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South Dakota ranks 28th for cost of living according to this <a href='' target='blank'>comparison index</a> by the ACCRA.
South Dakota ranks 28th for cost of living according to this comparison index by the ACCRA.

Is It Cheaper To Live in South Dakota?

Nov 25, 2011

By Bernie Hunhoff

Politics are often cussed at Hunhoff holiday gatherings, and as many South Dakotans know, my extended family covers the ideological spectrum.

I happened to tell the clan of a fellow I know in Pierre whose home was heavily damaged by the flood. He was a state employee with a good job, but he couldn't get financing for a home "improvement" loan, even if the improvements were necessities like new sheetrock and flooring. So he told the bank to just keep the house and he left the state for a better-paying job.

"Well, that could be any of us," said one of my kin. "We could all get higher paying jobs elsewhere. But it's cheaper to live here."

Maybe I accidentally rolled my eyes, but I didn't argue because, after all, it was a holiday gathering and I was eating free.

But between you and me, I just haven't noticed that K-mart prices its lawn chairs and cranberry juice any cheaper in South Dakota than the rest of the country. It's well-documented that housing costs are on par with all but the high-cost areas of the USA, unless you live in one of those cool little West River towns like Fairfax or Bonesteel where the fishing is great and you can still get a decent old house for $12,875. Our energy prices were once lower, but they are catching up with the rest of the nation.

But what do I know. So I checked it out online, and soon came to this 50-state comparison. Of course, I was right ... and fortunately I am the only one in my family with a Web site — so I get the last word.

Check it out. South Dakota ranks 28th in cost of living — about in the middle of the pack. I was surprised to see that according to this data base, Nebraska is far cheaper. So are neighboring states Iowa and Wyoming. We are basically tied with North Dakota and Montana.

Wages are considerably lower in South Dakota. We generally rank around 50th in that category, so people working for wages are likely being squeezed here. Business owners, farmers and ranchers may or may not feel the same pressures, depending on their industries and their luck.

You know that we normally like to shed as nice a light as we can on life in South Dakota. But we also don't think it benefits anybody when we perpetuate a myth. If you take taxes into account (which this particular comparison doesn't seem to do) then South Dakota's ranking would probably improve somewhat. But not for the working man or woman, because they pay a far higher percentage of their pay in taxes than their wealthier neighbors.

And if you took taxes into account, then you'd want to also tabulate a hundred other things — like the fact that our technical school tuition is among the highest in the country. We are one of the only states that do not help low income students get a college education. One of the few that does not assist local communities and poor families with pre-school. Etc., etc. There's a flip side to being a low-tax state. So perhaps this comparison (which leaves out taxes) is one that might actually help the Hunhoffs to avoid family arguments. Or even eye-rolling.

South Dakota is a beautiful place to live. We don't need to perpetuate myths to make it seem even better.


08:57 am - Fri, November 25 2011
Rebecca said:
I visit Omaha often and the groceries seem cheaper there - even at Whole Foods. But I don't think I would rather live here.
09:33 am - Fri, November 25 2011
mikeyc, that's me! said:
I know that the time changes as you cross South Dakota, but I didn't realize that you are a whole day ahead of West River.
09:53 am - Fri, November 25 2011
Bernie Hunhoff said:
Thanks for catching the date, Mike (which we fixed). I dated it to appear Saturday, but the Web site ignored my command and published it pronto. Thus the mix-up.

We would never presume to be way ahead of our West River friends.
12:14 pm - Fri, November 25 2011
Ellen said:
I hear people say this all the time, so it's interesting to see some numbers. Next time it comes up I'll know what to say.
02:32 pm - Fri, November 25 2011

