Thursday, August 13, 2020

An update on where Wisconsin's CARES money is going

We've had some interesting updates in what is happening with Wisconsin's allotment of money from DC that was sent to the state with the CARES Act that was signed at the end of December. This includes a rundown of where that CARES money is going from the Legislative Fiscal Bureau, which was sent to legislators earlier this week.

It's especially crucial because the state has to spend all of its CARES money in the next 4 1/2 months, and generally cannot be used for anything other than fighting COVID-19 and its social and economic effects.
The CARES Act laid out certain guidelines for the use of money received from the [Coronavirus Relief Fund], 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.
Most of that money has gone to the State of Wisconsin itself, and is able to be split up by Governor Evers without any veto power from the GOP-run Legislature.
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....

Consequently, in mid-May, 2020, the Governor's office began announcing a series of initiatives that would be funded from the state's share of federal CRF monies received under the CARES Act. To date, the CRF funds needed to fund the initiatives announced by the Governor's office have totaled $1.76 billion, with approximately $243.7 million remaining. These initiatives are summarized in the table below. Additional details on the intended purposes of the $1.76 billion in funding are also provided.

It took a few weeks for the Evers Administration to come up criteria to send out some of the grants and give businesses and localities time to apply. But much of this money has been going out in the last month, including the Small Business grants, farm supports, payments to hospitals, and purchases and distribution of PPE. I also note the $4 million in CARES money designated for the National Guard, which is being used to make up for the Trump Administration only paying 75% of the cost of the use of the Guard against COVID-19 (which I guess makes it all federal money anyway).

The Evers Administration also rolled out a new website today that lets Wisconsinites see what the CARES money is being used for in their community, and how much has been designated in total. It's got this pretty-looking breakdown of the funds.

Some of this seems to be a response from a criticism that GOPs in DC have been trying to throw recently, claiming that there isn't need for further stimulus because CARES money hasn't been getting spent. An example of this comes from something US Rep Bryan ("Paul Ryan's Chauffer") Steil sent out a couple of weeks ago.
Bryan Steil calls on Wisconsin Governor Tony Evers to clarify how Wisconsin’s nearly $2 billion allotment from the CARES Act has been spent. The most recent public data from the U.S. Treasury Department found that 3.8%, or $75 million, of Wisconsin’s nearly $2 billion CARES Act money has been spent.

“The CARES Act provided $2.2 billion for the State of Wisconsin to spend on distributing PPE, helping workers get back to their jobs, reopening schools safely, and protecting people’s health. Before Congress passes additional funding, states should first use CARES Act funds. We must know why, four months after the CARES Act became enacted, more than $2.1 billion of the $2.2 billion in funding remain unspent,” said Steil.
This theme was repeated by Our Dumb Senator today.

Steil and Johnson are not only being fiscally stupid by not wanting more stimulus in a time of double-digit unemployment and limited demand, they're also being dishonest. That's because the report Steil references is what the Treasury reported as state spending as of 3 weeks ago, and leaves out the fact that this is how the money flow from these programs works.

1. CARES Act passed in late March

2. US Treasury Dept spends weeks setting up criteria explaining what the money can/cannot be used for, and then sent it to the states in late April.

3. State finds out how much money they get, and then had to identify best use of the money, which came in just as COVID 19 cases were having their first peak and we didn't know how bad things might get, or what would be the best way to fight this thing.

4. State then has to set up criteria explaining how the money will be sent out, and to figure out who will handle these new duties. And then they need to give agencies, localities and people enough time to figure out the rules and apply.

5. Applications and reimbursements come in, they have to be evaluated.

6. Money gets sent out to the final recipients.

Well good luck having steps 3, 4, and 5 happen in 10 weeks while the state was also devising plans to control COVID-19, deal with the surge in unemployment claims, and all other everyday government activities. Unless you want to risk wasting hundreds of millions of dollars due to illegitimate expenses or private individuals and businesses who try to defraud the state.

But that's the type of cynicism you have when in today's GOP, when they're willing to pay any price to bail out corporations and give tax cuts to the rich and corporate, but God forbid we use our deficit to spend money to help anyone else that's in need during these tough times.

And given that (mo)Ron Johnson, Moscow Mitch and the rest of the Senate GOP have now decided to go home for the next month instead of do anything to stabilize the economy, it seems wise that Evers held back the last $243.7 million of CARES funds for the time being. Because with unemployment and COVID cases staying high with no extra money coming from DC, this state is going to need to find all the sources of money that they can to keep a lot of Wisconsinites from being left destitute for the rest of 2020.

No comments:

Post a Comment