The South Dakota Legislature opted to keep things simple and to follow Gov. Kristi Noem's COVID-19 policy of giving people freedom when they met on Monday for a special session to determine how to use remaining Coronavirus Relief Funds.
That was the message of District 8 legislators on Wednesday afternoon when they met with Eric Fosheim, executive director of the Lake Area Improvement Corporation, and Eric Hortness, executive director of the Greater Madison Area Chamber of Commerce, to record a video which will be posted on the organizations' social media platforms.
Instead of earmarking funds for testing and contact tracing as requested during listening sessions, the Legislature allocated $115 million for healthcare providers. They can use a portion of that to upgrade testing facilities if they want to, according to Sen. Casey Crabtree.
"They can use it for the best way possible," Rep. Marli Wiese concurred.
The legislators provided that information in response to a question posed after their formal presentation in which they reviewed the three types of COVID funding received in the state and focused on the small business grants which will be awarded prior to the end of the year. Wiese also touched briefly on listening sessions which were held prior to the special session.
She indicated five listening sessions were held: local governments, education, health and human services, small businesses, and agriculture.
"All of the recommendations that came from all of the committees went to Joint Appropriations," Wiese reported.
She spoke primarily about the health and human services listening session, noting that "a lot of people talked about money for testing" as well as for mitigation. Her comments were brief, but she did give special attention to comments related to long-term care facilities.
She said the committee heard "a lot of emotional testimony" from individuals who are unable to see loved ones in nursing homes. A number of proposals were introduced to rectify that problem, according to Wiese.
"We're counting on those long-term care facilities to use that money for those concerns," she said in response to a question toward the end of the session, explaining that funds had not been earmarked for that purpose.
Rep. Randy Gross provided the framework for the decisions which were made. He explained the federal funds "didn't come with a playbook" and said guidelines have changed as states have requested clarification prior to spending the money.
Gross said the state has benefited from three types of federal aid -- the Coronavirus Relief Funds (CRF) which the state uses under federal guidelines, the funds which the state administers through federal programs, and the funds, such as those received by ag producers, received directly from the federal government. While the amount received as a result of direct payments is unknown, South Dakota did receive $1.25 billion in CRF and nearly $221 million in aid through specific federal programs.
"All the funds received under the CRF must be spent by Dec. 30," Gross reported. "They can't be carried over."
He said the Joint Appropriations Committee looked at a variety of options to stimulate the South Dakota economy which were not allowed under federal guidelines. In making decisions, he reported, the JAC had three guiding philosophies: push as much as possible to those most in need, establish programs that did not create winners and losers, and keep the programs simple.
The JAC also kept in mind the need to cut the checks for the programs by Dec. 30, according to Gross.
An information sheet created four categories of CRF expenditures: nearly $75 million was appropriated by the Legislature in March in anticipation of federal aid; a little more than $110 million has already been spent; and approximately $468 million has been earmarked by the governor and her team. The Legislature opted to use the remaining $597 million for small business grants, healthcare, non-accredited adult education, marketing and housing assistance.
Gross explained the need to replenish the coffers for the Re-employment Insurance Fund. He reported that should the balance dip too low, employers would be expected to chip in more at a time when their businesses were suffering financially.
"The fund took a big hit. We don't know how much until after the fact," he said.
Crabtree explained the small business grants, which will be available to non-profits and start-up businesses in addition to established, for-profit businesses. He emphasized the fluid nature of the application and decision-making process at this time.
"We don't know how this is going to unfold," he said.
Currently, $400 million is set aside for small business grants, $40 million for non-profits, and $10 million for start-up businesses. Crabtree noted the funds for start-up businesses are not to start new businesses, but are to assist those who were opening their doors in the months leading up to the pandemic.
At present, the maximum grant is expected to be $100,000; the smallest grant will be $750. At present, the business will need to show a 25% loss between 2019 and 2020 to qualify.
However, because legislators could not anticipate the number of grants which will be received and because the funds must be expended by Dec. 30, District 8 legislators are encouraging businesses to apply even if they cannot show a 25% loss. The parameters of the grant may change after applications are processed, but a second application window will not be opened.
"When in doubt, apply," Crabtree stated several times. In response to a question following his presentation, he added, "It doesn't cost anything to apply."
The application window will be short. At present, it is expected to be Oct. 13-23. However, since the governor's office is negotiating with an outside company to process applications, that has not been confirmed, according to Gross.
Applications will be made on-line and will require businesses to provide income and cash expenses for March 1 to Aug. 30, 2019, and income and cash expenses for that same period in 2020. Businesses will also be asked to provide information about other federal funds received, such as those received through the Small Business Administration's Paycheck Protection Program.
"There is help available for those who need it. We want you to apply," Crabtree said.
Guidelines for non-profits and new businesses are somewhat different, but the application process will be the same, according to Crabtree.
"This is not meant to exclude anyone," Gross said, encouraging farmers to apply, but also noting that businesses that closed their doors were not eligible for grant funding.
In concluding remarks, Gross emphasized that legislators were making best-guess decisions in developing the programs. He emphasized that they will be adapted as needed to the circumstances.
"If there's money left over, we want to get it out," he said.
A YouTube video with the full discussion is available on social media platforms for both LAIC and the Chamber. Fosheim and Hortness said their offices will be available to answer questions about the small business grants.
Legislators said business owners may contact them as well, but they are not experts. They recommend going to the state Bureau of Finance and Management website for more information.
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