While they are still waiting for money from the latest federal coronavirus relief law, some state governors and lawmakers are already considering adding the multibillion-dollar blessing to their budgets.
Among their priorities: to replenish exhausted unemployment accounts, develop high-speed internet and provide additional help to schools and businesses.
The $ 1.9 trillion pandemic relief law signed by President Joe Biden earlier this year contains $ 350 billion in flexible aid for states and local governments, plus billions of additional dollars for specific programs such as housing assistance. Unlike previous coronavirus aid, states have a lot of leeway to use the money to fill budget holes, invest in certain infrastructure or deal with the ânegative economic impactsâ of the pandemic.
States are expected to receive a first installment soon, with a second round expected a year later.
âA billion dollars just fell from the sky in some ways,â said Vermont Gov. Phil Scott, a Republican. “It’s here, right in front of us. We have to invest it wisely.”
Like many governors, Scott had failed to explain a new influx of federal funds when he presented a budget plan earlier this year. Now he’s working with lawmakers to add it to the state’s spending plan while awaiting advice from the US Treasury Department on specific ways the money can – or can’t – be used.
Scott wants to invest this money in economic development, climate change initiatives, water and sewer infrastructure, housing and high speed Internet. Democratic Senate President Pro Tem Becca Balint also wants some to focus on workforce training.
In other states, spending plans include bonuses for teachers and first responders; assistance to cinemas and places of entertainment; construction of parks and public facilities; and subsidies to farmers, commercial fishing operations and food processors.
“Of course, it’s classic politics: they announce it, no details and everyone fills the void with what they want to spend it on,” said Virginia Finance Secretary Aubrey Layne.
Officials in Virginia and a dozen other states told The Associated Press they were waiting for advice from the Treasury Department before developing specific spending plans. Federal law prohibits states from using aid to make pension payments or finance tax cuts. Some state officials are concerned that other uses may be excluded as well, triggering a provision requiring them to reimburse the federal government.
“If we don’t know what the guidelines are, it’s hard to spend the money because we don’t want to spend it the wrong way and get it back,” said Iowa Gov. Kim Reynolds, a Republican .
The federal law, known as the American Rescue Plan, is in addition to the $ 150 billion the federal government sent directly to states and local governments last year.
This year’s law cites water, sewage and broadband internet infrastructure as permitted uses. It is less clear whether the money can be used for other infrastructure, such as roads and bridges. But some states are considering doing it, anyway.
Budget plan passed by Indiana Legislature allocates $ 192 million in federal aid to repay obligations for an Interstate 69 project and $ 900 million for other “future infrastructure projects of State”. Maine Governor Janet Mills, Democrat, rolled out a plan this week that allocates $ 50 million for road and bridge work this summer.
A potentially broad provision allows states to use federal aid for “government services” affected by a reduction in revenues induced by a pandemic. States can also use the aid to provide additional pay for essential workers, such as the $ 1,000 bonuses included in a Florida budget for first responders, teachers, and early childhood instructors.
Federal law allows states to tackle the economic effects of the pandemic by providing assistance to households, small businesses, nonprofits, and industries such as tourism, travel, and hospitality. But that doesn’t necessarily prevent the money from going for other purposes.
Connecticut Gov. Ned Lamont, a Democrat, wants to use more than half of the state’s flexible funds to fill budget holes over the next two years. But his plan would also spend millions on social programs.
Lamont wants to use $ 15 million to provide free admission for children to museums, aquariums, zoos and other places from July to Labor Day; $ 3.5 million to help send low-income children to sports and specialty camps; and $ 1.9 million for programs that provide âsafe, fun and healing spacesâ for teens. He said the programs would offer a double benefit: helping children who were socially isolated during the pandemic and organizations that lost money due to a lack of clients.
Mills’ sweeping plan would provide aid to Maine’s agriculture and seafood industries, increase public support for private sector research, and subsidize health insurers to temporarily lower premiums for small businesses and their employees. , among other things.
Officials in Connecticut, Hawaii, Indiana, Kentucky, Louisiana, Maine and Maryland are among those who want to use some of their federal aid to replenish depleted unemployment trust funds. This could save businesses temporary tax hikes that might otherwise be imposed to pay off federal loans that fund benefits when unemployment rates soar during coronavirus shutdowns.
A plan passed by the Kansas Republicans-led Senate would spend nearly $ 700 million to compensate small businesses that have been forced to shut down or whose operations have been restricted due to the pandemic – a “pot of money”. gold âwhich some Democrats say should be passed on in part. workers at higher wages.
Republican state. Senator Mike Thompson said compensation should have been paid months ago as pandemic restrictions were imposed.
âA lot of these businesses shouldn’t have been shut down,â said Thompson.
In Kansas and some other states, the surge in federal funding has created conflict over who can control how it is spent.
Wisconsin Gov. Tony Evers, a Democrat, vetoed bills passed by the Republican-led legislature that sought to use $ 1 billion for property tax cuts, $ 308 million for local roads and $ 250 million to pay for transportation obligations. Non-partisan legislative staff had warned that these uses may not be permitted under federal law. Evers said he would instead spend the money according to his own plans, not all of which were detailed.
New Mexico Governor Michelle Lujan Grisham has vetoed the Democratic-led Legislature’s plan to spend $ 600 million in the state’s unemployment fund, $ 200 million on roads and $ 100 million dollars to a college scholarship program. The Democratic governor said in his veto message that “the legislature has no power” to tell him how to use the money and the state should wait for advice from the federal government.
Lieb reported from Jefferson City, Missouri. Associated Press editors John Hanna in Topeka, Kansas; David Pitt in Des Moines, Iowa; Sarah Rankin in Richmond, Virginia; Wilson Ring in Montpelier, Vermont; and AP staff across the country contributed to this report.