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Politics

$1.25 Billion In Federal Aid Unspent So Far

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The state of South Dakota is sitting on $1.25 billion in federal relief money.

U.S. Senator Mike Rounds wants to allow states to use a quarter of those federal dollars to backfill shortfalls.

Governor Kristi Noem says the state is continuing to receive U.S. Department of Treasury guidance on how to use those federal dollars.

Right now, the state is evaluating what options are on the table to use that money. Noem wants to used it for revenue losses from declined sales tax collections.

“We have asked for flexibility to be accountable on dates that we could show the virus has impacted the state of South Dakota,” Noem says. “Prove revenue shortfalls based on prior performance. They are very open to having that conversation.”

Noem says Congress may need to make statutory changes.

One idea US Senator Mike Rounds has is to allow states to spend a quarter of the federally allocated money on revenue short falls.

In South Dakota’s case, that would mean the state could use $312 million of those dollars to shore up losses from sales tax collections and video lottery.

Rounds says it’s proposed legislation that will allow state to match their Medicaid priority and fund emergency services.

“We don’t know what that exact cost is going to be,” Rounds says. “We just know that it’s going to go on for a while. We really didn’t want to start out making another commitment until we actually know what the impact is going to be for how long this is going to go on and what the real cost is going to be.”

There is support for some flexibility to the states according to U.S. Senator John Thune.  He says there’s sympathy among senators in loosening up restrictions applied to dollars already distributed.