New federal relief bill gives state more time to spend millions

New federal relief bill gives state more time to spend millions

By MARY SELL, Alabama Daily News

In its passage this week of a $900 billion COVID-19 relief package, Congress extended by a year states’ Dec. 30 deadlines for spending money allocated under the previous CARES Act. 

Alabama still has hundreds of millions of dollars left to spend from the $1.7 billion it was awarded in the spring and several state leaders had requested a spending extension while also making contingency plans for allowable, last-minute usage. 

Congress on Monday sent the long-sought proposal to President Donald Trump, who after originally saying he would sign the bill, threatened late Tuesday to veto it saying that $600 direct payments to most Americans is not enough. Because lawmakers linked the pandemic relief bill to an overarching funding measure, the government would shut down on Dec. 29.

If a deal is reached and signed by the end of next week and it includes the deadline extension, it will give state leaders time to regroup on further spending plans for the money awarded earlier this year.

“I think that does open up a great deal more opportunities than what we had,” Sen. Greg Albritton, R-Range, told Alabama Daily News early Tuesday. “And we don’t know precisely how we’re going to deal with that right now, but I can tell you that that’s under discussion that has been a discussion for the past couple of days in preparation for this.”

Albritton said he’s not ready to publicly discuss potential priorities, but expected a meeting of a group of legislators soon. A spokesperson for Alabama Finance Director Kelly Butler said the office was assessing the bill passed Monday.

“The legislative leadership will be meeting to discuss the changes in the CARES Act funding, but additional clarification from the Department of Treasury will be necessary,” Speaker of the House Mac McCutcheon, R-Monrovia, told Alabama Daily News.

Sen. Greg Reed, recently selected by his GOP colleagues to become the Senate President Pro Tem next year, said Tuesday it was good to hear that Congress has approved additional resources to fight the COVID-19 pandemic.

“I am also glad to hear that the bill included an extension for states to spend federally appropriated COVID-19 funds,” Reed, R-Jasper, said. “This flexibility will be important to the people of Alabama, our health care workers, and all of those on the front lines fighting the spread of this virus as our state works to give Alabama the support it needs.” 

The CARES Act was approved by Congress in March. In late May, state lawmakers and Gov. Ivey eventually agreed on a distribution plan to various state agencies, organizations and in some cases, individuals. Around the Capitol, those have been called “buckets.”

Some of the bigger buckets were: $125 million for Alabama counties; $125 million for municipalities; $100 million for remote learning devices for education institutions; 

As of early this week, $1.27 billion of the state’s $1.78 billion had been spent, leaving $509 million “unexpended,” according to a dashboard updated by the Department of Finance. But because many programs and entities are being reimbursed for COVID-related expenses, more money is going out everyday.

That distribution plan approved in May allows Ivey to change the flow of funds with the unanimous approval of six top lawmakers: the Speaker of the House, the Senate President Pro Tem and the four budget chairmen. The full Legislature does not need to approve the changes.

In September, Ivey and lawmakers dedicated $300 million to unemployment benefit costs in an effort to avoid a significant increase in the tax paid by employers. But even with that infusion, businesses are expected to be taxed more to replenish the fund. The state’s unemployment insurance benefits trust fund is supported by a tax on employers. Butler and lawmakers have said more could be transferred to unemployment.

“I think we could put another $287 million in the unemployment insurance fund,” said Rep. Steve Clouse. chairman of the House General Fund committee. He said it’s a priority to keep businesses from having to pay an increased unemployment tax.

He estimates after that, about $150 million will remain unspent.

“Hopefully we can let it ride for two or three months and see where everything stands,” Clouse, R-Ozark, said. 

Congress put tight restrictions on how the funds could be used, including not allowing any expenses other than those directly related to the outbreak, making spending the money more challenging than many assume, state officials have said.

This week’s new legislation did not change the parameters of how the money can be spent, only the deadline.

“They didn’t take any strings off, as far as spending latitude,” Clouse said. But he said it gives the state some “breathing room” on further spending.

Others agreed that an updated accounting of spending to date is needed.

“I think it will be important for the Governor’s office to assess and report the current status of the CARES Act funding, assess the recently passed federal stimulus bill in its totality, and then to consult with the Legislature regarding recommended next steps that are strategically focused upon utilizing the CARES Act funds for the maximum benefit of the citizens of Alabama,” Rep. Bill Poole, R-Tuscaloosa, said. He’s chairman of the House education budget committee. 

Said Albritton: “We need to get an idea of what is actually left and what is spent … We’ve got to shift from trying to get all the money out (to pausing and assessing).”

Albritton said details about how the pending $900 billion package benefits Alabama entities.

“That is going to change some things I think in how we designate and redirect,” he said.