Gov. Brad Little prepares for Idaho’s $1.2 billion in COVID-19 relief funding
Hayat Norimine, Idaho Statesman
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Little in a virtual press conference, Thursday criticized the federal government for what he called irresponsible spending, as states still had money left unspent from the CARES Act. Little said it also bails out states with higher unemployment rates.
Idaho will directly receive nearly $1.2 billion in discretionary funds from the COVID-19 federal relief package. The state will receive another $1 billion for programs, such as Meals on Wheels or substance abuse prevention grants.
“The plan is being mortgaged on our children and grandchildren’s future,” Little said. “They will shoulder the burden to pay off this massive debt.
“All that said, rejecting the funds is not the right thing to do for Idaho,” he added. If Idaho state officials rejected the funding, it would be reallocated to other states.
Little also criticized the decision to allocate money partly based on state unemployment rates — Idaho has mostly kept businesses open throughout the pandemic and has one of the lowest unemployment rates in the country.
GOV. LITTLE WILL WORK WITH STATE LEGISLATORS ON FUNDING APPROPRIATION
Little said he will work with state legislators on a plan to get those dollars appropriated. Most of the funding can be used through Dec. 30, 2024, which provides a much longer time frame than the nine-month window the federal government provided to states in the past.
Some of the funding will need to be allocated in the next 30 to 60 days — mostly K-12 education spending, said Alex Adams, head of Little’s Division of Financial Management.
About $439 million would need to be allocated to school districts and spent by September 2023, Adams said. Another $104 million would need to be allocated within a month to areas with populations of fewer than 50,000. Child care grants would also need to be spent by September, he said.
Adams said Thursday that the state plans to limit the uses to one-time expenses. Local governments are expected to first exhaust the funds they receive from the federal government before seeking state discretionary funds, he said.
Counties and cities in Idaho will receive a total of $576 million from the relief package, according to the governor’s office.
Little wouldn’t comment on the merits of House Bill 332, which would use $389.4 million of the state’s general fund for income tax cuts. Critics said the bill could jeopardize federal funding if that money is not allowed to be spent on tax cuts.
Little said he continues to support one-time and ongoing tax relief but wants to make sure the state budget is balanced by the end of the year.
“We’re still looking at the bill,” Little said. “I proposed ongoing and one-time tax relief. That’s still my position.”
FEDS COULD BAR STATES FROM USING COVID-19 RELIEF PACKAGE TO CUT TAXES
The funding was allocated to states based on population and unemployment rates. Beyond COVID-19 relief, the federal money can be used to provide premium pay for essential workers, cover a reduction in revenue, or invest in certain types of infrastructure — water, sewer or broadband systems.
Idaho Attorney General Lawrence Wasden, along with 20 other Republican attorneys general, signed onto a letter on Tuesday that requested the federal government not prohibit states from using the economic aid for tax cuts. The U.S. Treasury in a response Wednesday said states can cut taxes if they use their own funds, not the relief package, to offset those costs.
State officials said they will still need to wait for guidance from the U.S. Treasury. But Adams said he believes the U.S. Treasury’s statement suggests that Idaho could go through with the tax cuts without being penalized because the state would use its surplus, not federal funding.
Idaho’s U.S. Sens. Jim Risch and Mike Crapo introduced a bill in Congress that would prevent the federal government from barring the use of the federal stimulus for tax cuts.
Little said that last year, state officials responded “responsibly and transparently” to act quickly and allocate the federal relief in the middle of a public health crisis.
But the ability to spend the federal dollars through the end of 2024 will allow state officials to take their time on deciding how to allocate the funding.
“This time around, the situation allows us to spend more time deliberating on the best ways to use the funds to support the next generation of Idahoans who will have to pay off the debt,” Little said. “We should not hastily spend the funds we receive. … We must be thoughtful and deliberative in our approach.”