The big Special Session on the new prison is coming up Tuesday. Governor Larry Rhoden is thus loading up lawmakers and the voters with numbers explaining what it will cost South Dakota to replace its aging penitentiary with a new lockup a couple miles down the river.
According to the Governor’s figures, we already have $505 million in the Incarceration Construction Fund. We’ve earned another $24M in interest on that money; Rhoden expects another $42M in interest to accrue. So for the low-low price of $79M plunked in from reserves, we can get to the $650M Rhoden says we need to build the new prison in Sioux Falls without any further appropriations.
Raiding the rainy-day fund would bring total reserves down 16%, leaving $413M for other urgent matters.
The amount Rhoden would like to pull from reserves to top off the prison construction fund is just about $16M more than the Fiscal Year 2025 $63M surplus South Dakota just dumped into the reserves.
The Governor’s Office notes that we’ve already lost $21 million on Kristi Noem’s failed plan to build a new prison in Lincoln County:
Lawmakers in February rejected Rhoden’s plea — which he inherited from his predecessor, Kristi Noem — for support of a 1,500-bed, $825 million prison on the controversial Lincoln County site. That land’s neighbors, who unsuccessfully sued the state over zoning on the property, helped sour the deal by persuading local lawmakers to oppose it.
…The state spent a total of $52.7 million on the Lincoln County endeavor, the plan says. According to the Rhoden administration, $31.9 million of those costs should not be considered lost, because they funded local water wastewater improvements, were spent on prison designs that are being repurposed, and were recovered in the swap of the Lincoln County land for the Sioux Falls land.
Of the total amount spent, $10 million was federal funding, given to Lennox to pay for the wastewater upgrades needed to service a prison. The Rhoden administration does not consider that wasted money, reasoning that the federal funding would’ve gone to a local infrastructure project one way or another.
The remaining $42.7 million came from state coffers. About $17.4 million of the design work paid for out of that pool of funds has since been folded into a layout for the prison on Benson Road in Sioux Falls [John Hult, “State Lost $21 Million on Failed Lincoln County Prison Site, Governor’s Office Says,” South Dakota Searchlight, 2025.09.18].
Factor in the $4.5M in land value the state says we get back by trading the Lincoln County site for the Benson Road site, and we’re out so far just $20.8 million in unrecoverable “soft costs”:
But remember: we haven’t lost $21 million; we’ve saving $154.2 million:
“We are in a great position! Thanks to current and former legislators who set aside funding for a new prison, we have the ability to pay for this project in cash,” said Governor Larry Rhoden. “This is a fiscally responsible plan, and as long as we don’t kick the can down the road, we will save a significant amount of taxpayer dollars.”
…The full plan is $175 million less than the previous design, resulting in a net savings of $154.2 million to the taxpayer.
…“Never before have we had the ability as a state to pay for such a large investment in public safety without saddling the taxpayers with debt,” said Commissioner Jim Terwilliger. “Replacing our 140-year-old penitentiary with a modern facility is the right investment at the right time for the people of South Dakota” [Office of the Governor, press release, 2025.09.18].
Legislators get to debate that fiscal spin and other key points of the new prison plan starting this coming Tuesday, September 23, at 9 a.m. Central Daylight Time.