DSU's planned cyber campus in Sioux Falls hits snag as funding bill gutted in Legislature

Joe Sneve
Sioux Falls Argus Leader
Dakota State University announced Wednesday a $90 million initiative to grow the cyber-research industry in the state and expand to Sioux Falls. Here's an artist's rendering of the DSU Applied Research Lab that will soon come to Sioux Falls.

A cyber security campus in Sioux Falls is the latest proposal coming from Gov. Kristi Noem's office under the microscope by lawmakers not yet convinced it's worth the tens of millions of dollars she's seeking.

The governor's office and Dakota State University in December announced plans for a major expansion to the Madison-based school's cyber program, which equips students with skills necessary to work in information technology security.

In all, the expansion costs would total more than $90 million to cover adding infrastructure and recruitment capacity at DSU's primary campus in Lake County, while also building a new cyber security research center in Sioux Falls.

The initiative is pitched as a pipeline between the university and the cyber-security industry that will lure tech companies to South Dakota. And it has commitments from the public, private and non-profit sectors as well as a $30 million contribution from the state included in Noem’s proposed budget.

More:Cybersecurity promises jobs, six-figure pay and more — if it can get people in South Dakota

However, the project is now in jeopardy after increasingly frugal members of the powerful House Appropriations Committee this week opted to pull the $30 million out of the funding package the governor is eyeing.

"I think the program could benefit us, but I'm just a little leery about the amount," said Rep. Tina Mullaly, among nine members of the budget-setting committee that opted to advance Senate Bill 54 to the full House of Representatives with just $1 of funding included in it for DSU's cyber security expansion.

Dakota State University President José-Marie Griffiths speaks about a major announcement for the cyber research industry on Wednesday, Jan. 26, 2022.

DSU officials tout the vision for expansion as a transformational investment for the university and South Dakota at large. DSU President Jose-Marie Griffiths told lawmakers this week the initiative aims to capitalize on a high demand for cyber security professionals and keep more DSU graduates working in South Dakota.

The project, she says, will generate hundreds of additional graduates and generate as many as 1,500 private sector jobs.

Right now, the nation’s leading cyber security employers are primarily based on the nation’s coasts, and graduates of DSU’s cyber-operations program are leaving the state to find work after earning degrees.

“They simply can’t do it in South Dakota,” Griffiths testified Tuesday to the House Appropriations Committee.

The cost of building the cyber security research campus in Sioux Falls is expected to be about $50 million, facilitated primarily with private investment on the 16-acre parcel in the Sanford Sports Complex.

More:Dakota State University's cyber future closer to reality as Senate committee OKs 2 bills

Why do legislators object to the bill? 

The state’s $30 million, though, would not be specifically tied to the campus, but instead would be used more broadly by DSU to add faculty, staff and programming to bolster student recruitment and general expansion of DSU’s cyber training offerings.

And that’s got Mulally and other House appropriators, like Rep. Taffy Howard, questioning whether the state’s $30 million is necessary.

“I personally don’t believe we should be the ones responsible for accelerating the pipeline” between industry and graduates, said Howard, who’s in her final term as a state Legislator. “We should allow natural growth, we should allow the market to drive this and it will.”

More:Sioux Falls' DSU cybersecurity lab now could bring 1,500 jobs, DSU leaders say

Because the committee opted not to kill the bill and instead advance it without funding, it’s anticipated there will be an attempt when Senate Bill 54 is heard in the state House to reinstate the $30 million in the measure.

Mulally said it’s her hope that DSU will be able to provide more clearly define how it will use the funds it’s asking for as it relates to both the Sioux Falls campus as well as the school’s generally programming.

Rep. Randy Gross, R-Elkton, though, doesn’t share his fellow appropriators’ concerns.

“I realize there might be a little ambiguity … but these folks have been doing this," he said. "They’re growing the program and I think we should have confidence in the credibility that DSU has built in this area in recent years,."

What's next for the South Dakotabill?

DSU spokesperson Jane Utecht told the Argus Leader on Wednesday Griffiths and her staff are in the process of gathering details to clarify for lawmakers the distribution of the $30 million.

SB 154, expected to be considered in the House on Thursday afternoon, will require two-thirds support for passage.