Leftover COVID-19 aid to go to the unemployment trust fund, small SC businesses
Remaining money from the state’s CARES Act dollars will go to the unemployment insurance trust fund and provide grants to minority owned and small businesses as well as nonprofits in the state.
The House and Senate on Wednesday adopted a compromise on how to spend remaining CARES Act dollars — totaling $693 million in federal relief money sent to the states in response to the coronavirus pandemic.
“It’s not everything that the House wants, but it’s a fair resolution,” said state Rep. Murrell Smith, a Sumter Republican and the chairman of the House Ways and Means Committee. “This is very important to the citizens of the state of South Carolina. And to our local governments and our state agencies that they have the ability to apply for these remaining dollars.”
Under the compromise, most of the money — or $420 million — will go towards shoring up the unemployment insurance trust fund, which paid out benefits to more and more people this year after they were laid off or furloughed amid the pandemic.
The amount will keep unemployment insurance tax rates the same for the businesses that pay them, senators said.
But it also will boost the fund to higher levels than before the pandemic — something that will help the state deal with continued economic uncertainty in coming months.
Before the pandemic, the state had nearly $1.1 billion in its unemployment insurance trust fund. At one point the state paid out $70 million a week in unemployment benefits and by Aug. 1 the fund had $566 million. The amount in the trust fund has rebounded, reaching nearly $915 million as of Monday. That recovery was due in large part to lawmakers in June appropriating $500 million of federal dollars into the trust fund, as part of their first phase of CARES Act spending.
Last month, South Carolina’s unemployment rate was 6.3%, a drop from July’s unemployment rate of 8.7%. In April it had reached 12.8%.
But the state still has a ways to go before reaching pre-pandemic unemployment levels. In March during the early stages of the pandemic and before the economic slow down, South Carolina’s unemployment rate was 3.2%
Legislators also set aside $25 million for nonprofit organization relief, with priority given to those who did not receive Paycheck Protection Program money or other CARES Act assistance.
Nonprofit organizations, such as food banks, saw higher demand as people sought their help during the economic nosedive caused the pandemic.
“If anything, they’ve obviously continued to work harder and harder to meet the needs that eight months ago (they) never envisioned ... being there,” said state Sen. Thomas Alexander, R-Oconee.
The compromise also sets aside $40 million for minority owned and small businesses. Grants will be made available for a maximum of $25,000 and priority would be given to those who did not receive a PPP loan.
“They’re the ones who have not been able to receive the PPP loans throughout the process and they’re the ones who have suffered most,” Smith said of small businesses.
In the compromise, $115 million has been set aside for state agencies, local governments and independent colleges and universities.
To continue to pay for COVID-19 testing and monitoring around the state, $73 million will go to the Department of Health and Environmental Control and $20 million to the Medical University of South Carolina.
Under the bill, the Department of Education will be able to spend money it has left over from its academic recovery camps and LEAP days, days used to allow students and teachers to get situated prior to the start of the school year, on personal protective equipment, tutoring and school nurses, among other things.
The Legislature originally allocated $210.7 million for the recovery camps and LEAP days, but $75 million is expected to be left over, the Department of Education has said.
This story was originally published September 23, 2020 at 1:55 PM.
