Scramble is on for state’s remaining federal pandemic aid

Seth Tupper/South Dakota Searchlight

South Dakota has $130 million of federal pandemic aid left and an abundance of ideas about how to spend it.

The requests from legislators are more than double the available funding.

“A lot of hands are already in that bucket, and that bucket is only so deep,” said Paul Lepisto, a lobbyist for the Izaak Walton League, which is a national conservation group.

He made the remarks to the Senate State Affairs Committee last week at the Capitol in Pierre. Lepisto testified against a bill that would use $20 million of the money for grants to the logging and sawmill industries in the Black Hills. The industries need the help to stay afloat after years of wildfires, a tree-killing mountain pine beetle epidemic and pandemic-related effects to their businesses, the bill’s proponents said.

The federal funds are limited to a list of eligible uses. The commissioner of the state Bureau of Finance and Management, Jim Terwilliger, testified against the bill. He said it “isn’t necessarily a presumed eligible use of funds.” Legislators endorsed the bill anyway and sent it to the budget committee for further review.

Republican Sen. Randy Deibert, from the Black Hills city of Spearfish, is the bill’s prime sponsor. He suggested Terwilliger might find, with more research, that the bill does meet one of the federal legislation’s qualifying uses.

“We’re not there yet, but it’s a hurdle we think we’ll overcome,” Deibert said.

Terwilliger said the bill is one of many seeking South Dakota’s remaining unobligated dollars from the 2021 American Rescue Plan Act. That was the last of several rounds of federal legislation intended to bolster the country against the effects of the COVID-19 pandemic.

The act created a State Fiscal Stabilization Recovery Fund that included $974 million for South Dakota. State lawmakers appropriated all but about $130 million of that money during previous legislative sessions, mostly for water and wastewater projects. The state Department of Agriculture and Natural Resources has been rushing to fund projects across the state.

Gov. Kristi Noem said in her December budget address that she wants to spend most of the remaining $130 million on “various water efforts.”

All of the money has to be obligated by the end of this year and spent by the end of 2026. Terwilliger identified at least eight bills seeking the remaining money during the current legislative session, which started in January and ends in March.

“You’ve got a total of $270 million in appropriations sitting out there right now going after about $130 million worth of actual money that’s available,” Terwilliger said.

Actually, the sum of the requests in the eight bills is about $280 million. Four of the bills have been unanimously endorsed by legislative committees, all of which sent the bills to the Legislature’s main budget panel, the Joint Appropriations Committee, for further review. The other four bills have not had hearings yet.