- Associated Press - Saturday, May 24, 2014

PIERRE, S.D. (AP) - A new state economic development effort doled out more than $7 million in grants and loans in its first year, though some lawmakers want to revisit how the money is distributed.

The 2013 Legislature established the Building South Dakota fund as a way to eliminate some of the debate about how to use unclaimed property dollars on housing, education and infrastructure projects.

It feeds money into five different “buckets,” as legislators call them, with a different goals and managers. Here’s a look at the five funds, 11 months after the policy’s inauguration:


The program has awarded $3.5 million to 38 projects, including several to chapters of Habitat for Humanity.

The housing fund is managed by the state’s Housing Development Authority, which usually supports projects with federal money that serve low-income people.

Lorraine Polak, director of rental housing development, said money from Building South Dakota has helped people with moderate income find housing and cover other needs, such as homelessness prevention, down payment assistance and rehabilitation of old properties.

“It’s a nice opportunity to address the housing issues that we’ve seen through the years,” Polak said. “Since it’s not federal funds, we do have more flexibility.”


South Dakota schools will use $2.1 million from Building South Dakota on programs for English language learners in this first year. Department of Education officials expect to use $2 million next year.

Much of the money goes to schools in Sioux Falls and Aberdeen. The Huron School District has also seen an influx of students with limited English proficiency.

Beginning in 2015, the department will likely expand the use of this bucket and begin distributing grants to career and technical education programs and send additional funds directly to schools.


The Revolving Economic Development Initiative has been active since the 1980s. It receives a boost now of 5 percent from the Building South Dakota distribution for projects under $20 million. Board members award low-interest loans to startup companies and expanding businesses to promote job creation.


Just over $1.1 million has gone to six local projects, according to public records from the Board of Economic Development. The fund is managed by the same board as REDI and economic development partnership funds.


The fund is dedicated to local development corporations that often operate on volunteer power, said Travis Dovre, assistant finance director for the Governor’s Office of Economic Development.

The fund made about $630,000 in awards to 12 entities in its first year.

Yankton Rep. Bernie Hunhoff, the Democrat Minority Leader said some of his constituents have been frustrated at how slowly this fund has developed, which Dovre acknowledged.

“Nobody wanted to come out and define some hard and fast parameters before we saw the applications,” he said.

Though the Building South Dakota program is a “landmark” project, Hunhoff said he hopes to refigure the program’s future funding before the first $30 million is distributed over the next three years.

During the session, he and other Democrats said they want to ensure future funding with a simple formula, while Republicans developed a more complicated system that prioritizes the state’s rainy day fund.

Senate President Pro Tempore Corey Brown, a Republican from Gettysburg, helped develop the new funding formula and agreed that the program should be reviewed regularly.

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