South Dakota’s Government: A Case for Modernization

South Dakota is searching for answers to high property taxes—but ignoring one of the most obvious fixes: cutting back on its bloated, outdated local government structure. With one of the highest numbers of government units per capita, it’s time to ask—why are we paying for so many governments in a state with so few people?

On a national level, the Department of Government Efficiency has demonstrated the impact of eliminating and streamlining bloated government bureaucracies. South Dakota could take a page from this approach. The state has long protected its local governmental infrastructure but now seems like a good time to take a serious look at how much taxpayer money could be saved.

Too Much Government for Too Few People

South Dakota prides itself on its small, efficient government, yet inefficiencies remain. Property taxes fund local governments and school districts, but how many of each does the state truly need? With one of the highest numbers of governmental units per capita, South Dakota’s sprawling local government bureaucracy is unnecessarily inflating costs for taxpayers.

66 Counties in South Dakota

Property Tax Relief Starts with Reform

The recent legislative session saw renewed interest in property tax relief. Property taxes fund local governments and school districts in South Dakota. Governor Rhoden has suggested that property tax cuts are only feasible with spending reductions at the local level, retooling the state’s property tax formula to shift tax burdens onto agriculture or commercial property, or finding new revenue sources.

Governor Rhoden

However, he has not addressed the potential for reducing the overall cost of the state’s local governmental infrastructure. Consolidating local government—counties, school districts, and others—could provide a sustainable way to ease property tax burdens.

An Outdated Framework

South Dakota’s government structure is largely shaped by historical precedent rather than modern efficiency. The state has 66 counties, many of which were established in the 19th century when population growth was anticipated, and long travel distances justified a local presence. Today, advancements in communication and transportation render many of these boundaries obsolete.

South Dakota leads the nation in the number of counties with populations under 5,000. Buffalo County, the poorest in the country, and Gann Valley, with just 14 residents as of the last census, highlight the inefficiencies of maintaining outdated county structures. Similarly, Sioux Falls, the state’s largest metro area, is divided between two counties and seven school districts—artificial separations that add complexity and costs.

School districts in and around Sioux Falls

A Bureaucracy That Exceeds Its Need

According to the Federal Reserve Bank in St. Louis, South Dakota has 1,900 local government units, including counties, cities, towns, townships, villages, and school districts. This puts it near the top nationally in governmental units per capita. While cities and towns may be necessary for local representation, the number of school districts remains a glaring inefficiency. Even after previous consolidations, South Dakota still has over 150 school districts, each requiring administrators, offices, and resources that could be pooled.

The Case for a Leaner System

Reducing the number of school districts and county governments wouldn’t necessarily mean closing schools or cutting essential services. Instead, it could mean fewer administrative salaries, reduced duplication of services, and streamlined operations. For example, Sioux Falls, Rapid City, and Aberdeen could each benefit from unified metro governments and school districts.

Cost Savings and Economic Benefits

The full financial impact of a streamlined local government remains unknown, but the potential savings are significant. Fewer school districts could mean fewer superintendent salaries. Merging counties could eliminate unnecessary elected positions and administrative redundancies.

The legislative district map in the state might be a good place to start in creating a modern system of counties. There are 35 districts, far fewer than the current 66 counties. And the districts in each metro area could be combined so we would probably be looking at something like 25 counties. That sounds like a less expensive and more efficient structure.

The map of legislative districts would not be a bad place to start in redrawing county boundaries

Challenges and Considerations

As with any major reform, there would be pushback regarding government jobs lost, county seats eliminated and shifts in local governance. However, prioritizing taxpayer interests over unnecessary government programs, infrastructure, and employees is essential to fostering a leaner and more effective government.

And while we are taking a common sense look at excessive government spending in South Dakota, how many public universities do you think Elon might suggest we need? Certainly not six.

Time for a Serious Conversation

South Dakota has a rare opportunity to reduce government inefficiencies and deliver meaningful property tax relief. Achieving this will take bold leadership—the kind we’re seeing from President Trump and Elon Musk in Washington. The question is: do we have that kind of courage here?

Redesigning local government to reflect today’s realities—rather than those of a century ago—could lower taxes, cut bureaucratic overhead, and improve services for residents. Like any major reform, the discussion won’t be easy, but it’s essential if the state hopes to remain fiscally responsible in the years ahead.