Joint Appropriations Surrenders to Governor on CARES Act Spending; DFP Proposes Real Coronavirus Relief Bill

Last updated on 2020-10-17

The Joint Appropriations Committee has issued its recommendation for spending the remaining $597 million of South Dakota’s $1.25 billion in coronavirus relief funds from Uncle Sam. Their draft resolution for Monday’s Special Session proposes the following relief measures:

1. $400 million in grants would go to small businesses, defined as operations with gross revenues no greater than $38.5 million, that saw at least 25% less cash flow from March through August than they did in the same six-month period in 2019. The resolution appears to include federal coronavirus relief like the Paycheck Protection Program; thus, if a business has seen cash flow drop 50%, but if PPP checks restored 30% of cash flow, leaving a net loss of 20%, the business would not qualify for relief from the state’s CARES Act pot. Grants would be capped at $100,000 per business.
2. $40 million in grants would go to small nonprofits under the same criteria. While not mentioned explicitly, legislators’ cronies in the economic development/chamber of commerce racket would appear to fit into this category of socialist largesse.
3. $10 million in grants would go to new businesses, defined as going concerns that registered with the state between September 1, 2019, and June 1, 2020, that saw average monthly income from March 1 through August 31 of this year that was less than 120% of their average monthly income prior to March 1 or that operated at a net loss for at least three of the six months from March through August. Those struggling start-ups would get grants worth up to 20% of their cash expenses, minus prior federal coronavirus relief.
4. $115 million in grants would go to licensed community-based health care providers or personal service providers for any decline in gross revenue from March through September of this year, compared to the same period last year, minus federal aid already received. Eligible providers include…
   1. nursing homes and skilled nursing facilities,
   2. assisted living facilities,
   3. youth residential treatment facilities,
   4. senior nutrition providers,
   5. in-home care providers for the elderly,
   6. adult day services,
   7. assistive daily living services waiver providers,
   8. intellectual and developmental disabilities services, and
   9. behavioral health care providers.

All of the above grants would be prorated if demand exceeds supply. Applications would be due October 23, although the health care provider grants would take a second round of applications if additional funds are available. The state would disburse by the federal CARES Act deadline of December 30.

Joint Appropriations divides up the remaining $32 million according to CARES Act rules:

1. $15 million goes to acute care hospitals.
2. $10 million goes to housing assistance.
3. $5 million goes to “destination marketing organizations advertising in accordance with the CARES Act”… which means… good grief! Not only are legislators not rebuking Governor Kristi Noem for spending coronavirus relief dollars on tourism ads to raise her national profile for 2024, but they are endorsing and expanding her misappropriation of federal funds!
4. $2 million goes to adult education and private nonaccredited education.

Joint Appropriations recommends no additional funding for public education. They evidently figure the $18.74 million promised to K-12 and $5 million promised to our public universities and vo-techs is enough, although my experience with my local school district’s inability to keep up with the pressures of the pandemic indicate otherwise.

But Joint Appropriations would make none of this law. Rather than capitalizing on the Governor’s weak, self-obsessed leadership in a crisis (sound familiar?) to reassert its co-equal status, the legislators backing this draft resolution (not a bill, but a resolution) surrender to the Governor’s shaky argument that she can do whatever she wants with CARES Act money, without any Legislative say. The resolution (not a bill!) puts no lock on the spending amounts or priorities. The resolution only requests (!) that the Governor report on the status of expenditures from the coronavirus relief fund by the tenth of each month and that she “inform and seek the input” of Joint Appropriations if she makes any adjustment to their recommendations.

Joint Appropriations’ surrender to misused Executive authority is bad, but its misprioritization of coroanvirus relief is worse. They would send only 2.5% of the remaining funds—the hospital allocation—directly into the fight against the coronavirus that is infecting record numbers of South Dakotans each day and directly causing all of the other losses that the committee is trying to relieve. They would send no more money to education, the single largest budget line of the state and the public service that the pandemic most disrupts. The Legislature is throwing at least two thirds of this money at economic activities that the free market itself has decided are not necessary in the middle of a pandemic.

Let’s see an alternative spending bill—not a resolution, but a bill, full-tilt law locking the remaining coronavirus relief dollars into coronavirus relief:

1. $200 million to the K-12 schools to hire additional classroom teachers, online tutors, and educational technology specialists to help our schools decrease class size, provide more personal local assistance to students and parents, and build more robust and effective online education channels.
2. $100 million to the K-12 schools, public universities, and vo-techs for educational technology (good for immediate needs and investment in ongoing innovation to address future pandemics, snow days, and deeper changes in how we educate our youth).
3. $100 million for personal protective gear and building modifications (e.g., service window shields, improved ventilation) for schools and local governments.
4. $100 million to hire more contact tracers and provide improved notification and quarantine services.
5. $97 million to reimburse South Dakotans diagnosed with coronavirus for out-of-pocket medical expenses.

Now that would be real coronavirus relief. Put on your boss pants, legislators, and tell the Governor it’s time to spend our money seriously against this pandemic.