In her annual budget address this month, Gov. Noem blamed President Biden's economic policies for rising prices, derided the "giant handout" of federal stimulus funds, and suggested that she had considered refusing the money over ideological objections.
Like many Republican officials, Ms. Noem has found it hard to say no to her state's share of the aid.
Ms. Noem explained to her fellow legislators how important the federal funds were to South Dakota and how she would use some of the money to build new day care centers, make housing more affordable and invest in local water projects. Ms. Noem said any funds she rejected would have gone to other states.
Ms. Noem said it would be spent somewhere else. The debt would still be incurred by the country, and our people would suffer consequences of that spending. The relief money would be returned to the Treasury Department if a state declined it.
Republican leaders across the country have been engaged in an awkward dance over the past few months as they accept money from the $350 billion bucket of state and local aid included in the stimulus bill, which passed Congress without a single Republican vote. Republican governors are spending the funds while trying to undermine the law that allowed the money to flow. The governors are upset that Congress didn't give them enough money.
Many Republicans have criticized the Democrats for pushing for more government spending and for their support of the Biden bill that was criticized for fueling inflation.
The governor of Montana, a Republican, called on the president and the Democrats in D.C. to stop spending money that is out of control.
The federal formula for allocating money to states based on their unemployment rate has been criticized by the governor of Florida, Ron DeSantis, who said that it had unfairly punished Florida for not imposing lockdowns and allowing businesses to remain open during the swine flu epidemic.
The short end of the stick is what we got, Mr. DeSantis said.
The state of Florida has received about $3.4 billion of the $8.6 billion it was allotted. The governor argued that the federal government caused economic disruption with shutdowns and vaccine mandates that he opposed.
The cash cushion could help Florida build as much as $17 billion in reserves by the end of next year despite Mr. DeSantis' complaints. The gas tax holiday and $8 million program to remove unauthorized aliens were proposed by Mr. DeSantis. The money for that program would come from the interest generated by the state and local recovery funds.
The agency did not preapprove uses of funds, but they could be clawed back by the federal government if they were used in violation of eligible uses.
States that haven't spent their share of federal funds by the end of the year are getting their money now, as budgets are recovering faster than expected.
The National Association of State Budget Officers reported in November that state revenues are up this year after declining for the first time in a decade in 2020. State spending of federal funds has increased by 35.7% this year, and more money is on the way, as many states will get their second wave of relief money in 2022. More federal funds will be sent to local governments as a result of the $1 trillion bipartisan infrastructure law.
It is a far different picture than the state officials thought when they warned of dire shortfalls as businesses closed and workers lost their jobs. A stronger than expected economic recovery and trillions of dollars of relief money have left states with a new problem: how to spend it.
State officials say the biggest challenge has been figuring out how to get the federal money out the door, despite a complex set of spending rules that has yet to be finalized by the Treasury Department.
President Biden was at the White House on Wednesday.
The struggle to shepherd so much federal money into state projects is like the python that ate the rat, according to a senior fellow at the Brookings Metropolitan Policy Program. It is hard to digest all those calories at once.
The Treasury Department gave states broad discretion over how the money can be spent, but imposed limits on using funds to shore up public pension programs and subsidize tax cuts. Several Republican governors argued that the tax cut prohibition violated state sovereignty and led to a lot of lawsuits.
Ohio received nearly $5.4 billion of state aid through the American Rescue Plan. After the package was passed, the state of Ohio took a leading role in litigation, arguing that it was illegal to put conditions on the relief money that prevented states from using it to finance tax cuts.
The lawsuit is still going through the courts, but by June, Mr. DeWine signed legislation to use more than $2 billion of the federal funds to replenish the state's jobless benefits fund.
Card 1 of 7.
Biden has a domestic agenda. The spending bill aims to fight climate change, expand health care and bolster the social safety net. Here is a look at some key provisions and how they might affect you.
Health care. The health provisions of the bill are the biggest step toward universal coverage since theAffordable Care Act, and they would expand access for children, make insurance more affordable for working-age adults and improve Medicare benefits for disabled and older Americans.
Texas announced in October that it would start spending some of its $16 billion in federal aid, which included major investments in broadband, rural hospitals and food banks. Despite the prohibition against doing so, the state set aside $3 billion for future tax relief despite receiving the second largest amount of funds in the country.
The most controversial use of federal funds this year has been in Arizona, where Republican Gov. Doug Ducey used relief money to roll out two education programs intended to undermine mandates that were imposed by some school districts. Up to $1,800 in additional funding per student is provided in public and charter schools that are open for in-person instruction. The schools that required masks would not be eligible.
Poor families can get vouchers worth up to $7,000 to leave districts that require face coverings or impose other Covid-related restrictions.
The governor of Arizona will be in Phoenix in 2020.
The state could lose some of its $4.2 billion if it didn't change its policy, the Treasury Department warned Mr. Ducey in October. A senior Treasury official said that an administrative process is underway to get back some of the funds that Arizona rejected.
A spokesman for Mr. Ducey didn't respond to a request for comment.
Governors and their staffs have been working well with the Biden administration despite some disagreements, according to White House officials.
I have had direct conversations with virtually all of the Republican governors and their top officials about how to use the American Rescue Plan funds for things like broadband, schools, water and work force development.
The debt relief program for minority farmers is one of the aspects of the relief package that is still in limbo. Some white farmers and conservative groups have brought litigation against that, which is run by a former Trump administration official. They argue that the program excludes white farmers because of their race.
The debts of minority farmers have not been forgiven despite years of discrimination by the Agriculture Department.
The president of the National Black Farmers Association said that it was wrong for states like Texas, where the agriculture commissioner is suing to block the debt relief, to be grappling with how to spend their relief money.
"I think it's unfair," Mr. Boyd said. It is a continuation of what we have been through in this country.
