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State Struggling To Spend Hundreds Of Millions In Remaining COVID Aid

State Legislature
South Dakota State Capitol

State officials still have hundreds of millions in federal pandemic relief money for businesses, nonprofits and healthcare providers, and current grant applications would use less than half of it.

The state received $1.25 billion in federal relief back in March. There’s about $585 million left unspent or unobligated that Gov. Kristi Noem and legislators want to give out as grants.

The grants are for businesses, business startups, nonprofits, community health providers and acute-care providers who can show they’ve been affected by the pandemic.

The application deadline was several weeks ago. About 6,000 applications came in. But those requests only total about $282 million – not quite half of the available funds.

Gov. Noem addressed the issue Wednesday during a press conference.

“Based on the program as it’s currently structured, there’s still going to be funds available after all of this is allocated,” Noem said.

Also Wednesday, Liza Clark, commissioner of the state Bureau of Finance and Management, updated the Legislature’s Appropriations Committee. She said many applications are still in process, and some could be denied for not meeting program qualifications, like having a 15 percent decline in business. Applicants also have to deduct any federal Paycheck Protection Program payments they received.

If some applications are denied, that would mean the final amount awarded could be even less than $282 million.

“At most, we would spend this amount,” Clark told the Legislature’s Appropriations Committee on Wednesday. “The number will either stay the same or go down.”

Clark said many applications have errors that need correcting. She said 270 applicants failed to respond to questions in the past week, leading her to plead with applicants to check their email.

“The worst thing that could happen is that all of us are getting phone calls on December 30th saying, ‘Where’s my money? Oh, I missed an email from two months ago, so now I don’t get a check?’” Clark told legislators. “Well, we have to have the information to pay you correctly.”

The state must spend or obligate the federal relief money by the end of December. Clark and the Appropriations Committee plan to meet again next month. They could consider options for the leftover money, which could be about $300 million.

Options include changing eligibility requirements and maximum awards for the grants. The current maximum grant for many applicants is $500,000. The state is also considering hazard pay for health-care workers, and asking the federal government to extend the year-end deadline.

-Contact SDPB reporter Seth Tupper by email.