Why SD might reject federal funding

SIOUX FALLS, S.D. (KELO) – From summer food programs to home energy rebates, South Dakota has turned down millions of dollars in federal assistance programs.

The Home Energy Rebates program would have provided the state with $69 million to give to South Dakotans rebates on purchasing energy-efficient appliances.

Sun Bucks is another federal program where families would receive a total of $120 over three months during the summer on top of other benefits like  SNAP (Supplemental Nutrition Assistance Program) and WIC (Women, Infants and Children), and meals would be free from local meal sites.

Governor Kristi Noem’s administration recently turned down both of these programs.

What are the reasons the state may reject or not apply for this federal money? Jim Terwilliger, South Dakota’s Commissioner of Bureau of Finance and Management (BFM), said one of the reasons is a lack of administrative staff.

“We really don’t have the staff or administrative resources to take on additional federal programs right now,” Terwilliger said during a Legislative appropriations m e eting last month.

“We have not applied for this and we’re not intending on applying for this due to our inability to go administer a program like this,” he later added about the energy rebate program.

Terwilliger said there is currently only one full-time employee in the South Dakota energy office and an influx in applications to go over, funds to distribute and the other maintenance required to utilize the money, wasn’t doable for the office.

“In many instances, a new federal program is only expected to last a few years.  We do not believe it is in the best interest of the state to hire new employees supported with temporary federal funding, especially knowing that in two or three years the program may be discontinued, resulting in staff layoffs,” Colin Keeler, Director of Financial Systems at the BFM, told KELOLAND News in an email August 26.

Terwilliger said South Dakota is viewing all of these programs under the Inflation Reduction Act and other federal funding programs as “one-time” payments that would not be sustained over the years. He noted that departments in other states increased their staff to help handle COVID-19 relief grants and are now left with an abundance of positions and little continual funding.

House Appropriations Committee member Rep. Linda Duba criticized the state for turning away the funding due to administrative costs during the July meeting. She pointing to the additional expenditures from the recent flooding or a low incoming housing unit trying to install energy-efficient appliances as benefits to individual South Dakotans.

“I think it’s extremely unfortunate that we made the decision for the people of South Dakota not to apply for this opportunity for them to receive a rebate for change they may be making to their house as a result of damages they may have incurred,” Duba said.

Terwilliger said that for federal funding, it starts with the agencies to review the applications and eventually makes their way to Gov. Noem

“Ultimately yes, the Governor and executive branch makes the decision whether we should move in conjunction with advice from agencies… of whether we pursue a certain allocation of funds,” he said.

Other recent programs that South Dakota has turned down include climate pollution reduction grants, air pollution monitoring and screening, and a methane emissions reduction program.

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