S Carolina budget writer: Wait to spend $2.1B COVID relief

COLUMBIA, S.C. (AP) — The Republican leader of the committee that writes South Carolina’s budget said he is waiting for more guidance before he makes any recommendations on how to spend the state’s share of $1.9 trillion in COVID-19 relief from the federal government.

South Carolina Attorney General Alan Wilson joined colleagues in 20 other states in a letter asking Treasury Secretary Janet Yellen for clarity on how the money can be spent, saying barring legislatures from using the money to cut taxes would be “breathtaking.”

Budget leaders in South Carolina have made no announcements on how they might spend the state’s $2.1 billion share of the latest federal COVID-19 relief. An additional $1.5 billion is heading directly to local governments. Officials will likely have up to three years to spend the money.

“We’re not rushing into this right now without any knowledge of what the rules of the game are,” House Ways and Means Chairman Murrell Smith said.

The state could look at tax rebates, again refilling the unemployment benefits accounts with federal money instead of charging businesses or grants for small businesses. But that depends on what the federal government says, Smith said.

“If you put it toward replenishing unemployment, is that considered a tax cut for businesses?” Smith said. “If you wanted to set up a small business grant program, is that going to be, quote, a tax cut for small business owners?”

Smith plans to create a committee later this month to look at how the state should spend its latest COVID-19 relief and more than $500 million from a settlement with the federal government over storage of plutonium at the Savannah River Site, a former nuclear weapons plant near Aiken.