Inflation pinching government budgets, jeopardizing major projects

Bids on bridge replacements, infrastructure improvements soar above expectations

Tucked between Raven Industries downtown campus and the Sioux Steel development, the Sixth Street bridge is in need of repair. (Joe Sneve/The Dakota Scout)

Inflation, federal stimulus and a backlog of infrastructure projects have governments in South Dakota in a pinch.

From townships and municipalities to the county and state, government officials are finding that skyrocketing construction prices are forcing them to spend drastically more than anticipated on building roads, bridges and buildings — or reconsider the projects entirely.

Gov. Kristi Noem last month said that rising inflation would force the state to spend more than $25 million more on projects already approved by state lawmakers.

And in Sioux Falls, city officials have until the end of the week to decide whether to accept or reject the bid for the Sixth Street bridge reconstruction project after the low bid was double what the city expected.

The downtown project was going to follow the Eighth Street Bridge reconstruction project that was finished in 2021. And it also included upgrades to the Big Sioux River Greenway. Mark Cotter, the city’s public works director, said the city estimated the Sixth Street project would cost in the neighborhood of about $11.1 million.

But the lone bid the city received for the project was $21.8 million.

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