Jodi’s Journal: New data shows Sioux Falls as clear driver of state population growth

June 8, 2025

Here’s the first thing to know about population growth in South Dakota: The surge in moving from other states driven by pandemic-era regulations clearly appears to be over.

In its place is a growth rate that’s sluggish at best as I’ll explain shortly.

Now here’s the second thing to know: This scenario would be considerably more dire without the continued growth of the Sioux Falls metro area.

In its most recent Dakota Outlook report, the Dakota Institute for Business and Economic Analysis took a dive into population changes statewide from mid-2023 to mid-2024.

It found that the state added 0.69 percent to its population, 6,364 people, versus growth of near or above 1 percent for the prior three years. At its peak, between 2021 and 2022, more than twice as many people — 13,231 — moved to the state.

“South Dakota’s modest population growth is clear when viewed relative to all states,” the report added. “The leading states, with growth rates as high as 2.04 percent in Florida and 2.17 percent in Washington, D.C., are largely concentrated in the Mountain West and Southeast — and Texas. The lagging states, as low as -0.03 percent in Vermont and West Virginia, are more scattered. South Dakota sits among a middle group, both numerically and within its region.”

South Dakota also lagged behind neighboring states Nebraska and North Dakota and had the same growth rate as Minnesota and Iowa — though because they started with a larger population base, more individuals still moved there.

What’s driving it? Migration. While the birth rate still outpaces the death rate in South Dakota, leading to positive natural growth, the number of people moving here from elsewhere is down. The state ranks No. 17 in domestic migration, while it ranks toward the bottom of the nation in international migration.

As I read through the report, the clear takeaway emerged when I got to the section on growth by county.

Remember how South Dakota added 6,364 people in the time referenced? It turns out, 4,277 of them were in Minnehaha or Lincoln counties.

“While having just over 30 percent of the state’s population, Minnehaha and Lincoln combined for just over half of the state’s natural increase and three-quarters of total net migration,” the report said. “Their combined net domestic migration is almost exactly equal to the state’s value, meaning that the remaining 64 counties had zero net migration in aggregate.”

In contrast, five of the state’s largest counties experienced population declines. Both Brown and Clay counties lost more than 150 people each. Pennington Country added 145. Yankton was flat.

Looking more closely at the Sioux Falls metro area, Minnehaha and Lincoln counties were almost equal in growth at more than 2,100 people each.

“The composition of the changes was quite different, however, with Minnehaha having strong contributions from both natural increase and migration while Lincoln’s growth was almost entirely due to migration,” the report said. “Within the migration flows, Minnehaha benefited more from international migration than domestic migration, while Lincoln’s increase was almost entirely domestic.”

You can view the full report here.

But keep in mind, this work isn’t meant to be some sort of academic exercise. It’s a tool for policy-makers too. Viewed from a business perspective, if one division were driving much of your organization’s growth, wouldn’t you look at what you could do to support that division’s current and future growth?

Isn’t that where you would add resources and pursue additional opportunities?

Granted, the analogy isn’t perfect. Unlike in business where you might walk away from underperforming elements, a state has to further subsidize them. But that makes all the more reason to encourage economic activity in the place that is positioned to bring in additional tax revenue, instead of allowing an anti-government ideology to curtail it.

It is noteworthy that state and federal funding are making a significant impact on positioning the Sioux Falls-area interstate system to meet the future. That’s one solid example of supporting growth.

But to ignore the needs and potential of the Sioux Falls Regional Airport, to continually reject a local option temporary sales tax to support major quality-of-life projects and to regularly funnel disproportionate social service needs to the largest city all lead to the same conclusion: The opportunities and challenges of growth are the metro area’s alone to tackle, despite the clear benefit received statewide.

Fortunately, strong leadership in the Sioux Falls area has managed to make the necessary investments to support growth. But going forward, it’s not going to get easier. The change in property tax policy will mean local government has to cut services despite a growing population. The political gridlock we see everywhere is going to make consensus around major investments hard to achieve.

But imagine if we had both a visionary mayor of Sioux Falls capable of building on the city’s success and a visionary governor willing to be the chief advocate for it. We have an opportunity to elect both in the coming year if such candidates emerge.

And if they don’t, there will be consequences.

The state numbers suggest “further tempering of expectations of growth, especially the arrival at the big benchmark of 1 million residents,” the Dakota Institute report said. “Instead of a projection of a million residents by 2030 based on the higher growth of a couple of years ago, the more moderate pace pushes the projection back closer to 2035.”

While there might be doubt around when the state will reach 1 million people, it’s clear how and why it will: because of the Sioux Falls metro area. But it’s not so much about hitting the big number as it is putting a plan in place for how to continually position the state as a location of choice. The data clearly shows the place to start is by positioning communities already having success to perform even better.

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