Gov. Larry Rhoden announced his plan to provide state funding toward the Rapid City and Sioux Falls airport expansions.
He plans to bring legislation in the upcoming legislative session to help the growing airports.
Gov. Rhoden said he wants to provide 0% interest loans of up to $15 million to each airport to support their existing airport expansion plans. Funds for the project would move from the state’s housing infrastructure fund into the state’s Revolving Economic Development and Initiative, or REDI, fund.
The state Legislature employed a similar funding method to the Douglas School district earlier this year.
Funds from the housing infrastructure fund date back to 2023, when then-Gov. Kristi Noem and then-Lt. Gov. Rhoden set aside $200 million to support career housing, $100 million in grants and the remainder in loans. About $65 million in loans remains in the fund.
Now, Gov. Larry Rhoden said it’s time to utilize what’s left.
“We’ve made tremendous progress in available career housing across South Dakota, and now is the time for these dollars to be used to solve other problems,” Rhoden said.
He called the 0% loans a win-win.
“And by providing a loan, this money will return to the fund for future economic development in South Dakota,” Rhoden said.
Approval must go through the state Legislature, who owns the power of the purse. Efforts during the 2025 Legislative session to help support airport expansions financially failed. Some against the bill said it only supported the two major cities, Rapid City and Sioux Falls.
State Democratic Rep. Erik Muckey represents District 15, which houses the Sioux Falls airport. He said this is about way more than his district.
“Though this is based in Sioux Falls and Rapid City, those two communities cover the overwhelming amount of air travel for every community in South Dakota," Muckey said. "So, when it comes to economic support, economic vitality and our ability to be connected to the world and have the world to connect with us. It’s going to be important for us to say, ‘We’ve been dealing with this project for years and at some point, in time having some form of solution that is creative enough to help get us to the finish line and sustain that programming and that project for years to come.”
Some legislators looking at property taxes have pinpointed the remaining money in the housing infrastructure fund for property tax relief as an option. The task force moved forward with 19 recommendations for relief, aiming to reduce.
Rhoden said that proposal has no merit because he believes one-time funds can’t support an on-going problem like property tax relief. He said he was aware of the task force's recommendation but called it "fairly ridiculous."
South Dakota Speaker of the House Jon Hansen was vice-chair of the Comprehensive Property Tax Task Force. In a statement to SDPB, he responded to Gov. Rhoden's words.
"Two days ago, I submitted a plan that the legislative Property Tax Taskforce adopted to give real property tax relief—it would return over a hundred million dollars in direct tax rebates to South Dakota homeowners," Hansen said. "Today the Governor called our plan to give tax money back to struggling taxpayers 'ridiculous.' Instead of helping families dealing with excessive property taxes, he wants to dump the money into airport expansion. Families are getting hammered by high property taxes, and they remain my top priority. They need relief now—no more delays, no more excuses, and definitely no more of these budget swaps to fund pet projects."
Gov. Rhoden said he "certainly hopes" he'll receive support from all of the Sioux Falls and Rapid City members of the Legislature. He said he also expects strong support from across the state.
However, the Governor's office said the legislation as it will be written requires a simple majority due to it being a fund transfer, not an appropriation which requires a 2/3 majority of both chambers of the Legislature. Rhoden said he'd be naive to assume the bill would pass with unanimous support, especially ahead of the 2026 election year.
"It's going to be an interesting session. You know, I was in the Senate when there were four people on the Senate floor that were running for governor," Rhoden said. "I think this year's going to be worse just given some of the stuff we've already seen coming out of certain candidates."
He added he's not fretting about it, saying he plans to focus on the idea that "good policy makes good politics."
Editor's Note: This story has been updated to include comments from state Speaker of the House Jon Hansen.
