South Dakota lawmakers clear path for $650M prison project

An orange excavator before a blue sky and a dirt mound.

October 1, 2025

South Dakota lawmakers have passed a bill to spend $650 million to build a 1,500-bed men’s prison in Sioux Falls, replacing an operational facility that was built in 1885. 

The new prison is expected to alleviate overcrowding and an associated problems that include fights, drug smuggling and inmate deaths. 

Existing facilities will remain in use until the new prison is complete. Construction is expected to begin in 2026 and run through 2029. 

The prison will be built in northeast Sioux Falls on an undeveloped patch of industrial land near the Sioux Falls Area Humane Society. The location is about three miles northeast of the existing penitentiary. 

Proponents of the new prison have said that the additional space and modern design will be more conducive to rehabilitative programming, mental health support and work opportunities. 

A truth-in-sentencing bill that requires some violent offenders to serve the full length of their sentences before parole has contributed to South Dakota’s overcrowding problem. The state may need to spend up to $2 billion within the next decade to adequately handle the increasing inmate population, the report stated. 

The bill passed Tuesday transfers $78.7 million from the state’s budget reserves to the prison construction fund and authorizes the Department of Corrections to spend up to $650 million to build the new facility.  

Most of the money is already in the fund, but about $42 million of the required funding is expected to come from future interest earnings. 

Photo by Anamul Rezwan from Pexels

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