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Missouri Gov. Parson says he won’t spend $2.7 billion in COVID relief until next year

Missouri will receive roughly $2.7 billion in federal aid from President Joe Biden’s COVID-19 relief plan, but Republican Gov. Mike Parson doesn’t want to start spending it until January.

The money is from the American Rescue Plan, the latest pandemic aid bill signed by the Biden administration. State governments can use it for a range of economic or public health needs not eligible for funding in prior federal packages, according to guidance released by the U.S. Treasury Department on Monday.

Parson’s administration, his spokeswoman said, will propose a spending plan in the next legislative session. He previously said he wanted to put the money toward long-term investments.

“We want to be thoughtful about how to use this funding to improve the lives of Missouri citizens for the long term,” spokeswoman Kelli Jones wrote in an email on Monday. “As such, we will work on developing a plan over the interim and proposing it during the next General Assembly.”

St. Louis Rep. Peter Merideth, the highest-ranking Democrat on the Missouri House Budget Committee, said that wasn’t soon enough to respond to the pandemic.

“It’s too late,” he said. “The money’s supposed to be spent now … Based on the speed with which they have moved on the CARES Act money for the past year, I would not be surprised if they drag their feet.”

Officials nationwide last year were hesitant to quickly spend the aid, citing concerns they would run afoul of federal regulations on the allowable uses. This year, those limitations are far fewer.

The American Rescue Plan, which Congress passed in March, has broader spending guidelines than the previous relief legislation. The Treasury Department issued a list of acceptable uses Monday.

They include:

  • COVID-19 mitigation such as vaccination efforts and improved ventilation, public health staff salaries and mental health treatment

  • Economic aid to workers and businesses such as rental and food assistance, small business help and recovery for tourism and hospitality

  • Addressing racial disparities in health, housing and education

  • Replacing government revenue lost during the pandemic

  • Providing premium pay for essential workers such as nursing home and food production staff

  • Investing in water, sewer and broadband infrastructure

Two uses explicitly barred are for tax cuts or to bail out public pension funds. Missouri Attorney General Eric Schmitt, a Republican candidate for U.S. Senate, filed a lawsuit in March over the tax cut restriction.

The money will come in two tranches. The first will be distributed to states starting Monday, while the second will arrive next year. The combined aid to state and local governments will amount to $350 billion nationwide.

Kansas will receive $1.6 billion. Local governments in the region will receive millions, including $195 million for Kansas City.

In sharp contrast to Parson, the Kansas City Council will be debating how to spend the first tranche of the federal money during Wednesday’s session.

City manager Brian Platt has already presented a proposal for how to spend the bulk of this year’s money with roughly $80 million going toward replacing lost revenue. Mayor Quinton Lucas will soon offer recommendations for the remaining $18 million of this year’s aid.

“For more than a year, Kansas City government has fought for relief funding for our community and our small businesses. There is no reason to wait,” Lucas said in a statement Monday.

On the state level, Democrats have criticized the Parson administration since last year for being too slow to spend federal aid during an emergency. Missouri received about $2 billion from the CARES Act, sent more than half a billion to local governments and had more than half a billion left in late March — when Parson transferred a bulk of that to replenish the unemployment trust fund.

“Republicans don’t seem to like to spend money helping people, and so they don’t really know what to do with all this money,” Merideth said.

Lawmakers, he said, were planning to continue meeting after the legislative session ends this week to hold hearings on how to spend the money.

But Rep. Dirk Deaton, the House Budget Committee’s vice chair and a Noel Republican, said he agrees with Parson’s slower approach.

“We have to be careful and make sure we’re taking whatever amount of time is needed to be very deliberative about any spending,” he said.

Deaton said any urgent needs can be met by local governments, most of which received money from the federal government directly. For small cities that will get their funds passed through the state, lawmakers gave the state authority to send out $442 million immediately, in budget bills that they sent to Parson’s desk last week.

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