Governor Kristi Noem’s administration recently rejected more than $70 million in federal funds intended for energy efficiency and environmental programs, according to the state’s top budget official.
The Home Energy Rebates program would have given South Dakota $69 million to provide residents with rebates for energy-efficient home upgrades and appliances. The state missed the deadline to participate, having earlier turned down $1.8 million to help set up the program.
Kelly Moore, a consumer advocate from Piedmont, had hoped to use the rebate for a new heat pump. South Dakotans will see no direct return on their federal taxes, she said. Other states will benefit from our contributions.
During a July 30 legislative budget committee meeting, Bureau of Finance and Management Commissioner Jim Terwilliger explained the decision. He cited administrative challenges, limited staff, and policy disagreements as reasons for turning down the funds. “These are federal taxpayer dollars,” Terwilliger said. “We just don’t believe that it’s the right thing for South Dakota.”
The funding came from the 2022 federal Inflation Reduction Act, which the Biden administration called the most significant action by Congress to address climate change. Some lawmakers on the budget committee disagreed with the decision, saying the funds could have helped South Dakotans.
Other Declined Programs
Terwilliger also mentioned that the state declined money from the federal **Fenceline Monitoring** program, which would have provided $406,000 to monitor air quality around industrial areas. The state also passed up its share of $1 billion allocated for adopting the latest building energy codes, which could have significantly reduced the state’s carbon emissions and saved consumers money over time.
Additionally, the administration turned down the **Climate Pollution Reduction grants** program, which allocated $5 billion for states to reduce greenhouse gas emissions. Rapid City applied for and received a planning grant but was not awarded further funds. Sioux Falls declined to apply.
Terwilliger said the one-time federal funds would lead to long-term financial commitments for the state once the federal money ran out. He also expressed general disagreement with the policies promoted by these programs.
Some Republican lawmakers supported the decision, arguing that these are taxpayer dollars that shouldn’t be taken lightly. However, others, like Rep. Linda Duba, expressed concern that declining the funds would negatively impact residents, particularly those facing rising energy costs and severe weather events.
Accepted Federal Funds
Despite declining these funds, the state did participate in the **Forest Legacy Program**, securing $1.5 million to purchase a 250-acre parcel along the Big Sioux River. Sioux Falls also successfully applied for $3 million under the Urban and Community Forestry Program, with another $600,000 going to other communities across the state.
Governor Noem has previously rejected federal funds, including money to feed low-income kids during the summer, support solar energy projects, and provide extra unemployment benefits during the pandemic.