$2 billion? Is that enough for Wisconsin to deal with coronavirus?

Now that the stimulus/stabilization bill has been signed into law, what is Wisconsin's state government able to do with their share of the funds?

The Legislative Fiscal Bureau ran down what the state might get from the Feds. And it looks like the biggest-ticket item involves a grant that goes to all states to help deal with the extra costs that are a result of the coronavirus outbreak.

The bill would create a Coronavirus Relief Fund and appropriate a total of $150 billion to state, local, and Tribal governments. Of that amount, $3 billion is reserved for the District of Columbia, Puerto Rico, the US Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa. A further $8 billion would be reserved for Tribal governments, and the remainder of the appropriation ($139 billion) is to be distributed among state and local governments according to population. The money is to be distributed no later than 30 days after the date of enactment.

The bill specifies that the funds are only to be used for necessary expenditures incurred in response to the public health emergency, which were not accounted for in the government's most recent budget, and were incurred between March 1 and December 30, 2020.

So basically anything that goes beyond what was previously set aside for disease outbreaks. Given that we didn't have all that much set aside at either the state or federal levels, I'd imagine that ends up being about all the costs that go into treating COVID 19.

So how much are we getting in Wisconsin?

For the purposes of aid distribution, population figures are to be determined based on the most recent figures available from the U.S. Census Bureau. As of the date of the bill's likely enactment, these figures would be the 2019 population estimates. The bill specifies that a local unit of government, defined as a unit of government below the state level with a population of at least 500,000, may receive a payment directly from the Secretary of Treasury if it submits a certification. However, the bill would limit the total amount of funds that these local units of government could receive to 45% of the state's total funding provided from the coronavirus relief fund. These local units of government would receive a payment equal to their share of the state's population multiplied by the 45% of state funding amount. To receive the funding, the chief executive of the local unit of government must submit a signed certification that the local government's proposed use of the funds meet the necessary public health emergency expenditure requirements described above. The amount of the payment received by the local unit of government would be subtracted from the total amount of the payment made to the state government.

Based on its 2019 population, the state of Wisconsin could receive an estimated $2,258 million in federal funds. Wisconsin has three units of local government which have populations of greater than 500,000: the City of Milwaukee, Milwaukee County, and Dane County. Based on those governments' share of the total population of Wisconsin, the City of Milwaukee could receive an estimated $102.7 million, Milwaukee County could receive an estimated $164.5 million, and Dane County could receive an estimated $93.4 million. In total, this amounts to $360.6 million, or approximately 16% of the state's total estimated federal aid amount. The rest of the federal funds ($1,897.4 million) would be available to the state government.

For Dane and Milwaukee Counties, this will likely supplement measures that their local health and social services departments are already taking on, and could also be used to buy supplies for hospitals or other medically-related needs. Given that these two counties are taking on the largest number of COVID 19 cases in the state, and that they have the highest number of local hospitals providing coverage for those afflicted, more money will likely be necessary from local taxpayers in order to keep up with the increasing caseload.

On the state side, $1.9 billion is certainly a lot of money, but it's worth noting that Wisconsin's Department of Health Services is slated to spend a total of $26 billion in this current biennial budget, so $2.26 billion is a boost of less than 7.3%. I'm guessing the costs to treat Wisconsinites that have COVID 19 and the large number of Wisconsinites that will be headed to Medicaid due to layoffs will increase expenses by a lot more than 7.3% over what was expected.

But we'll likely not deal with the concern of coming up with the rest of the money until next year. The question for Spring 2020 is "what do you do with this money, and what CAN you do with the money?" And the LFB admits some of this is going to have to be sorted out in the coming weeks.

The following issues related to the coronavirus relief fund requirements may need further guidance: (a) whether states may use relief fund payments to fill in revenue gaps caused by slowing state revenues as a result of the public health emergency; (b) whether the federal funds will be all owed to be used to reimburse costs incurred in addressing the coronavirus public health emergency that were made after March 1, 2020, but prior to the bill's enactment; and (c) whether a state can use the funds provided to the state to cover eligible expenditures of local governments that do not exceed 500,000 in population.

And so I can certainly see a fight developing in the coming weeks as to how to use the money, and whether the GOP-run Legislature tries to take actions to change what the Evers Administration wants to do with the extra funding from DC.

These changes in spending needs and federal funding is shocking, and it's going to take a while for us to know and comprehend just how much we have and how much we need in order to try to keep things from getting more out of hand in the next few months. And while this block grant helps the state some, I fear it is not nearly going to be enough to handle the higher expenses and lower revenues that will result from the economic bomb that has been dropped as a result of COVID 19.