Gov. Kristi Noem proposes over $400M for upgrading state prison infrastructure

In her recently proposed budget, more than $400 million was set aside by Noem to upgrade aging prison infrastructure. Here's how it will — and won't — be spent.

The South Dakota State Penitentiary
The South Dakota State Penitentiary in Sioux Falls, which was built in 1881 and has long been outdated. Several legislators said that the large investment in prisons was a wise use of dollars, as it will lower the burden taken on by the state in a future bond raise.
Contributed / Department of Corrections

PIERRE, S.D. — The largest budget in South Dakota history contains more than $400 million in planned expenditures toward building new state prisons in Sioux Falls and Rapid City.

The multi-year investments proposed by Gov. Kristi Noem would be a significant step toward modernizing a long-neglected state corrections infrastructure. Several legislators told Forum News Service that they were glad to see part of the state’s growing revenues and reserves invested in the aging, overcrowded prisons.

“I'm happy with it,” Rep. Greg Jamison, who served on the task force on the Incarceration Construction Fund, said. “I think over the years it's always been a piecing-it-together approach, and now we're taking a strong approach to address the issue.”

Recognizing the need to upgrade this infrastructure, the legislature in 2021 made the first deposit in the new Incarceration Construction Fund, which at the moment holds $86 million set aside for these sorts of upgrades.

Noem’s proposed budget appropriates $60 million from the Incarceration Construction Fund to build a 300-bed, minimum-security women’s prison in Rapid City to relieve some of the issues with the overcrowded women’s facility in Pierre.


According to the Bureau of Finance and Management, staffing and operational costs for this facility will be appropriated in 2025.

Another $52 million this year will go toward the initial planning, design and land purchase steps in replacing the maximum-security state prison in Sioux Falls, which was built in 1881 and, as Noem said during her address, is “outdated, not compliant with [disability] requirements, and overcrowded.”

While no final decision has been made on where the land will be purchased, Jamison said it would likely make sense to use the area that already houses the state prison and attached complexes, though he admitted, “she's a little locked, there isn’t much room.”

Finally, nearly $300 million will be transferred back into the Incarceration Construction Fund to anchor the building phase of the new state penitentiary.

“The more one-time funds we can use, the lower the interest payments will be [when we use bond financing], so we have to start putting away some dollars for that,” said Rep. Mike Derby, who will chair the House Appropriations Committee.

Earlier this year, a consulting firm estimated construction costs at around $338 million, though rising construction and labor costs have almost certainly moved that price tag higher.

Lawmakers give a standing ovation following Gov. Kristi Noem's budget address, which she delivered on Dec. 6, 2022. Several legislators said that the large investment in prisons was a wise use of dollars, as it will lower the burden taken on by the state in a future bond raise.
Jason Harward / Forum News Service

“Under Governor Noem's leadership, we're ready to work with state lawmakers on these projects to modernize our corrections system,” Corrections Secretary Kellie Wasko, who has been an advocate for quickly addressing these issues since she began her stint earlier this year, wrote in a statement to Forum News Service.

Some legislators say that, while the dollars are a starting point for a better correctional system, the work does not stop at new facilities.


“We need buildings, but we also need programs and that’s what has been missing in our budget has been paying those correctional officers enough and funding alcohol, drug, job training, all of the other programming that needs to go on there,” Sen. Reynold Nesiba said. “In so many ways, this is a public health problem that we're trying to incarcerate our way out of.”

For Wasko and the rest of the governor’s team, the two goals of new facilities and new programming are hand-in-hand.

According to a one-page summary of the investment in the women’s prison, the new, less crowded facility “would allow for a therapeutic community where drug offenders would receive addiction treatment.”

On the men’s side, Wasko said at a July 26 Incarceration Construction Fund task force meeting that a new facility would have the benefit of efficient, centralized programming for inmates with physical disabilities, addiction and mental illness.

Despite large investments, regional jails left out of Noem’s address

A separate yet parallel study during this past interim session looked at ways to relieve similar problems of overcrowding and lack of investment at the county level.

Proponents of using some state dollars to help with upgrades in regional jail hubs like Brown County and Pennington County were surprised to see no mention of those ideas in the incarceration portion of Noem’s budget address.

“Many of us thought that [Incarceration Construction Fund] also was for local county needs for remodeling and construction of jails,” said Sen. Helene Duhamel, who served on the summer study and will chair the Senate Judiciary Committee this session. “So the question is now, you know, are we going to try to find more money for the counties that definitely have needs and no resources?”

While a draft final report from that regional jail's summer study specifically mentioned the Incarceration Construction Fund as a funding source, the final report as presented to the executive committee was changed.


Now, it simply asks the legislature to consider appropriating some funds in the form of “grants to counties, or through a revolving loan fund, or a combination of both,” removing the mention of the Incarceration Construction Fund and leaving a funding source up in the air.

“We have to take care of what's in our requirements and by law, and what we're obligated to take care of first, and that's the state penitentiary,” Jamison said. “We need to take care of that first and foremost.”

For Duhamel and others looking to make progress on regional jails, the lack of funding has jumpstarted another idea, which would create a sort of Regional Jail Authority to help groups of countries raise funds to fulfill their constitutional duties to house their inmates.

“It’s patterned after the railroad, the Regional Rail Authority, where all the counties along the route of the railroad combined, and all their property taxes went up just a very small amount,” Duhamel said. “So it's that same thinking for the counties that want this option to go together.”

The prospect of counties joining together and only slightly raising property taxes, Duhamel said, could make the bond measure referendums required to build these jails — which had been difficult for counties to pass through the voters — more popular with residents.

“It’ll be one of the first couple of weeks [of session] where we'll try to get that going,” Duhamel said, adding that she and others on the summer study have been passing a draft around to different groups. “I don't know why people would be opposed to it because they don't have to use it if they don't want to. It's just there to help the counties that don't have any source of income other than their fees and property taxes.”

“It's been great to see the support from the Legislature this year on backing up that type of investment," Gov. Kristi Noem told reporters days after approving $400 million in prison investments.

Jason Harward is a Report for America corps reporter who writes about state politics in South Dakota. Contact him at 605-301-0496 or

Jason Harward covers South Dakota news for Forum News Service. Email him at
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