Despite an extension of the CARES Act spending deadline from the new coronavirus stimulus bill and months of criticism, Gov. Jim Justice says his plans to spend the money are unchanged. Meanwhile, West Virginians are struggling, and advocates say more of the money should go toward addressing urgent needs.
“We’re still going to go with our plan,” Justice said during a Monday press briefing. “It’s done. It’s done right. And, at the end of the day, there’s not any great big backlog of money that’s going to be there on Dec. 30.”
West Virginia had $751,306,967 remaining in CARES Act money as of Monday, according to the state auditor’s website. Originally, the state had to spend the $1.25 billion it was given in April by Dec. 30. A new coronavirus relief bill passed by U.S. Congress extends the deadline by a year, and President Donald Trump is expected to sign the measure.
“I see this as additional time and opportunity for the state to not feel like we’re forced to spend it on something because the deadline’s here, rather, that we could potentially spend it on urgent needs of folks in West Virginia,” said Kelly Allen, the executive director of the West Virginia Center on Budget and Policy.
Deadline pressure has already had an effect on the spending. Of the $50 million originally devoted to broadband, Justice ultimately only allocated $32.3 million because of time constraints.
“We just couldn’t quite fit all this into a bucket and move it fast enough right now before that Dec. 30 cut off,” Justice said in early December.
That money, meant to help West Virginians work and learn at home over the internet, ultimately went toward new school textbooks, upgrades to public safety radio and a resurfaced wilderness trail. Only one grant — the sole one publicly announced by the governor — went to internet service.
But many groups have spent the past several months urging Justice to put more of the money towards more immediate needs. Twenty-nine organizations signed a letter to Justice in mid-October that advocated for the money to be used to help West Virginians pay for necessities like rent, mortgages and child care.
“Each of these areas must be funded with a recognition that Black, Brown, and low-income communities are disproportionately negatively impacted by this virus,” the organizations wrote.
According to a survey from the U.S. Census Bureau conducted from Nov. 25 to Dec. 7, nearly 35% of surveyed adults in West Virginia reported it had been somewhat or very difficult to pay for usual household expenses during the coronavirus pandemic.
Almost 14% reported they were in households where there was either sometimes or often not enough to eat in the last week, and 8.7% reported they were not current on rent or mortgage payments or had slight or no confidence that their household could pay next month’s rent or mortgage on time.
The letter urged the governor to redesignate CARES Act money away from the unemployment trust fund, which the largest portion — $445.7 million — goes to. The letter mentioned other options to keep the fund solvent.
“As long as it hasn’t been put into the trust fund, we still have the opportunity to make our case as to why it would be better spent elsewhere,” Allen said.
Justice has said putting the money toward the unemployment fund will reduce the taxes on businesses that typically fund unemployment benefits.
But Mike Leachman, vice president for state fiscal policy at the Center on Budget and Policy Priorities, said more urgent needs should take priority.
“Allocating a large portion into the unemployment trust fund is in my view a poor use of the fund, given the immediate needs of so many people during a pandemic,” Leachman said in an interview last month. “It merely means that in the future the businesses that support the fund will pay less in future taxes.”
Business owners, like Charleston’s Keeley Steele, who owns the restaurants Bluegrass Kitchen and Starlings Coffee and Provisions, have said they need more help — and could get it if the CARES Act funds were disbursed differently.
“I think that there is some responsibility on the state, if they have monies that can help small businesses stay afloat until we see the end of this pandemic, then they should do that,” Steele said earlier this month. “And what that is, I’m not sure. But certainly an influx of cash is not going to hurt.”
Besides the $445.7 million Justice has pledged to the unemployment trust fund, the second-largest allocation is $265 million to reimburse cities and counties for pandemic-related expenses. Other expenditures, some of them pledged and some already distributed, include the following:
- $240 million to reimburse state pandemic-related expenditures
- $74 million for COVID testing by the Department of Health and Human Resources
- $50 million for road construction projects mean to increase access to medical centers
- $40 million to the National Guard for COVID-19 testing and personal protective equipment (PPE)
- $32.3 million for broadband development to improve telework, telehealth and virtual class opportunities
- $30 million to give small businesses grants
- $16.5 million to help pay defaulted utility bills (See what advocates had to say about this utility relief program here)
- $10 million COVID-19 triage center at Fairmont Medical Center
Dave Hardy, secretary of the West Virginia Department of Revenue, said on Friday that these and a few additional allocations leave $39 million remaining CARES Act money as a cushion to be spent later.
The newest federal stimulus bill, which totals $900 billion, would also give $600 stimulus checks to many Americans, extend unemployment aid and a rent eviction moratorium, and provide another $284 billion for businesses to receive Paycheck Protection Program loans.
That money, though, is more limited than the previous stimulus bill. It does not designate new money for state and local governments, and West Virginians would receive approximately $948 million in stimulus payments from the new bill compared to the $1.678 billion they received from the last one, according to WVCBP.
And, as the pandemic intensifies in West Virginia and its economic consequences are felt, the organization says the payment does not come close to meeting the state’s needs.
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