PIERRE — The push for a new men's prison in South Dakota faced a setback Wednesday as lawmakers in the House State Affairs Committee signaled potential challenges ahead for what is projected to be the state's most costly taxpayer-funded construction project.

Following a hearing at the state Capitol, the committee refrained from offering a definitive "yes" or "no" to the proposal.

Gov. Larry Rhoden’s office and the state Department of Corrections (DOC) had hoped for the committee to approve a bill allowing them to allocate $763 million toward the prison project and send it to the House's budget panel with a favorable recommendation. Last year, the DOC received approval for $62 million to begin preparations on the project site.

The total projected cost for the facility is $825 million. Most of this funding was deposited into an interest-bearing account last year, prior to the DOC’s announcement of the final price.

Rather than passing House Bill 1025, which would finalize funding for the prison, the committee voted 12-1 to refer the bill to the House Appropriations Committee with no recommendation.

Several committee members expressed a desire for further scrutiny of the prison’s operational costs and the expense of developing the necessary infrastructure, such as the roads to connect the site to surrounding areas. The planned location, a 360-acre cornfield near Sioux Falls, would house a facility for 1,500 inmates and hundreds of staff.

Corrections Secretary Kellie Wasko emphasized the importance of the new prison, stating it would meet the state’s correctional needs for the next century.

Rep. Karla Lems, R-Canton, highlighted the project’s long-term implications: "For a hundred-year project, we had really better know what we’re doing before we rubber-stamp this," Lems remarked, reflecting the cautious sentiment shared by many of her constituents. The selected site is approximately 14 miles south of Sioux Falls, and local residents have voiced their opposition, even filing a lawsuit to compel the state to seek a zoning permit before proceeding. While the state won the case at the circuit court level, opponents are currently appealing the ruling at the state Supreme Court.

Opposition Focuses on Incomplete Price Estimates

Critics of the project pointed out that the $825 million "guaranteed maximum price" does not include potential change orders, post-construction operational costs, or the cost of paving the gravel roads around the site.

Both Wasko and Ryan Brunner, a senior advisor in Gov. Rhoden’s office, acknowledged that these costs were not fully accounted for, but they assured the committee that estimates for these expenses are either finalized or being worked on.

The state has allocated a $24 million contingency fund to cover change orders. While Wasko acknowledged the possibility of unforeseen costs, she expressed confidence in the project's planning: "We get it right the first time," she said.

The annual cost of operating the new 1,500-bed prison is expected to be $21.6 million higher than the current costs for the 144-year-old, 800-bed state penitentiary. The new facility would replace the aging prison in Sioux Falls, although plans for the older site remain undecided.

Brunner also referenced a study by the state Department of Transportation that is assessing traffic flows and road construction needs around the site. However, no cost estimates have been released for the proposed roadwork.

He added that the state plans to allocate funds for the road development in 2027, utilizing both state and federal highway funds.

Brunner also urged lawmakers to consider the potential for higher costs if the project is delayed, warning that inflation could increase the total price by up to $40 million.

Alternative Solutions Proposed by Opponents

Opponents of the new prison suggested other ways to address the state's prison needs, such as repurposing the DOC's 68-acre West Farm site near Sioux Falls, expanding the existing Jameson Annex, or purchasing the vacant former Citibank building near the current penitentiary.

In response, Wasko explained that the West Farm facility currently houses juvenile detainees, and there is no alternative space for them at this time. As of the hearing, there were 28 juveniles at West Farm, with the facility’s 68-bed capacity spread across two programs: Falls Academy and Brighter Transition.

Brunner cautioned that shifting the prison to a different location would undermine the $62 million already invested in the Lincoln County site. “You start moving those around and redesigning, then you’re no longer utilizing the $62 million we’re already spending on the current site,” he said.

Lawmakers Seek Further Examination of Funding and Operations

Three prison staff members testified about the outdated and hazardous conditions at the current penitentiary. Nick Rodriguez, a 10-year veteran correctional officer, shared his concerns about the facility's design, which creates significant communication issues. “How’s anybody going to hear you down there?” he asked, referencing the deafening noise during meal times due to the prison’s multi-tiered structure.

Gov. Rhoden’s office issued a statement following the committee's vote, underscoring the support for the project from law enforcement organizations and emphasizing the need for improved public safety. “The condition of our current facility is unacceptable,” the governor stated, explaining that the new prison would feature a circular cell block design to facilitate better monitoring and inmate movement.

Rep. Greg Jamison, a Republican from Sioux Falls, acknowledged the project's challenges but stressed its importance. “Clearly we need a new prison,” he said. “The location and the money are the issue. But it’s been well thought out, and it’s been well planned.”

Rep. Marty Overweg, R-New Holland, echoed the sentiment that the budget committee should have the opportunity to explore the financial details further. “What we haven’t talked a lot about is how we’re going to pay to run it,” he said, before his motion to forward the bill with a neutral vote was supported by all but one committee member, Rep. Spencer Gosch of Glenham.

Originally reported by John Hult in South Dakota Searchlight.