COLUMBIA, S.C. (AP) — State and local governments in South Carolina are getting nearly $2.5 billion in new federal coronavirus aid, as the state begins to phase out a different federal jobless benefit the governor says is disincentivizing people to return to the workplace.
The funds announced this week are part of a $350 billion allocation being distributed to state and local governments, a piece of President Joe Biden’s larger $1.9 trillion coronavirus relief package that became law in March.
All of South Carolina's 46 counties and some cities will get the money, which could soon begin arriving in state and local hands, according to the White House.
Treasury Department guidance listed broad categories for spending the funds, like public health costs, or offsetting harm from the downturn to workers, small businesses and affected industries. Money can also replace lost public sector revenues and be invested in water, sewer and broadband internet.
But the Treasury Department has also placed restrictions, including a prohibition on using the money to cut taxes, pay down debt or bolster reserve funds.
The distribution comes as South Carolina phases out its participation in another federal coronavirus aid component. Last week, Gov. Henry McMaster announced that, starting June 30, South Carolina will opt out of the federal unemployment programs that have been providing extra money to jobless residents, in light of “unprecedented” workforce shortages across the state.
With more than 80,000 job openings and a labor shortage affecting all areas of the state’s economy, McMaster argued last week that the shortfall was created in large part due to the supplemental federal payments, which include an extra weekly $300 to unemployed workers.
During an online meeting Tuesday with the director of the state’s jobless benefits agency and members of the South Carolina Chamber of Commerce, McMaster noted other governors, including Montana Gov. Greg Gianforte, have taken similar action on unemployment assistance.
The governor also said he saw the state as well-positioned to return to its pre-pandemic economic vibrance, particularly if businesses in the multibillion dollar tourism industry can staff up in time for the burgeoning summer tourist season. That is a task he said would be assisted by removing the unemployment benefit.
“All things considered, it looks like the threat is much less than it was before,” McMaster said, enumerating increasing numbers of South Carolinians who have already been vaccinated against the coronavirus. “And at the same time, we know that these employment benefits — which were very generous and, I think, were good and purposeful at the beginning — have now seemingly turned into an entitlement. ... I have a very positive, happy outlook about the future right now, and the way we're going.”
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