S.C. getting $2.5B in virus relief aid

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COLUMBIA - 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, beginning 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 that the shortfall was created in large part due to the supplemental federal payments, which include an extra weekly $300 to unemployed workers.

"In many instances, these payments are greater than the worker's previous paychecks," McMaster said of his decision, akin to an earlier move by Montana Gov. Greg Gianforte. "What was intended to be a short-term financial assistance for the vulnerable and displaced during the height of the pandemic has turned into a dangerous federal entitlement, incentivizing and paying workers to stay at home rather than encouraging them to return to the workplace."

McMaster and the director of the state's jobless benefits agency planned to discuss the decision with members of the South Carolina Chamber of Commerce later Tuesday.