WASHINGTON -- At her annual budget address this month, Gov. Kristi Noem of South Dakota blamed President Joe 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.
But like many Republican officials, Noem has found it hard to say no to her state's share of the $1.9 trillion pandemic relief aid that Democrats passed along party lines in March.
Noem explained to fellow legislators how critical those federal funds were to South Dakota and outlined how she would use some of the nearly $1 billion slated for her state to invest in local water projects, make housing more affordable and build new day care centers. For those questioning her choice to take the money, Noem, who has opposed covid restrictions including shutdowns and mask mandates, said any pandemic relief funds she rejected would have just gone to other states.
"It would be spent somewhere other than South Dakota," Noem said. "The debt would still be incurred by the country, and our people would still suffer the consequences of that spending."
No state has declined the relief money. If they had, it would go back to the Treasury Department, not to other states.
Republican leaders across the country have been engaged in a similarly awkward dance over the past few months as they accept -- and often champion -- money from the $350 billion bucket of state and local aid included in the stimulus bill, which passed Congress without a single Republican vote.
In some states, like Ohio and Arizona, Republican governors are spending the funds while attempting to undercut the law that allowed the money to flow. Other governors are faulting Congress for not giving their state enough money.
And, like their counterparts in Congress, many Republicans have blasted Biden's stimulus bill for fueling inflation, even as they take the funds, and criticized Democrats for pushing for additional government spending plans.
"I urge President Biden and Democrats in D.C. to turn off the spigot of out-of-control spending and get inflation under control," said Gov. Greg Gianforte of Montana, whose state has used some of its $906 million in stimulus money to invest in nursing homes and return-to-work bonuses.
Florida Gov. Ron DeSantis complained last week that the federal formula for allocating money to states based on their jobless rate had essentially penalized Florida for not imposing lockdowns and allowing businesses to remain open during the pandemic.
"I think you'd have to acknowledge that we got the short end of the stick compared to these other states," DeSantis said.
Florida, which was allotted a total of $8.8 billion, has received about $3.4 billion -- which DeSantis said would go toward infrastructure, transportation and workforce retention. The governor justified keeping the money by arguing that the federal government fueled economic disruption with shutdowns and vaccine and mask mandates that he opposed.
Despite his complaints, the cash cushion could help Florida build as much as $17 billion in reserves by the end of next year, according to DeSantis, and allow the state to afford to pay for priorities unrelated to the pandemic. DeSantis proposed a gas tax holiday and an $8 million program to remove "unauthorized aliens" from the state. The money would come from the interest generated by the state and local recovery funds, a spokesperson for DeSantis said.
A Treasury spokesperson said the agency did not preapprove uses of funds but that any money used "in violation of eligible uses" of Treasury's rules could be clawed back by the federal government.
States, which have until 2026 to spend the stimulus money, are getting their share of federal funds at a moment when budgets are recovering faster than expected, with many governments awash in cash and announcing large surpluses.
A November expenditure report from the National Association of State Budget Officers found that state revenue is up 12.8% this year after declining in 2020 for the first time in a decade. State spending of federal funds has surged by 35.7% this year.
More money is on the way, as many states will get their second tranche of relief money in 2022. The recent passage of the $1 trillion bipartisan infrastructure law will also send more federal funds to local governments.