State Strings Tie Up COVID Funding

By John Meng Managing, Editor     American political satirist and journalist P.J. O’Rourke once said that it takes enormous effort and elaborate planning for the government to waste so much money. However, when it comes to the Coronavirus Relief Fund (CRF), it seems that it’s taking very little effort at all.     

According to Texas 2036, a non-partisan nonprofit organization, has published a report than Texas has only distributed 20 percent of the more than $11 billion dollars it received from the Federal government which was meant to be allocated to cities and counties across the state.     

With only 14 weeks remaining before the expenditure deadline, billions of dollars may never be provided to Jackson County and other rural areas.     

Among the many funding streams in the CARES Act, Texas state and local governments received $11.24 billion via the Coronavirus Relief Fund but most of the relief funds were delivered to Austin for distribution. Texas’ CRF allocation was split into three main categories: $3.2 billion allocated directly to cities and counties with populations greater than 500,000; $1.85 billion allocated to the state, available for use by cities and counties with populations less than 500,000; and $6.18 billion allocated to the state for state use.             

The CARES Act and subsequent Treasury guidance have provided broad guidance regarding allowable uses for CRF funds. As a general rule, the CRF may be spent on “necessary expenditures incurred due to the public health emergency” that were not accounted for in pre-pandemic budgets and were incurred between March 1, 2020 and Dec. 30, 2020.     

However, with just 14 weeks to go before the expenditure deadline, much of the CRF remains unspent. As of June 30, only 16.6 percent of the money for larger cities and counties had been expended. And as of Aug. 31, 2020, only 20 percent of the funds reserved for the other two categories – smaller cities and counties and the state – had been utilized.     

Texas State Rep. Phil Stephenson (R-District 85) representing Jackson, Wharton, and Fort Bend counties, expressed that he was very troubled by the situation.     

“The restrictions on the Coronavirus Relief Fund came from the Executive branch. I did not have an opportunity for an up or down vote in any capacity as the legislature is not in session. I am very upset that the legislature has had no say in this process, as are many of my colleagues in the Texas House,” said Rep. Stephenson. “We are working with Austin to try and create some flexibility with both the deadline and restrictions so schools and small businesses in smaller counties can access these funds like the larger counties have.     

“Should Jackson County or any other county in my district need assistance navigating through the confusion associated with accessing these funds, please contact my Rosenberg District Office (281-232-7900). We will do everything in our power to help,” he said.   

In May, the Texas Department of Emergency Management (TDEM) announced an initial allocation of $116.9 million as an “advance” to cities and counties with populations below 500,000, such as Jackson County. Subsequent distributions would occur on a cost-reimbursement basis as cities and counties expended money on pandemic response beyond the initial advance. However, as of Sept. 22, only $106.8 million of the $1.85 billion available had been provided to these small and mid-sized communities, with the balance remaining in the state treasury.     

Some communities have reported difficulties fronting expenditures and accessing funds already promised to them. Jackson County is among them.     

“Jackson County was allotted a little more than $340,000 in CARES Act funds to utilize in response to COVID-19.  We have received only around $70,000 and have until Dec. 31, 2020 to make a claim for the additional funds we were allocated,” said Jackson County Judge Jill Sklar. “Although we have incurred and continue to incur expenses related to COVID-19, we are being severely restricted by the State on how we can utilize the $340,000 that we were guaranteed.”       

Sklar explained that the State has attached certain strings for funds to be used in the smaller communities which were never part of the original CARES Act and which are not in place for the larger cities. For example, for every dollar that is spent, 75 percent must be utilized for medical expenses, public health expenses, and payroll expenses for public safety, public health, health care, human services, and similar employees whose services are substantially dedicated to mitigating or responding to the COVID-19 public health emergency.     

 “As a whole, Jackson County has been fortunate in that we have not had an exorbitant amount of funds spent in this category,” said Sklar. “What we did spend, the auditor’s office has worked diligently to recapture for reimbursement and we currently have around $45,000 that we believe will be able to be reimbursed.       

Sklar stated that per the state’s improvised rules the other 25 percent category can be spent on actions which facilitate compliance with COVID-19 related public health measures. This 25 percent category is where Jackson County will continue to see a rise in cost for government services, and unfortunately, 25 percent of those funds will result in the county only receiving about $15,000 in reimbursement.       

“This whole process has been extremely complicated, frustrating, and the rules tend to change quickly and often,” exclaimed Sklar. “It appears that the urban and suburban areas received much more money and have been given the freedom to spend their money with little restrictions. Although we have expenses that qualify under the CARES Act, the State is telling us ‘no’ because it doesn’t fit into their formula.   

 “If the rules don’t change, we will most likely not get the remaining 80 percent and may even have to return a portion of the $70,000 that we have already received. I have expressed my concerns with State leaders and have been adamant that something has got to change.       

“My ultimate fear is that the money which was allocated to Jackson County will NOT be returned to the federal government to repay a portion of the debt that they have created, and instead it will be redistributed to the larger jurisdictions or even other states with the freedom to spend the money as they wish.”