Sioux Falls battening down the hatches amid slumping tax revenues

First quarter results point to challenging budget year with cuts in the works

Sioux Falls city councilors got a glimpse at where the city’s revenues are headed Tuesday, and they aren’t up.

Sales tax growth slumped in the first quarter of 2025, expanding at just a smidge above 0 percent compared to last year. The 2 percent sales tax that Sioux Falls collects on goods and services is the most important revenue source – funding many employee salaries, including public safety workers – as well as road construction, maintenance and other capital projects.

The .01 percent growth is well below the budgeted amount of more than 6 percent.

Sioux Falls unemployment rate holds steady; job openings dip