Lots of CARES money will be going around Wisconsin very soon

Wanted to go over this week's release from the Legislative Fiscal Bureau on how the State of Wisconsin plans to spend its allocation of CARES money. Here is a top-line chart of where the $1.72 billion that has been set aside is going to.

As much as the WisGOP-controlled Legislature might want to veto where the funding goes to, the way the CARES Act was written, they can’t. It goes through Governor Evers’ Department of Administration and needs to be sent out by the end of the year.

The CARES Act laid out certain guidelines for the use of money received from the CRF, and additional guidance has been received from the U.S. Department of Treasury. Money that state and local governments receive from the CRF must be used for expenses incurred in response to the public health emergency declared in response to COVID-19. These expenses must not have been accounted for in the most recently passed budget, and must be incurred between March 1, 2020, and December 30, 2020. Money received from the CRF that is not used by December 30, 2020, must be returned to the Treasury. Furthermore, Treasury has issued guidance and provided answers to questions on what is and is not considered an eligible expense incurred in response to the public health emergency; notably, governments may not use the money from the CRF to replace lost revenue.

The Department of Administration (DOA) has indicated that the approximately $2.0 billion in CRF monies were deposited to a DOA federal, all monies received appropriation [s. 20.505 Page 2 (1)(mb)]. Because this appropriation is an all monies received appropriation, the administration can expend the total amount of funds received without additional legislative authorization. DOA has established a system for agencies to track the financial impact of the coronavirus public health emergency. Agencies have been asked to report any unanticipated expenses related to emergency response to the public health emergency, the financial impacts of canceling or rescheduling events, revenue lost from canceling or rescheduling planned events or from canceled or postponed state operations and services, the amount of cost savings resulting from rescheduling or canceling planned events, the financial impact of grants received or lost, and the fair market value of any donations received by a state agency from a nongovernmental source.

You can see that the largest chunks of those dollars are going to preparedness efforts for hospitals and communities, as well as COVID 19 testing and reimbursements to health providers to help them put on those tests.

There also is that $190 million to local governments and $10 million to Tribes to help them pay for certain types of costs that they take on between March 1 and October 31. The Evers Administration announced the allocations under a program called Routes to Recovery (you can see what your community is getting at this link). Here’s what that money can be used for.

….. Funds distributed to local governments under this program may be used for: (a) emergency operations activities; (b) purchases of personal protective equipment; (c) cleaning and sanitizing supplies and services; (d) temporary isolation housing; (e) testing and contact tracing costs not otherwise reimbursed by the state; (f) Family and Medical Leave Act (FMLA) and sick leave for public health and safety employees; and (g) meeting local match requirements for expenses submitted for reimbursement to the Federal Emergency Management Agency (FEMA)…..

State government has also been taking on extra costs and services due to the COVID outbreak, and some of the CARES money will go to pay that back. As the LFB notes, much of that $200 million has already been spent out.

Agency Reimbursements. As mentioned above, DOA has asked state agencies to keep a record of costs incurred due to the public health emergency related to the coronavirus. The Governor has indicated that $200 million in CRF money will be set aside to reimburse state agencies for their eligible 2020 COVID-19 expenses. As of mid-May, state agencies had incurred approximately $142 million in COVID-19 expenses. DOA has characterized these expenses as being broadly related to the purchase and distribution of personal protective equipment and cleaning and sanitizing products, tests and testing services, decontamination, contact tracing, and isolation and alternative care facility establishment and operation.

It sure seems like many of those agencies will have to dip into their own pockets as that CARES money runs out and the need to invest in changes to increase safety and lessen exposure to COVID-19 continues.

There are also $40 million that will go to hospitals to help defray losses that COVID-19 has made them take on (both from taking on extra costs to treat COVID, and from losing funds from a lack of “regular” doctor visits because people don’t want to go into offices to risk getting COVID). And more will go to other types of private health providers that have had financial stresses due to COVID-19.

Assistance for Health Providers. A total of $110 million has been allocated for providing financial assistance to health providers, including emergency medical services, home and community-based services, and long-term health providers, such as nursing facilities and assisted living facilities. Of this amount, $10 million has been set aside for providing grants to clinics serving underserved populations, including tribal federally qualified health care centers, rural health clinics, and free and low-cost clinics. The money distributed under this initiative is intended to help health providers cover expenses directly related to their COVID-19 responses, in addition to additional expenses such as overtime pay, changes to sanitation procedures, and disruption to standard care delivery.

All of this $150 million in assistance to medical providers and hospitals is supposed to go out by the end of July.

You’ll also notice some assistance that goes to non-medical, non-governmental outlets. This includes $75 million for $2,500 grants to 30,000 small businesses under WEDC’s We’re All in program, which opened for applications this week and closes on Tuesday.

I’ll be interested to see if they get enough apps, and if not, maybe they’ll add more money to each of the grants. My instinct is that giving away more than $2,500 to fewer recipients would seem to a much better bang for the buck in keeping those small businesses afloat (that advice is worth what you paid for it).

There is also $25 million that is designated for landlords to pay for $3,000 of rent and other housing, in order to help low-income Wisconsinites stay in their homes, and $65 million for the state’s beleagued agricultural sector.

…. The $50 million Wisconsin Farm Support Program will provide direct payments of $1,000 to $3,500 to farmers with gross farm income of $35,000 to $5,000,000 in 2019. Farmers will be eligible to apply from June 15, 2020, to June 29, 2020. The Department of Revenue (DOR) will administer the program by awarding payments of a percentage of applicants' 2019 gross farm income. The percentage will be calculated based on the number of applicants so that all $50 million will be allocated. DOR estimates approximately 26,500 farmers are eligible, suggesting an average payment of $1,900 per farmer if all eligible farmers apply. At the end of the first day of the application period, DOR indicated that 3,673 farmers had applied for payments from this program. The Department of Agriculture, Trade and Consumer Protection (DATCP) will administer the $15 million Food Security Initiative, which will provide payments to food banks, food pantries, and other nonprofit organizations to support the purchase, processing, and storage of Wisconsin agricultural products. Funding will also support implementation of social distancing and public health guidance at recipient organizations, such as curbside pick-up or delivery services. DATCP reports it is in the process of determining program structure and eligibility requirements for the Food Security Initiative and that additional guidance is forthcoming.

So we’ll likely see a lot of this $2 billion pay for items in Wisconsin in the coming weeks, and once that money comes out, we should track who gets it and how effectively it was used (and both the states and feds are going to report on what was done with the CARES money in the next few months).

But this $1.72 billion will likely not take care of all of the needs that have developed to deal with the pandemic, and once that money runs out this Summer, that’s when the real hard choices will begin. Not just in Wisconsin at the state and local level, but also in DC. Congress and President Trump are going to have to decide if they want to keep helping, or if they want to risk a lot of severe cutbacks in these services and a resumption of our economic decline right before the November 2020 elections.