South Dakota budget office scrambles to track costs of governments’ responses to COVID-19

Capitol News Bureau

PIERRE, S.D. (KELO) — Fewer than three dozen people work in the South Dakota Bureau of Finance and Management. But since March, state government’s budget hub has spent even longer hours than usual, oftentimes six or seven days of the week, as they try to track all of the money that state and local officials have been spending in the battle against COVID-19.

Commissioner Liza Clark briefed the Legislature’s Joint Committee on Appropriations on Wednesday about how her office is communicating with people from the federal government and with county and municipal governments on what can, and can’t, be done with the $1.25 billion that South Dakota received from the coronavirus relief fund to respond to COVID-19.

Clark told lawmakers that, at this point, it looks like state government can make it through the June 30 end of the current budget year based on some of the latest data. That came one day after Governor Kristi Noem said she probably wouldn’t ask for a special session of the Legislature in June but didn’t rule out calling lawmakers back later in the year.

Here are summaries of some of Clark’s points Wednesday:

Medicaid use was down, as was state employees’ use of health care, since COVID-19 was discovered in South Dakota in March. South Dakota providers responded by halting non-emergency care for weeks.

Special education spending looks to be lower than estimated by about $5 million.

The state treasury recently received $9 million from the state tax on securities, covering the hole from earlier this year.

South Dakota’s economy began opening up about one month earlier than had been expected earlier in the pandemic.

On state sales tax revenue, three of the top 15 groups were down significantly during March, but five others rose by double-digits. April numbers should be available in the next 10 days or so.

State government can use federal money to backfill South Dakota’s unemployment insurance fund (officially known by its new name of reemployment assistance), rather than letting state unemployment taxes automatically increase for businesses.

Clark said she would like the appropriators to approve budget transfers in June, so the shifts take effect before the next budget starts July 1. She told lawmakers a July meeting could be needed too.

Various state government departments have seen their spending go up because of overtime reacting to COVID-19, but those expenses can be offset by some of the $1.25 billion.

Likewise for costs of people working in state jobs responding to COVID-19, such as test processors, contact tracers, Highway Patrol and unemployment processors.

Municipal and county governments have had costs for responding too. The governor recently said some of the $1.25 billion would be made available to them. Clark’s staff is working with them as well. Schools, universities and colleges will get tens of millions too.

Some state employees would qualify for hazardous duty pay, under the federal definitions, such as for preparing and revising models of COVID-19’s potential spread, working on Easter weekend holiday and putting in 18-hour days.

Representative Taffy Howard questioned how hazardous some of those duties were. She predicted many members of the public would too. “I can see eyes rolling. Where does it end?”

Clark said federal stimulus from the 2008-2010 recession came with much tighter reporting requirements. She said there were still audits six years later.

Several legislators, such as Senator Jack Kolbeck, praised Clark and her staff for their current work. Another was Representative Chris Karr, the House chairman of the panel.

“I appreciate the dialogue and the openness,” Karr told Clark. “It’s important we continue to have this dialogue.”

Karr advised the committee and the administration to be cautious about looking forward, not just short-term but for the next few years, so South Dakota’s economy can ramp up.

“I think there’s going to be a lot more conversations,” he said. 

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