S.D. officials lay out for legislators a plan for spending a second round of federal COVID aid

Capitol News Bureau

PIERRE, S.D. (KELO) — The Legislature will be asked in January to authorize Governor Kristi Noem’s administration to put to work a massive chunk of South Dakota’s $1.25 billion share from the American Rescue Plan Act that Congress passed, and President Biden signed into federal law March 11.

Roughly $974.5 million is available for state government. Her chief of staff and a half dozen of the governor’s cabinet members went before the Legislature’s COVID Relief Liaison Committee on Thursday and outlined their plans to use $871.5-million of it.

Separately, the new law is also directly sending South Dakota counties up to $171.8 million, Sioux Falls $25.4 million, Rapid City $13 million, and other municipal governments $65.2 million.

That’s on top of state and local governments’ spending from the federal CARES Act that passed last year.

The flood of funding has turned state government from squeaky-tight to suddenly looking for ways to make lasting differences. Senator Ryan Maher recalled then-Governor Dennis Daugaard calling for 10% budget cuts shortly after he took office in 2011. “We still remember those days very well,” Maher said.

Hunter Roberts, the state secretary of agriculture and natural resources, said the spread of COVID-19 has led the federal government to send piles of cash to South Dakota and the other states. He said the latest round of money needs to be used in ways that are transformational because future generations will be re-paying it.

His agency would get $600 million to spread among government sponsors of South Dakota water projects. The state Board of Water and Natural Resources that makes the grant and loan decisions was deluged earlier this month by an overload of applications for more than 250 projects totaling some $3.2 billion.

Roberts said the volume “shocked” him: “A big list of projects — certainly more than we thought.” He said it is “unrealistic” to expect so many projects to be funded and finished by December 31, 2026.

Another $60 million will be sought for upgrades to water systems for facilities that state government owns throughout South Dakota, ranging from Western Dakota Technical College in Rapid City to South Dakota State University in Brookings and the State Fairgrounds in Huron. And $50 million would go to help communities expand wastewater and storm-water infrastructure.

Other departments and offices that would get some of the money if lawmakers approve are Social Services, Health, Tourism, Labor, Administration and Economic Development.

The governor’s chief of staff, Aaron Scheibe, said projects need to carefully stay within the boundaries that Congress and the Biden administration have set because any money spent in error need to be paid back. He said South Dakota’s spending from the CARES Act is still under scrutiny by the U.S. Department of the Treasury.

“That bill may come due at a time we don’t have the general funds to pay it back,” Scheibe said. He added, “We don’t want to pay this money back.”

The governor will formally lay out her plans for the coming budget in a speech to the Legislature next month. The committee’s chair, Senator Lee Schoenbeck, said the meeting was well worthwhile. “I found this hugely educational and really appreciated the process,” he said.

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