Growing revenue in airport assistance fund leads South Dakota commission to loosen spending policies

A South Dakota fund for airport projects is growing faster than the state Aeronautics Commission is spending it, which led the commission to approve two policy changes Thursday. 

“We have this money. Let’s spend it on aviation,” said Chairman Robert Huggins, a pilot and retired air traffic controller from Sioux Falls.

One change will raise a cap on state Aeronautics Fund assistance for projects at smaller airports. The other change will make more state assistance available to ongoing expansion projects at the Sioux Falls and Rapid City airports. It replaces the existing maximum assistance for those projects with a formula tied to the size of terminal projects. The Sioux Falls and Rapid City projects are each expected to cost more than $100 million, with a mix of funding from federal, state and local sources.

State Department of Transportation officials told the commission the Aeronautics Fund is at a record balance of nearly $20 million and was projected, without Thursday’s changes, to reach nearly $30 million by fiscal year 2032.

The fund receives revenue from aviation-related taxes and fees, including aircraft fuel taxes, aircraft registration fees and taxes on aircraft sales. Aircraft sales generated $5.8 million in fiscal year 2025 and about $3.3 million in fiscal year 2026, while fuel taxes have produced about $1 million annually in recent years, according to Transportation Secretary Joel Jundt. 

Jundt said revenues are outpacing expenditures by roughly 2-to-1, making it hard to justify continuing to grow the fund balance while airport projects need funding. He said lawmakers could choose to redirect unspent money to another purpose, and changing commission policies to spend more of the money would demonstrate to lawmakers that the commission is using the fund for its intended purposes.

The Department of Transportation later told South Dakota Searchlight that the changes do not need legislative approval.