Tourism department seeks authority to match higher revenues; launches Destination Development and 'Forever 605' stewardship

Pierre — The South Dakota Department of Tourism told the Joint Committee on Appropriations it had a record year for visitation and visitor spending and asked for additional expenditure authority to align its budget with higher-than-expected tourism-promotion revenues and grant awards.

Secretary Jim Hagen (Hagen identified himself as the department head) led a broad briefing covering the department’s structure, fiscal requests and two new initiatives: Destination Development, a rural tourism development effort, and Forever 605, a stewardship campaign aimed at reducing overtourism impacts. "I would rather have a better quality visitor who's staying longer and spending more money," Hagen told the committee in response to questions about overtourism.

The department reported FY 2024 totals of 14.9 million visitors and more than $5.0 billion in visitor spending, figures produced using taxable sales data and modeling from Tourism Economics (the department’s research contractor). Secretary Hagen said tourism supports close to 60,000 jobs and generates roughly $400 million in state and local tax revenue. He also described the funding model: a tourism-promotion tax on visitor-facing businesses and a portion of Deadwood gaming revenues provide the department’s operating funds; the department receives no general fund operating support.

Budget requests include $588,000 in other fund expenditure authority to match projected increases in the tourism-promotion tax, a $487,000 federal fund adjustment for National Endowment for the Arts awards to the South Dakota Arts Council and one-time authority requests tied to ARPA-funded grants that the department has been dispersing (scheduled to end after FY 2026). The department asked for a one-time $1.5 million other-fund authority contribution toward Cultural Heritage Center exhibit renovation.

Destination Development: Hagen said the department will create a new, sustained program to help communities under 30,000 people with product development (trails, signage, main-street improvements) and seed grants using existing tourism promotion funds. The department expects to work with outside consultants and local leaders; specific grant sizes will be developed after applications and priorities are set.

Forever 605 stewardship: The department described pillars for respectful travel — seasonal dispersal, outdoor preparedness, wildlife respect and shopping locally — designed to reduce concentrated pressure in the Black Hills and other popular sites.

Committee members asked about measurement and efficiency. Kirk Holstein, research director, explained the visitor-spending model uses taxable sales, feeds that data into tourism econometrics software (IMPLAN/Tourism Economics) and applies sector-specific multipliers. The committee also asked about the department’s ARPA-funded programs, staffing, and the sustainability of one-time spending once the ARPA allocation ends in 2026.

Hagen highlighted recent national recognition for department marketing and said the department plans to provide a 45-day visitation forecast to help industry partners plan. No formal committee action or vote on the budget request occurred during the hearing; the department will appear again in the appropriations schedule.