Seven months into the COVID-19 pandemic, 29 social service organizations from throughout West Virginia despatched a message to the governor: COVID reduction {dollars} weren’t attending to the West Virginians who wanted them most.
Teams starting from the Charleston-based West Virginia Meals and Farm Coalition to the Jefferson County NAACP urged Gov. Jim Justice within the October 2020 letter to reallocate remaining reduction funds from the $1.25 billion the federal authorities granted West Virginia by the CARES Act.
CARES is an acronym for the Coronavirus Assist, Aid and Financial Safety Act, however teams offering meals and housing help instructed the regulation hadn’t but lived as much as its identify in West Virginia.
The West Virginia Poor Individuals’s Marketing campaign had met with individuals of low revenue expressing “important hardship” and wish for rapid assist paying lease and utilities and getting meals, the letter to Justice warned.
West Virginia, the teams reported, was grappling with a “diverging financial restoration.”
“Those that have been already struggling to get by are experiencing the worst and most lingering impacts of the pandemic recession,” the organizations advised Justice. “On the identical time, lots of these with greater incomes are both in a position to dwell life as common or are doing even higher than they have been earlier than the pandemic.”
The teams proposed “people-centered” spending that prioritized investing reduction funds in utility help and elevated COVID-19 testing because the December 2020 deadline for incurring prices paid for with CARES Act funds approached.
Congress later prolonged the deadline for obligating funds — coming into right into a contract or different transaction that requires fee — to Dec. 31, 2021, giving recipients extra time to distribute COVID reduction the place it was wanted most. Funds have been required to be spent by Sept. 30, 2022.
On Sept. 30, practically two years after the social service and advocacy teams’ letter to Justice and nearly a thousand days after he declared a COVID-19 state of emergency in West Virginia, $28,375,985 remained in West Virginia’s CARES Act money steadiness, in keeping with State Auditor’s Workplace information.
Which means $2.26 of each $100 that the federal authorities gave West Virginia went unspent by the deadline to spend it.
Underneath federal Division of the Treasury steerage, any recipient’s remaining quantity from the Coronavirus Aid Fund established by the CARES Act not used for eligible bills obligated by Dec. 31, 2021, have to be returned to the Treasury. The feds take into account unreturned funds a debt owed to them.
Quite than return the roughly $28.3 million to the federal authorities, the Governor’s Workplace transferred it into the Governor’s Workplace Items, Grants and Donations Fund, a fund that has been budgeted solely $50,000 lately.
“It is a particular income account that was applicable for these funds to be transferred into,” Governor’s Workplace spokesman Jordan Damron mentioned in an e mail.
Governor’s Workplace workers members say the state used CARES Act {dollars} to reimburse itself for beforehand paid COVID-related bills, and subsequently, the funding isn’t topic to Treasury steerage.
“Let’s say the state’s inexperienced and the federal cash’s blue,” mentioned Governor’s Workplace Deputy Chief of Employees Ann Urling, a former banker. “What would occur is we’d spend inexperienced {dollars} after which reimburse ourselves with blue {dollars}. However when you reimburse your self with a blue greenback, it turns into inexperienced as a result of it turns into state cash.”
Urling mentioned the state has spent roughly $70 million on further COVID-eligible bills for which the state hasn’t been reimbursed.
“We truly had over and above bills as in comparison with the CARES Act cash that we acquired,” Urling mentioned. “And what the governor wished to do was, on the finish of this [is] see the place we’re. And simply because we’ve acquired this arbitrary date of Sept. 30, 2022, to chop every thing off, that doesn’t imply we don’t nonetheless have COVID bills on the market that the state’s liable for.”
Jared Walczak, vice chairman of state initiatives on the Tax Basis, an unbiased tax coverage nonprofit, known as the state reimbursing itself with CARES Act {dollars} for beforehand incurred COVID bills “uncommon.” Walczak famous that the beforehand incurred bills must be documented and eligible.
Kentucky spent all its CARES Act funding and didn’t use any CARES Act {dollars} after the Sept. 30 deadline to reimburse itself for earlier COVID-related spending, in keeping with Governor’s Workplace spokesperson Crystal Staley. Ohio and Pennsylvania spent all their CARES Act funding earlier than the Sept. 30 deadline, in keeping with spokespeople from the Ohio Workplace of Finances and Administration and Pennsylvania Governor’s Workplace, respectively.
