Special House Committee Talks Federal Rescue Funds A special House Ways & Means ad-hoc committee tasked with vetting the allocations of the American Rescue Plan (ARP) funding held their first meeting this week to begin the process of determining how to allocate roughly $2.5 billion coming to the state.
The committee is chaired by Rep. Bruce Bannister (R-Greenville) and co-chaired by Rep. Bill Clyburn (D-Aiken). Representatives serving on the committee include Gilda Cobb-Hunter (D-Orangeburg), Gary Simrill (R-York), Bill Herbkersman (R-Beaufort), Lonnie Hosey (D-Barnwell), Leon Stavrinakis (D-Charleston), Nathan Ballentine (R-Richland), Todd Rutherford (D-Richland), Heather Ammons Crawford (R-Horry), and Lee Hewitt (R-Georgetown). The committee received an overview of the funding from the Executive Budget Office (EBO). They also heard from the Office of Regulatory Staff (ORS) on broadband efforts as well as the Rural Infrastructure Authority (RIA), SC Association of Counties (SCAC), Municipal Association of SC (MASC), and representatives from SC Special Purpose District Association. State and Local Government Funding State and local governments are receiving $4.3 billion in ARP funding. Counties and Metropolitan Cities already have access to their funds via a direct allocation from the federal government.
To date, 44 of 46 counties have drawn down their funds, and SCAC has encouraged all to put the money in an interest-bearing account until final guidance on expenditures is available. (This is because any interest earned on ARP funding may be used as general fund revenue.)
Cities with fewer than 50,000 people are slated to receive a $435.1 million allocation (collectively). However, they do not have access to the funding until Governor Henry McMaster officially asks the US Treasury to release the state's $2.5 billion allocation. Todd Glover, Executive Director of MASC, continued his pleas for the state to go ahead and request the allocation of funds. He said that due to lengthy administrative and reporting processes (upwards of 90 days), it could be 2022 before these 254 cities and towns receive funding.
South Carolina is one of three states that have not requested their allocation of ARP funds.
ARP Funds & Infrastructure While the infrastructure components of the ARP monies emphasize water, sewer, and broadband, there are still opportunities for funding other capital needs, including roads.
With the ongoing infrastructure debate in Washington, EBO Director Brian Gaines noted that the legislature would need to include provisions to address impacts of any infrastructure bill passed by Congress on the ARP allocations to avoid duplicative spending. The "revenue replacement" component of the funding, which reimburses state and local governments for revenues lost due to the pandemic, seems to be the broadest category with the most flexibility when it comes to use. This category would likely be used to fund any road projects at the local and state levels.
Josh Rhodes, SCAC Deputy Executive Director & General Counsel, noted that roads continued to be a hot topic with the recent Supreme Court decision, which jeopardized local road use fees statewide. Rhodes said because of the flexibility of the "revenue replacement" funds, counties could use this to help fund road projects.
As we have previously reported, SCDOT has estimated a loss of $156 million based on the ARP formula.
Secretary of Transportation Christy Hall pitched using ARP funding to expedite the I-26/I-95 interchange project to the accelerateSC committee in June, a concept that was well received by the group. However, it is ultimately up to the legislature to determine the use of funds. SCDOT is expected to present to the ARP committee in the coming weeks.
Legislators are expected to return in late September or early October to pass legislation regarding ARP funding allocations. SCFOR will continue to follow. Stay tuned.
You can find presentations and documents from Tuesday's meeting here.
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