Because many businesses have closed or significantly scaled back operations, COVID-19 continues damaging South Dakota’s economy. During the last month, more than 26,000 state residents have filed initial unemployment claims.
With business activity down by such a substantial margin, Gov. Kristi Noem is hoping for flexibility with South Dakota’s portion of the $2.2 trillion Coronavirus Aid, Relief, and. Economic Security (CARES) Act, recently passed by Congress and signed into law by President Donald Trump.
During her Thursday news conference at the State Capitol in Pierre, Noem said she is anticipating about a 50% drop in video lottery revenue due to the COVID-19 outbreak, in addition to “substantial decreases to our sales tax revenue.”
Noem has said there will likely be a special legislative session in June to rework the state budget. She is hoping the federal government will help her avoid cuts to three specific areas she identified on Thursday:
- Nursing homes, and
Earlier this week, reports surfaced that South Dakota would receive $1.57 billion from the CARES Act. Thursday, Noem said the amount was closer to $1.25 billion.
Either way, Noem said members of Congress are making her already challenging task even more difficult by requiring her to spend the money on programs she doesn't want.
“They tied our hands on how we can spend it,” Noem said of the federal funding. “The only way I can spend this money is on COVID relief. I can’t spend it to replace revenues; I can’t spend it to make up some of the difference that we’re seeing from our economy stalling and people not out shopping and people not participating and adding some sales tax revenue to our state budget.”
As a proud fiscal conservative who spent eight years representing South Dakota in the U.S. House, Noem said these restrictions are not fair to states such as hers. She used the example of states that are heavily controlled by Democrats -- some of which had already unmanagable public pension debts before COVID-19 struck -- as creating problems for more responsible states.
“What they (members of Congress) want me to do is go out and create a bunch of new government programs. “I don’t want to blow more than a billion dollars growing government,” Noem said.
“All I really want to do is make sure that I don’t have to slash teacher funding; to make sure that I don’t have to cancel highway maintenance,” she added.
“I don’t want to cut funding for nursing homes.”