As his eight-year tenure winds down, Sioux Falls Mayor Paul TenHaken is speaking candidly about policy battles with South Dakota’s Republican-dominated legislature, fractures within the state GOP, and the personal toll of leading the state’s largest city through a turbulent decade.
Why It Matters
Sioux Falls is South Dakota’s economic engine — the metro area generates roughly a third of the state’s total sales tax revenue. Decisions made at City Hall and the state Capitol about development, taxation, and infrastructure carry outsized consequences for the state budget and business climate.
TenHaken, a Republican who turns 48 this year, is barred by term limits from seeking a third term. A runoff election is scheduled for June 23 to determine his successor, who will be sworn in July 17. TenHaken will have approximately one month remaining in office after the handoff.
What Happened
TenHaken expressed frustration over the state legislature’s refusal to approve new tax incentives aimed at attracting large data centers to South Dakota. The Sioux Falls City Council had already moved forward on its end, approving the rezoning of 164 acres in the city’s northeastern quadrant earlier in 2025 to accommodate such a project — a move TenHaken backed.
But without state-level tax incentives, TenHaken said the effort was effectively dead. “The Legislature did not give a tax break for data centers. They ain’t coming here. Let’s stop talking about them. Sioux Falls is not going to have a data center,” he said.
The clash over data center policy is one example of the tension TenHaken described between Sioux Falls city government and a state legislature that holds a Republican supermajority. Despite sharing a party, TenHaken indicated that alignment on policy has not always followed from shared partisan identity.
He also pointed to broader fractures inside the South Dakota Republican Party, noting that the recent gubernatorial primary showed a near four-way split among candidates — a sign, he suggested, of a party working through internal disagreements rather than presenting a unified front. South Dakota’s parole crackdown, which has driven up demand for jail beds and increased state costs, is another area where tensions between state policy priorities and local capacity have become apparent.
Personal Toll of the Job
TenHaken reflected on the personal difficulties of the role, disclosing that threats he received during the COVID-19 pandemic were serious enough that he considered resigning. The situation grew severe enough that he purchased his first handgun for personal protection.
Despite those pressures, he described his governing style as fundamentally different from the combative politics that have become more common in Republican circles. “I’m a collaborator — I’m not an attacker, I’m not a divider,” he said.
By the Numbers
- 8 years — TenHaken’s total tenure as mayor of Sioux Falls
- 164 acres — land rezoned in northeastern Sioux Falls for a prospective data center project
- One-third — share of South Dakota’s total sales tax revenue generated by the Sioux Falls metro area
- June 23 — runoff election date to choose TenHaken’s successor
- ~20 years — approximate length of time U.S. Senate Majority Leader John Thune has been a prominent political figure from Sioux Falls
Zoom Out
TenHaken’s experience reflects a pattern seen in other Republican-led states where large urban centers and rural-dominated legislatures increasingly diverge on economic development priorities. Data center recruitment has become a flashpoint in multiple states, with local governments often eager for the tax base and jobs while state lawmakers weigh the cost of incentive packages against broader fiscal concerns.
The mention of Thune’s two-decade influence on the city also underscores a generational transition underway in South Dakota Republican politics, with new figures competing to define the party’s direction — as evidenced by the fractured gubernatorial primary. A recent Senate panel vote backing $20 million to study Missouri River water pipelines for South Dakota illustrates the kind of large-scale infrastructure investment that state and federal leaders continue to pursue regardless of intraparty friction.
What’s Next
Sioux Falls voters will head to the polls June 23 to determine who will lead the city next. The incoming mayor will inherit both the city’s economic momentum and the unresolved tensions between City Hall and Pierre that defined much of TenHaken’s final term.