Rounds Introduces Legislation to Provide State Flexibility in Using CARES Act Funds

WASHINGTON – U.S. Sen. Mike Rounds (R-S.D.) has introduced legislation to improve flexibility for state, local and tribal governments in using existing COVID-19 relief funds. The legislation permits up to 25 percent of funds already allocated to local governments through the Coronavirus Aid, Relief and Economic Security (CARES) Act to cover lost tax revenue. State, local and tribal tax revenues fund vital services such as education, local law enforcement, fire departments, road construction and Medicaid services.

“Every sector of our economy has been impacted by the COVID-19 pandemic,” said Rounds. “By allowing states to use part of their previously-appropriated COVID-19 relief funds to recoup lost state, local and tribal tax revenue, we lessen the chance that South Dakota communities will have to make difficult decisions to raise taxes or cut essential services – such as education and road repair – in the future. We should not provide any additional funds to bail out states who have spent recklessly. My approach would give our local governments greater flexibility to use existing funds to weather the unprecedented COVID-19 crisis – without spending new money.”

“For weeks, I’ve been working with President Trump, Senator Rounds, Leader McConnell, Secretary Mnuchin, and others to get South Dakota the flexibility we need to fight COVID-19,” said Governor Kristi Noem (R-S.D.). “South Dakota is a fiscally responsible state, but COVID-19 has hit our state sales tax revenues hard. Senator Rounds’ bill will give us the flexibility we need without bailing out fiscally irresponsible states.”

The CARES Act established the $150 billion Coronavirus Relief Fund to help state, local and tribal governments respond to the coronavirus pandemic.  South Dakota received $1.25 billion from this allocation.

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