Senate appropriations panel gives do-pass to two-year extension for GOED air-service funds

A Senate appropriations committee voted 5-4 to give House Bill 11 89 a do-pass recommendation, sending to the full Senate a proposal to extend by two years the deadline for spending funds the Governor's Office of Economic Development (GOED) received in 2021 for air-service marketing and route restoration.

The bill would move the existing use-by date — currently June 30, 2025 — out an additional two years so airports can apply remaining grant dollars to recruit or restore commercial air service. Representative Steve Duffy, R‑Rapid City, who sponsored the bill, told the committee that aviation recovery after the COVID‑19 pandemic and related supply‑chain and pilot shortages delayed airports' ability to spend the money.

"It's a bill that's designed to extend the use by date of some GOED dollars that were allocated in 2021 from 06/30/2025 for 2 additional years," Representative Steve Duffy said.

Nut graf: Supporters — including airport officials, business groups and a tourism coalition — said the extension would give smaller South Dakota airports more time to use the remaining grant money to attract carriers, emphasizing that air‑service negotiations are lengthy and require time to line up aircraft, crews and business cases.

Lawmakers heard the factual breakdown the sponsor and witnesses provided: the 2021 appropriation included about $3.9 million split between Rapid City and Sioux Falls for route restoration and an additional $600,000 split among Aberdeen, Watertown and Pierre for essential air service. Testimony indicated Rapid City had spent roughly $1 million and used part of its allocation to secure seasonal service to Los Angeles and Orlando; Sioux Falls had not yet used its roughly $1.9 million allocation. Rapid City officials also said they have pledged $500,000 of the remaining funds to support a federal grant that would bring an additional $1 million in federal dollars.

"Air service development is a marathon. It's not a sprint," Patrick Dame, executive director of the Rapid City Regional Airport, told the committee, adding that airlines are beginning to revisit smaller markets as pilot and equipment availability improves.

Katie Seiberting, speaking as a representative of the Sioux Falls Airport Authority and Rapid City Regional, asked the committee to allow more time for the airports to use the funds. Mitch Rave of the Greater Sioux Falls Chamber of Commerce and Justin Smith, registered lobbyist for the Tourism Coalition of South Dakota, also urged support, saying restored routes would benefit both business and leisure travel.

Senator Helene Duhamel, who represents District 32, told the committee that tourism is a major industry in the Rapid City area and that improved air service brings economic benefits. "Rapid City is the most geographically isolated city in the Upper Midwest in the ... lower 48," Duhamel said.

In questions from committee members, Senator Howard pressed on precedent and budget process, saying she opposed extending special appropriations beyond their original spending windows except in "extraordinary circumstances." Representative Duffy and airport officials argued the COVID era represented such circumstances because aircraft and pilot shortages delayed restoration efforts.

On a motion recorded in the hearing, "I move to pass on House Bill 11 89," committee members moved the measure forward. Senator Gibbons (mover) and a second recorded as Senator Philhower were noted during the hearing; the committee roll call recorded five ayes and four nays. The clerk read the roll as: Miss Gibbons — Aye; Bill Hower — Aye; Carly — No; Vojta — No; Howard — No; Foster — Aye; Zickmund — Aye; Lopke — No; Otten — Aye. The committee recorded the motion as carried and the bill will go to the full Senate with a do-pass recommendation.

The bill would not create a new appropriation; it simply extends the time period in which GOED may obligate the 2021 funds. Committee testimony noted the funds remain in GOED and that no additional state dollars are requested in this measure.

The committee closed public testimony with no opponents on record and moved to a roll-call vote. The measure will next appear on the Senate floor for further debate and final action.

Ending: The hearing record shows proponents from airports, chambers and tourism businesses arguing that restoring routes will create more seats and lower travel costs for businesses and tourists, while at least one senator flagged broader concerns about changing long-standing budgeting rules. The date for a floor vote was not specified during the committee session.