State awaits guidance on $3.6B in virus relief
Tennessee is set to receive $3.6 billion in federal coronavirus relief, though state officials are still awaiting guidance before determining where, exactly, those funds will go.
While the state is receiving federal funds through a number of grant programs, Tennessee got its first payment of $1.3 billion on Monday from the Coronavirus Relief Fund, part of the national CARES Act. Another $1 billion is expected to come Friday.
“Before we actually say what we’re going to spend it on, we’ve got to understand from the federal government what we can spend it on,” Gov. Bill Lee said during a meeting Wednesday of the newly-formed Financial Accountability Stimulus Group. The group is a task force of state officials who will determine how coronavirus relief money should be spent.
The Coronavirus Relief Fund is meant to help states cover costs related to the COVID-19 pandemic incurred from March 1 through the remainder of the year. The new task force will oversee how that $2.3 billion is doled out.
What will the relief money cover?
The Coronavirus Relief Fund is just one part of an estimated $3.6 billion in federal COVID-19 aid Tennessee is expected to receive.
Some grants, like the Education Stabilization Fund, are required to go directly to K-12 districts and colleges and are subject to less oversight by the state.
The Coronavirus Relief Fund, meanwhile, gives state officials more agency in distributing funds.
So far, Tennessee has received $1.8 billion in federal aid related to the virus which, in addition to the first payment from the relief fund, includes $274 million for TennCare and $169 million for education. Food programs, the arts, hospitals and a state election security program have already received federal funds.
The accountability task force plans to watch which entities receive federal money directly and take that into account before distributing other funds.
They intend to first use federal dollars before tapping into state reserves, said Stuart McWhorter, director of the COVID-19 Unified Command Group. He most recently was the state’s finance and administration commissioner.
The Coronavirus Relief Fund will not address the state’s anticipated shortfalls in revenue due to the COVID-19 crisis, though Lee said federal funding could help the state backfill some of those “significant” losses.
“Our greatest challenge from a budget standpoint will be the significant shortfalls that we have coming, and that will be a lot of our focus going forward,” Lee said.
The governor suggested that while considering possible uses for the funds, those in the task force “imagine how we strengthen our public health system” in anticipation for a future resurgence of the virus.
Lee used the example of using the funding to allocate additional resources for telemedicine programs.
From dozens of federal initiatives and grants, funds will be distributed through 17 state departments and agencies, including:
❚ Arts Commission
❚ Childrens Services
❚ Human Services
❚ Economic and Community Development
❚ Finance and Administration
❚ Higher Education
❚ Mental Health
❚ Secretary of State
❚ Department of Transportation
❚ Tennessee Emergency Management Agency (not including disaster relief funds)
❚ Tennessee Housing Development Agency
Feds set requirements for tracking relief money
Money spent from the Coronavirus Relief Fund must be carefully tracked and documented, as the federal government may later require proof that the funds were distributed correctly, according to Lee’s newly-appointed Finance and Administration Commissioner Butch Eley.
Tennessee could be required to pay back any expenditures the federal government determines to be invalid, and any part of the $2.3 billion that is not spent by the deadline will have to be returned.
Budget Director David Thurman said it’s not yet clear if all funds have to be spent by the end of 2020, or whether they can merely be allocated by that time.
“The Treasury has assured us we’ll be allowed a great amount of flex in how these funds can be used,” Thurman said.
Lee said he expects to receive more federal guidance on this question and others within the next week or two.
Source: Knoxville News Sentinel, by Cassandra Stephenson and Natalie Allison
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Published April 23, 2020