United States
South Dakota in 20th century : Late 20th Century
United States

A lending spree by state officials after World War I followed by bankruptcies among South Dakota’s farmers and ranchers in the 1920s placed a heavy economic burden on taxpayers that lasted until the 1950s. As a result, South Dakotans have elected economic conservatives to state governmental offices, who have tried to maintain a balanced budget without raising taxes. After experiments with a modest income tax (from 1933 to 1943), and a personal property tax (finally repealed in 1978), state leaders have restricted revenue-raising mainly to taxes on real estate, spending, and licensing. To keep money in the treasury, officials ran some state-owned businesses. In the fiscal year 1992, for example, a state-owned cement plant at Rapid City brought a profit of $7.5 million; four state-owned resorts produced gross receipts of $4 million; and the state treasury received nearly $37 million from a video-lottery system, and in 1995 the lottery raised more than $60 million.

As a consequence, early in the 1990s South Dakota had a reputation as being among the most lenient of the 50 states in terms of tax burdens on individuals and corporations.

Like other Western states, South Dakota has increased its dependence on federal resources. Federal contributions to the state grew from approximately 20 percent of the state budget in 1952 to nearly 40 percent by 1994. Most important have been federal funds to build and maintain highways; to support education; to aid senior citizens, dependent children, and handicapped citizens; to improve flood control; to facilitate airport construction; and to improve public health.

Based mainly on the Agricultural Adjustment Act of 1938, which provided for government price-support payments, subsidies to farmers and ranchers rose sharply from an aggregate of $94.9 million in 1977 to $436 million in 1994. South Dakota has also benefited from the operation of military bases and other federal agencies. Most prominent since 1940 have been the U.S. Air Force at the Ellsworth Strategic Air Command Base at Rapid City, the U.S. Bureau of Indian Affairs, the Internal Revenue Service, the National Park Service, the U.S. Forest Service, and U.S. Army Corps of Engineers. The Army Corps of Engineers built four of the six main dams along the Missouri River. These dams have earned a profit for the federal government since 1983 and have stabilized management of the Missouri River and substantially increased tourism to the state.

US air force
U.S. Air Force. smartcode.com
Federal resources have also been important for building roads in a state that encompasses about 20 million hectares (50 million acres). Beginning with the Federal Highway Act of 1916 and followed by the Federal Highway acts of 1944, 1948, and 1956, federal officials have matched state contributions to construct and maintain state roads. Nevertheless, South Dakota spent millions to put into place a complete road system of more than 130,353 km (81,000 mi) by 1980.
The key to the lasting flow of federal resources has been an able congressional delegation. South Dakotans, while electing fiscal conservatives to state governmental positions, have been steady in their commitment to elect federal politicians who believe in government aid programs. This particular strategy has allowed the state to balance its accounts. Encarta
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