Missouri intends to spend every federal coronavirus relief dollar it can by the Dec. 30 deadline, and is using previously received funds to obtain more, state Budget Director Dan Haug told lawmakers Monday.
Haug spent most of the first three hours of a hearing of the House Budget Committee explaining the individual items Gov. Mike Parson is asking for in a $1.3 billion supplemental spending bill. After a break, members returned to offer changes to the bill and vote 27-0 to send it to the full House for debate.
As much as possible of unused CARES Act funding – possibly $400 million – will be moved to the state’s unemployment fund at the deadline, Haug said.
Before that happens, he said, every other possible use of the money will be funded.
“It is our intent to spend every last penny of CARES Act money,” Haug said.
The full House is scheduled to meet at 10 a.m. Tuesday for votes on the spending bill.
The biggest item in the spending bill is $752 million to use the state’s general coronavirus relief fund, which initially was $2 billion given to the state under the CARES Act. As of Monday, Haug said $1 billion remained to be spent, not including the unspent portions of $520 million turned over to counties.
Early in the hearing, Haug told the committee that up to $300 million of the county aid may be returned. So far, he said, counties have reported spending $128 million.
“We are certainly not telling them they need to give it back,” Haug said later during discussion of the spending line. “We are encouraging them to spend it. But there have been reports in the press that the counties are not spending this money very fast.”
Missouri lawmakers are meeting in a special session called by Parson to spend new federal funding obtained since lawmakers wrote the state budget in May and provide other appropriations, including $2 million to launch a state witness protection program.
The House Budget Committee hearing on the bill sets up floor votes scheduled for Tuesday. If the legislation moves forward as planned, the Senate Appropriations Committee will hold a hearing next Monday and the upper chamber would hold floor votes at the end of next week.
There was no action Monday afternoon from Parson on a request by House Majority Leader Rob Vescovo, R-Arnold, to add COVID-19 liability protection for businesses to the agenda of the special session.
Under questioning from members, Haug said the administration is not trying to take money back from counties that intend to use it but that the end-of-the-year deadline requires the funds to be returned to the federal government if the money goes unspent.
“We are certainly not telling them they need to give it back,” Haug said. “We are encouraging them to spend it.”
The federal government continues to update what it will accept for uses of the coronavirus relief funds, Haug said. For example, it can now be used to pay salaries for correctional workers, the Missouri State Highway Patrol, state health labs and veterans nursing homes.
The replacement of state funds will save money in the general revenue fund, Haug said, as well as the state road fund, which pays for the patrol, and Missouri Veterans Commission funds, which come from casino boarding fees. That will save about $160 million in general revenue, he said, with smaller amounts for other funds.
The state has also been using coronavirus relief funds to pay its share of expenses covered by federal disaster relief generally, which pays 75 percent of the cost of public expenses from the federal treasury. That match is available for protective equipment purchases and the state now believes it could be available for the expense of disinfecting state facilities.
“This has been a very interesting way to try to manage these funds because the rules change fairly frequently and in very significant ways,” Haug said.
Counties have made widely differing uses of their COVID-19 funding, ranging from counties that have been very slow to use it to those that have exhausted their funds. Under the CARES Act, jurisdictions that had more than 500,000 people were given direct aid, which covered just St. Louis County and Jackson County, and every other local government was given $117 per person out of the state allotment.
State Rep. Peter Merideth, D-St. Louis, wanted to know if local governments that have spent their entire allotment, like St. Louis, would get more.
That is not part of the bill, Haug said.
“So a city like St. Louis that has run out of money, you are not talking about putting any additional money into the hands of St. Louis city?” Meredith asked.
“At this point, since we don’t know how much is going to come back we haven’t made plans for that,” Haug replied.
The city could ask for more directly from the state and the authority exists to honor it, Haug said.
One of the most pressing items in the supplemental bill is authority to deliver child support payments intercepted from stimulus checks, tax refunds and unemployment benefits, Haug said. The bill provides $96 million for that purpose and the state already used the appropriation authority in the regular budget, he said.
Payments are still going out but the creative accounting used to deliver them will be exhausted by the end of the month, Haug said.
“We can’t send it out to the custodial parents until we get this authority,” Haug said.
One item that isn’t COVID-19 related is $2 million to launch a state witness protection program. Parson is proposing $1 million in general revenue and $1 million in federal crime victim funding.
Budget Chairman Cody Smith, R-Carthage, questioned whether that was an excessive amount.
Haug said Parson wanted plenty of authority because it is uncertain what spending will be like in the new program. If large amounts are unspent, he said, the request will be reduced for subsequent years.
“Until we get a little bit of experience of what the split might be,” Haug said, “we thought we would put in plenty of each.”