so at an increasing rate. In FY2013, just over $3 million was paid back as opposed to $50 million in fiscal year 2025.
Therefore, the state is approaching the subject very cautiously, aiming to avoid a situation where claims on property exponentially increase, although unlikely.
With the passage of Senate Bill 155 this year, the state will increasingly limit how much unclaimed property it will include in its budget.
“So, this is a big shift in the way unclaimed property is handled. It’s a very good thing as far as we’re concerned at the treasurer’s office for how we handle unclaimed property on a day-to-day basis and annually. It will help offset the perpetual liability that’s been created over the last ten years,” Jason Williams, the Deputy Treasurer for the state of South Dakota, said.
For the next fiscal year, the state will give $61 million to the budget. By FY2035, that will be reduced to a cap of $25 million moving forward. All money not budgeted for will be placed into a trust fund for future claims.
But the state is continually receiving unclaimed property at a much faster rate. In fiscal year 2024, the state received $174 million, and then in 2025, over $300 million in addition to that.
Former Chair of the Senate Appropriations Committee Jean Hunhoff said placing a cap in general is a good idea, but could force the state to miss out on some one-time projects.
“The downside is you’re losing dollars you can use for one time projects and sometimes that was very important, especially when we were struggling and I think they’re going to see down the road if there is this continual decline in federal support, and the state has to take more on, where are those dollars going to come from?” Hunhoff said.
You can see if you have unclaimed property on the state treasurer’s website.
TRAIL KING INDUSTRIES LATEST TARGET IN ICE CRACKDOWN IN SOUTH DAKOTA
MITCHELL, S.D. – A well-known agriculture equipment manufacturer in South Dakota is under active investigation by U.S. Immigration and Customs Enforcement (ICE).
The federal agency has confirmed that an active investigation is underway at Trail King Industries facility in Mitchell.
Trail King had its start in 1974, operating out of a garage. Now, the headquarters employ around 500 people and builds everything from small utility trailers to million-pound transportation systems. It is the only full-line manufacturer of trailers in the country.
In addition to the Mitchell location, Trail King has manufacturing plants in Yankton and West Fargo, N.D. The company employs roughly 770 workers at all the plants combined.
While ICE has acknowledged the investigation, officials have declined to share further details due to its ongoing nature. Trail King’s leadership has also opted not to comment on the matter.
No information has been made public about the investigation’s focus or whether any enforcement actions have been taken.
ICE has been critical of companies for allegedly employing undocumented workers, emphasizing that immigration enforcement isn’t limited to big cities but extends to small towns across rural America.
In a South Dakota News Watch interview, Jamie Holt, St. Paul Special Agent in Charge, said, “Employers who knowingly hire individuals without legal work authorization not only undermine our nation’s immigration laws but also exploit vulnerable populations.
“These enforcement actions make it clear: illegal hiring practices aren’t limited to major metropolitan areas — they are happening in small towns across rural America, and we will continue to hold violators accountable, wherever they operate.”
ICE has maintained a visible presence in the state this year, including a May raid in Madison, S.D., that led to eight arrests at two businesses accused of employing undocumented workers at Manitou Equipment and Global Polymer Industries. Manitou had previously received nearly $1 million in taxpayer funded programs under former South Dakota Governor Kristi Noem who now heads ICE and the Department of Homeland Security.
This development comes amid a broader push for immigration enforcement in South Dakota. Attorney General Marty Jackley recently announced a new partnership between ICE and the state’s Division of Criminal Investigation under the 287(g) program, which allows state agents to assist in federal immigration efforts targeting violent crime and drug trafficking.
DCI plans to establish a task force headquartered in Pierre, with agents from across the state receiving federal training to serve as Task Force officers
