Senate committee votes 5-4 to extend deadline on GOED air-service funds for two years

The South Dakota Senate Appropriations Committee on a 5-4 roll call recommended passage of House Bill 1189, a proposal to extend by two years the use-by date on 2021 Governor—s Office of Economic Development (GOED) appropriations intended for airline route restoration and marketing.

Representative Steve Duffy, sponsor of HB 1189, said the bill would extend the current June 30, 2025, deadline for spending those GOED dollars by an additional two years. "It's a bill that's designed to extend the use by date of some GOED dollars that were allocated in 2021," Duffy said, adding that no new appropriation is tied to the measure.

The measure would preserve funds set aside in 2021 after the COVID-19 downturn in air travel: $3.9 million split between Rapid City and Sioux Falls for route restoration and $600,000 split among Aberdeen, Watertown and Pierre for essential air service, according to testimony. Duffy and airport officials said pandemic-related supply-chain problems and a pilot shortage slowed carriers' ability to restore routes and delayed use of the funds.

Proponents told the committee they still need more time to recruit or restore routes. "Sometimes these processes and these developments ... take some time and we just need a little extra time, to utilize these dollars," said Katie Seiberting of the Sioux Falls Airport Authority. 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.

Patrick Dame, executive director of the Rapid City Regional Airport, said Rapid City has already put some of its allocation to work and has used about $1 million to secure seasonal service to Los Angeles and Orlando. Dame said Rapid City has roughly $500,000 committed as a match for a federal grant that would bring in an additional $1 million. He said Sioux Falls has not yet used its roughly $1.9 million allocation but is pursuing year-round service such as Washington, D.C.

Opponent testimony was not offered during the hearing. Several committee members questioned how often special appropriations have been extended and whether allowing the funds to revert to the general fund would let GOED use other internal funds for the same purpose. Representative Duffy and airport witnesses said the money is already appropriated and no additional state funds are requested.

Senator Howard announced a no vote, saying, "I will be voting no on this simply because I don't believe we need to go down the road of changing our budgeting methods and the way we have allocated funds." The committee recorded five yeas and four nays and sent the bill to the Senate floor with a do-pass recommendation.

Votes at a glance: House Bill 1189 — Do pass recommendation to the Senate floor; vote 5 yeas, 4 nays. The committee recorded Ms. Gibbons (Aye); Bill Hower (Aye); Carly (No); Vojta (No); Howard (No); Foster (Aye); Zickmund (Aye); Lopke (No); Otten (Aye).

The bill would not add money to GOED's budget; supporters said the extension would allow airports additional time to use already-appropriated funds for route-restoration efforts that stalled during and after the COVID-19 pandemic. The committee did not hear formal opponent testimony. The bill will proceed to the full Senate for further consideration.