South Dakota Lawmakers Get Updated Revenue Outlook as Budget Targets Due for Appropriations Committee

South Dakota legislators are reviewing updated revenue expectations for the next budget year as Gov. Larry Rhoden considers tweaks to his proposed budget after stronger-than-expected January numbers. Legislative Research Council Fiscal Chief Jeff Mehlhaff told lawmakers tax refunds could put hundreds of millions into residents’ pockets and add about $10.3 million to the state’s general fund.

By Riley Harrington February 11, 2026 1:23 pm

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MITCHELL, SD (Mitchell Now) — South Dakota lawmakers are getting an updated look at expected revenues for the coming budget year as the Legislature moves toward setting its spending targets.

Gov. Larry Rhoden has indicated he is considering adjustments to his proposed budget after a stronger-than-expected revenue month in January, as lawmakers continue budget talks in Pierre.

During a revenue outlook presentation, Legislative Research Council Deputy Director and Fiscal Chief Jeff Mehlhaff told legislators that the 2026 income tax filing season could mean larger refunds for many South Dakotans — an average increase of roughly $800 to $1,000 — translating to about $305 million in additional money in taxpayers’ pockets. Mehlhaff said that would also mean about $10.3 million more for the state’s general fund.

The Joint Appropriations Committee is expected to establish its revenue target by Feb. 12, which will guide final budget decisions for the next fiscal year.

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