S.D. Attorney General says daycare grants aren't ready, state treasurer cuts checks anyway

PIERRE — South Dakota treasurer Josh Haeder has authorized $32 million in day care relief funds through the Department of Social Services despite the state's attorney general opining that the stimulus program hasn't gotten proper approval.

Haeder told the Argus Leader on Thursday afternoon that he had ordered the release of $32 million into a state bank account, which about 600 childcare stabilization grants will be drawn from, shortly before 4 p.m.

Funds are expected to arrive into grant recipients bank accounts as soon as Friday.

The development comes after Attorney General Jason Ravnsborg issued a memorandum to the treasurer, as well as State Auditor Rich Sattgast and House Appropriations Chair Chris Karr, R-Sioux Falls, stating that the $32 million marked for the first-round of childcare stabilization grants as well as about $70 million more received by DSS through the American Rescue Plan Act last year first needed Legislative approval before being disbursed.

List: See day care facilities that have received grants

However, Haeder said after a thorough review of all applicable state laws as well as the state Constitution, it was deemed DSS had the necessary authority to spend the dollars.

“The funds at one point were under review once we received the Attorney General’s memorandum," he said. "We cautiously took our time to make sure we made the right decision as there is a disagreement between members of the legislature, governor and attorney general's office.

Ultimately, we decided the best course of action was to release the funds because the memorandum was not an official one,” Haeder added.

Gov. Noem, House remain at odds

The confusion surrounding the issuance of the payments stems from a dispute between the governor's office and some members of the State House, who are supported by the attorney General.

They contend that because the ARPA dollars came to the state after the current fiscal year's budget was set last March, a new appropriation is required. And that takes approval from both the chambers of the Legislature as well as the governor's office.

"While SDCL 4-8-17 gives the governor authority to accept federal funds on the state's behalf, SDCL 4-8B-10 limits that authority to the administration and supervision of the expenditure of only those funds that have been appropriated through an appropriations act of the Legislature, or expenditure of those funds that have been deemed appropriated by the interim appropriations committee," reads the 7-page memorandum signed by Ravnsborg and delivered to Haeder, Sattgast and Karr Thursday afternoon.

But the governor's general counsel and interim chief of staff, Mark Miller, told the Argus Leader that the memorandum was "hastily concocted," "carries no legal weight" and includes no analysis of the argument being made by DSS and the governor's office. And that's that ARPA dollars specific to daycare grants fall under the federal spending authority provided to DSS during the 2021 Legislative Session.

Under Senate Bill 195, adopted last spring, DSS was authorized to spend $653 million in federal dollars. But because DSS has only spent about $455 million of those dollars, the administration's position is that there's room within last year's budget to incorporate the $100 million in new daycare funds sent to the state through ARPA since SB 195's passage, Miller said.

And that's the case Noem made to reporters Thursday morning as well.

"I already have the authority," Noem said. "They gave me the authority last year in last year's budget to do this program."

Earlier: Gov. Kristi Noem sending daycare checks out now, not waiting for Legislative approval

That stance is supported by Sattgast, Haeder and the state Senate, which adopted a resolution of support for the administration's position Wednesday.

But with the support of the Attorney General, some House Republicans who interpret the law differently continue to say ARPA funds are "extraordinary in nature" and require a special appropriation.

Noem says 'no confidence' in AG

The DSS did not immediately respond to request for comment Thursday, however the governor issued a swift critique of both the opinion and Ravnsborg's competency as South Dakota's top prosecutor.

More: House Judiciary committee passes bill protecting parents’ rights in education

“Like most South Dakotans, I have no confidence in the attorney general or his judgment," she said in a statement. "He cannot be considered unbiased when asked to offer an opinion by the very same house members who are currently considering his impeachment. Just yesterday, the Senate unanimously supported DSS’s authority to send these grants, which is also consistent with longstanding practice.

"This wrongly-reasoned memo from Jason Ravnsborg doesn’t get the basic facts right and doesn’t change anything."

This article originally appeared on Sioux Falls Argus Leader: S.D. Attorney General says daycare grants aren't ready, state proceeds