SC plan to spend remaining COVID-19 aid would mostly prop up unemployment fund
As South Carolina nears $1 billion paid out to workers who’ve lost their jobs in the coronavirus pandemic, state lawmakers are planning to spend most of the remaining federal COVID-19 aid on propping up the state’s unemployment fund.
Colleges and universities, minority-owned and small businesses, local governments and COVID-19 testing initiatives will get a smaller piece of the remaining money, according to a spending proposal a S.C. House panel discussed Wednesday.
In the proposal, S.C. House members would allocate the majority of the state’s remaining federal coronavirus aid to the state’s unemployment trust fund, which has seen its holdings depleted by residents forced out of work by the COVID-19 pandemic.
The House Ways and Means committee proposal, which largely mirrors one put forth by the Senate Finance committee Tuesday, allocates $668 million — or roughly one-third of the $1.9 billion in federal aid South Carolina received through the CARES Act — to replenish the state’s unemployment insurance fund; reimburse state and local governments and colleges and universities for COVID-19 expenses; provide relief for nonprofits and small and minority-owned businesses; and fund statewide coronavirus testing and monitoring.
The plan allots more than 60% of the remaining federal aid, or $420 million, to the unemployment insurance fund, which has paid out more than $936 million since the pandemic hit in March, South Carolina Department of Employment and Workforce spokeswoman Heather Biance said.
As of Tuesday, the fund’s balance was $942 million, which includes $500 million lawmakers designated for it in the first phase of federal coronavirus aid spending back in June, Biance said.
The House committee’s spending plan, like the Senate’s, sets aside $93 million for statewide COVID-19 testing and monitoring, but differs in the amount it allocates for state and local governments, and for relief to nonprofits and businesses.
It proposes spending $10 million on nonprofits and $45 million on minority-owned and small businesses, while the Senate’s plan allocates $20 million each to nonprofits and minority-owned businesses. The Senate finance committee’s proposal does not specifically address small businesses.
S.C. Rep. Gilda Cobb-Hunter, D-Orangeburg, said Wednesday that she’d like to see more than $10 million disbursed to nonprofits, particularly those that offer rental assistance.
“I’m for taking the $20 million off of the UI (unemployment insurance) and making that pot for nonprofits a little bit larger so that more people can benefit from it,” said Cobb-Hunter, first vice chairman of the House Ways and Means Committee. “Because nonprofits are really struggling, particularly those who are working with renters and people who are homeless.”
Cobb-Hunter also said she wants to ensure that the aid flows to small and minority businesses that haven’t already received federal funding through the Payroll Protection Program, or other federal programs, and that any future appropriations bill defines what constitutes a minority business.
The Payroll Protection Program sent millions to S.C. businesses, including large ones, to help them stay afloat during the pandemic. Businesses that meet certain guidelines won’t have to repay the loans.
“A lot of times we have a definition for minority business that does not include people of color,” she said. “And I just want to make sure that this doesn’t wind up going to majority-white businesses with white women as the head, and minority businesses wind up with the short end of the stick.”
S.C. Rep. Kirkman Finlay, R-Richland, who chaired Wednesday’s committee meeting, said he’d been moved to include small businesses, particularly minority-owned ones, as CARES Act beneficiaries after reading that many would not survive the pandemic without financial assistance.
“So what we were thinking is something that if you could demonstrate you’d been in business for two or three years, that you hadn’t received PPP, that it became a very easy program,” he said.
Legislators have yet to finalize the finer details of their latest CARES Act spending proposal, including which nonprofits and businesses are eligible for aid, how much each can receive and what they must do to tap into the funding. A full committee meeting where the spending proposal will be discussed at greater length is scheduled for Friday.
South Carolina received $1.9 billion funding as part of the federal CARES Act legislation enacted in March to aid state agencies, colleges and universities, local governments and hospitals for pandemic-related expenses.
The money may be used only to cover COVID-19-related costs, such as coronavirus testing and paying first responders, and cannot be spent to plug unrelated state budget holes.
Lawmakers opted to spend the $1.9 billion CARES Act aid in two phases.
The first phase of spending, approved in late June, distributed more than $1.23 billion to cover various COVID-related expenses, and set aside the remaining $668 million for later in the year.
The unemployment trust fund ($500 million), state and local governments ($270 million) and the state Department of Education ($222.7 million) received the bulk — roughly 80% — of Phase 1 money.
The rest went to hospital relief, COVID-19 testing and monitoring, personal protective equipment and a statewide broadband expansion to help close the internet service gap in parts of the state to accommodate virtual learning for students and a growing demand for telehealth.
Guidehouse, an outside firm contracted to ensure all federal relief requests were properly vetted, among other things, received the final $10 million in Phase 1 federal coronavirus aid.
This story was originally published September 10, 2020 at 5:00 AM.