When I first started visiting South Dakota - falling in love with the Black Hills (and the wild burros of course) I was amazed at the number of people that I met that had two jobs just to make ends meet... property taxes are much higher than what I was paying in my former state (and no I'm not moving back for anyone who wants to make the comment!), food is far more expensive (though restaurants are cheaper) houses were still a little less and everything else seemed about the same.... Not only are the wages low for the work that folks do, the number of jobs that would require higher pay are far more people - at least on this end of the state are cleaning hotel rooms and bussing tables... Oh well.
04:42 pm - Fri, November 25 2011
Jim said:
Interesting chart if I'm reading it correctly South Dakotas transportation is the lowest in the nation. That surprises me given the distances and lack of mass transit. Maybe we stay home a lot. As for west river I'd presume anybody experiencing great hunting and fishing from an affordable house in Gregory is way ahead of most of us.
06:04 am - Mon, November 28 2011
Charlie Hoffman said:
What would be interesting is if we put together a list of grocery items and on the same day went to the store in Ashley, ND and Eureka, SD (only one in each town so there is little competition locally) to buy the exact same list of goods. WIth ND not having a sales tax on food one would assume that billing should be less with the SD billing higher.
08:41 am - Wed, November 30 2011
Justin said:
Hmm. I'm not convinced by your estimation of SD as "middle of the pack" in terms of cost of living. The very bottom of the Composite Index score (essentially and average of all the scores) was Tennessee at 89.36, and the highest was Hawaii at 167.08 . South Dakota's index score was 98.38. While that places us, as you say, at 28th, we are 9 points from the absolute cheapest, and over 68 points from the most expensive. Put another way, on this 77-point range from lowest to highest, we rank in the bottom 12%. If you broke it down by population, I think we'd show just as good a score (that is, look at the terribly high cost of living in most of the NE corridor, or in California). Could things be better here (housing!)? Sure. But I think placing us in the "middle" is a distortion of the costs.
12:32 pm - Mon, December 5 2011
Jeff Holweger said:
dang! Now I see the old email ploy. Get me to look at one story and lo, and behold, more bait...then why not read the whole magazine online? Oh no you don't....send mine by snail mail..=8-{)>
01:12 pm - Mon, December 5 2011
Laura Johnson said:
You're right, Jeff - it is a dastardly trick...a trick to give you more great South Dakota content than we can fit in the magazine. (Insert diabolical laugh here.) Don't worry, your copy of the Jan/Feb issue should be on its way to you sometime after Christmas. In the meantime, why not enjoy what we have to offer here?
02:44 pm - Tue, December 6 2011
Steve Sewell said:
Justin is very wise; he has correctly interpreted the data
01:04 pm - Wed, April 2 2014
Dan said:
I know this is an old post but this latest review shows SD as the cheapest place to live:
11:40 am - Mon, February 1 2016
Leon said:
Hi i have a job offer for 19 and hour there is it worth it as far as cost of living. I am black and my wife is Spanish is race an issue as well?
09:13 pm - Sun, October 14 2018
Erica said:
I know this is an old post, but it came up when trying to research why the cost of housing (buying in my case) is so high in South Dakota. I am currently looking for a home in BFE SD, about 50 miles out of Sioux Falls. Even smaller older, not updated homes, are hitting close to 200k where I am looking. A very small town with only 4 homes currently on the market, in the middle of no where- cheapest home is 180k and then second jumps over 300k. And I am not talking mansions here. Just your average midwestern home.

Something is not right with housing costs here. I have lived in MANY states over the years and what you get for money in South Dakota is absurd. Money for homes should go much further here, especially in the smaller towns. Even in Sioux Falls you should be able to find a lot more homes for 100-150 than what you can rather than having to have 225-even 250k as your starting point.

I can't wait to leave this state for the very reason that Sioux Falls (Where we currently live) seems to want to push homeowners out with constantly increasing property taxes (which are high for the area when compared to other towns across the midwest of its size and what city offers. It is getting almost impossible to sell your home and try to downsize in home size and price to reduce mortgage.
05:06 am - Sat, May 18 2019
Youbetcha said:
The real cost of living in the Dakotas is lost on people who have never lived, & sometimes have never traveled out of their state in their entire lives.The cost of housing is misleading partially because of the prices of very old and small houses seems lower than the national average but there are a lot of six to seven digit priced homes around the state. Another reason may be because there are a limited number of building contractors, many concentrating on commercial projects during the good weather so there is a lack of housing in general compared to the influx of people moving from other states. Property taxes are double that of California, and the tax man can & does assess every year, luckily banned by the Golden State's Tax Revolt Prop 13 in the 70's.It would be more tolerable if the taxes went to infrastructure but the roads in SD are some of the worst I've witnessed. The money instead goes social programs.The Elephant in the room is South Dakota's taxing of everything including groceries and services. CBPP: "Three states continue to apply their sales tax fully to food purchased for home consumption without providing any offsetting relief for low- and moderate-income families. They are Alabama, Mississippi, and South Dakota.[3]" "[3] Sales tax rates in these states are as follows: Alabama: 4 percent, Mississippi: 7 percent, South Dakota: 4.5 percent. South Dakota offers a limited refund of either sales or property taxes to eligible seniors and disabled residents. Most households in the state pay the full sales tax rate on food. "Native born families may also not realize the PRICE of groceries is high, dairy and meats are much higher than even neighboring metro areas where there are interstate and more competition and retailers.South Dakota does have a lower tax on vehicle & watercraft purchases than the regular tax rate, but the lack of competition may make prices higher in state than shopping out of state.
02:00 pm - Tue, January 21 2020
Juglenaut said:
Pretty much everything in South Dakota is expensive, or more so "the border states". I know buy local, however if one feels like they are getting ripped off on anything from food to home and car maintenance which is anywhere from 200% to 500% markup plus labor if you have someone else work on your broken stuff. This area has a way for changing a person and to overcome shortcoming and limitations or pay the piper and dish out large money.

Buy locally yes but getting ripped off is not so cool anymore.

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