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South Carolina state flag

(The Center Square) – South Carolina’s 254 municipalities with populations under 50,000 were allocated $435 million collectively when the American Rescue Plan Act (ARPA) was adopted in March.

Towns and small cities across the state have seen little of that allocation manifest as actual money in their coffers, however, because the state must request the money on municipalities’ behalf under U.S. Treasury rules.

Gov. Henry McMaster has not done so, and his office said the governor won’t until he submits his executive budget request for September’s General Assembly special session, which will draw lawmakers back to Columbia to allocate more than $3.1 billion in one-time funding.

Municipal Association of South Carolina (MASC) Executive Director Todd Glover has called on the governor twice this month to green-light the funding to allow local officials to move forward with stymied plans.

Glover told the inaugural meeting of the House SRS/ARPA Appropriations Ad Hoc Committee this week that the longer local governments wait for “once-in-a-generation-type funding,” the more expensive earmarked projects become.

Both General Assembly chambers have established SRS/ARPA appropriations ad hoc committees to study and recommend how to best allocate $600 billion Savannah River Site (SRS) plutonium settlement and $2.5 billion in federal pandemic assistance the state will receive via the American Rescue Plan Act (ARPA).

The “unprecedented” $3.1 billion plug in one-time money under the General Assembly’s purview does not include the $2.94 billion under ARPA and other federal aid programs being allocated to South Carolina’s 79 public school districts.

South Carolina counties are set to receive about $1 billion under the ARPA, the state's 17 largest cities are to receive $191 million and under-50,000 municipalities are to get $435 million.

Glover told the House panel the state and the 17 larger cities that could request funding directly from the federal government did so and are putting it to use while small towns must wait for the governor to act.

“I find that a bit troubling,” committee member Rep. Gilda Cobb-Hunter, D-Orangeburg, said. “What we need to be trying to figure out, in my opinion, is how we are going to spend our state portion, and we need to respect local government.”

Tuesday’s initial gathering was an “organizational meeting” of the House SRS/ARPA Appropriations Ad Hoc Committee. Chair Rep. Bruce Bannister, R-Greenville, said no decisions were going to be made.

The object of the day, Bannister said, was to “get our thoughts together” in how to proceed with spending $3.1 billion.

“This is going to be a fairly in-depth process,” he said.

The House SRS/ARPA Appropriations Ad Hoc Committee next meets Tuesday in Columbia. The Senate’s ad hoc panel, chaired by Sen. Thomas Alexander, R-Walhalla, met Aug. 6 but has not scheduled hearings since.

The state and local governments have until the end of 2024 to spend the coronavirus relief money, in most cases.

According to the Palmetto Promise Institute, a Columbia-based taxpayers advocacy nonprofit, the state, local governments and school districts are collecting about $5.2 billion in one-time allocations.

In a May 27 analysis, Palmetto Promise recommended South Carolina bank $1.3 billion.

Palmetto Promise recommended lawmakers “hold non-recurring funds in reserve, and fill rainy day funds. The General Assembly should also freeze spending at the level adopted only a few months ago to allow for a rebate to taxpayers or a reduction in our 7% personal income tax top rate.”

Other suggestions:

• Funds should not be used for recurring expenses;

• Create a joint Senate-House ARPA legislative oversight panel;

• Cut taxes.