Urling mentioned the worldwide monetary consulting agency BDO vetted the state’s bills. The Governor’s Workplace didn’t contact the Treasury relating to the reimbursement of CARES Act {dollars}, Urling mentioned, touting the BDO steerage as a substitute.
“You’ll be able to’t say [to the Treasury department], ‘I wish to run this by you and see what you suppose,’” Urling mentioned. “They gained’t offer you a solution like that.”
Treasury spokeswoman Julia Krieger directed questions relating to coronavirus reduction funding oversight and compliance to the Treasury Workplace of Inspector Basic, which didn’t reply to a request for remark.
Anna St. Clair of the Bliss Group, BDO’s New York-based public relations agency, declined to remark.
The Governor’s Workplace as of this writing had not offered data conscious of a Freedom of Info Act request filed Nov. 7 by the Charleston Gazette-Mail for data exhibiting the bills and recipients of the $28.3 million put aside to spend by the Governor’s Workplace that the state says it later reimbursed with CARES Act funding.
Urling and Damron mentioned the state would goal lingering COVID bills with the $28.3 million.
Damron mentioned the cash transferred to the Governor’s Items, Grants and Donations Fund probably could be spent on testing, staffing prices of native well being departments and different businesses, private protecting tools and vaccination distribution prices. Damron reported in October that the state Division of Well being and Human Sources had racked up $45 million in invoices to be processed only for testing.
That very same month, Justice accepted $10 million from the Items, Grants and Donations Fund to be paid to Marshall College to help a brand new baseball stadium for the varsity, in keeping with a letter from Justice to the Auditor’s Workplace.
Justice’s approval of the $10 million switch got here Oct. 5, 5 days after the $28.3 million in CARES Act cash was transferred to that fund.
Justice on Sept. 29 introduced a $13.8 million contribution to the stadium venture slated for completion in March 2024. The governor joined Marshall College President Brad D. Smith and Athletic Director Christian Spears to make the announcement on the future residence of Marshall baseball.
Justice, a Marshall alumnus, introduced an outsized $13.8 million examine to the college earlier than throwing out a ceremonial first pitch.
The Governor’s Workplace mentioned the $13.8 million was to come back from the West Virginia Water Growth Authority’s Financial Enhancement Grant program established this 12 months by the Legislature’s allotment of $250 million from the American Rescue Plan Act, a sweeping federal COVID-19 bundle enacted final 12 months.
The Water Growth Authority accepted the $13.8 million grant for the Marshall baseball stadium venture at a Sept. 29 assembly — the identical day as Justice’s announcement on the website.
Water Growth Authority Govt Director Marie Prezioso mentioned the Governor’s Workplace later advised her the company solely wanted to supply $3.8 million of the accepted $13.8 million, leaving $10 million left over. Prezioso mentioned she wasn’t knowledgeable why.
There was $252 million within the Financial Enhancement Grant Fund as of Wednesday, in keeping with the Auditor’s Workplace.
“We’re solely going to do the $3.8 [million] now,” Prezioso mentioned of the authority.
The Governor’s Workplace didn’t reply to requests for touch upon the $10 million switch from the Items, Grants and Donations Fund to Marshall.
Marshall lacks its own residence discipline. The deliberate 2,750-patron facility might be constructed to permit future seating and skybox additions, in keeping with a venture doc.
Because the $28 million switch to the Items, Grants and Donations Fund on Sept. 30, the $10 million switch has been the fund’s largest expense by far, in keeping with Auditor’s Workplace information. Lower than $500,000 in further bills has exited the fund in that span, per the info.
9 of 13 fund bills are categorized as COVID-related. Most of them are for monetary and authorized companies paid to BDO (roughly $38,000) and Charleston-headquartered regulation agency Bailey & Glasser (roughly $48,500).
Practically $18 million remained within the fund as of Wednesday, in keeping with the Auditor’s Workplace.
West Virginia’s financial disparities, decried by state social service teams of their October 2020 letter to Justice, have worsened since then.
West Virginia’s median family revenue dropped 13.9% from 2020 to 2021, simply the sharpest decline nationwide, in keeping with information from the Federal Reserve Financial institution of St. Louis, a number one financial analysis agency. The information factored in estimates of the Shopper Worth Index measuring shopper value adjustments based mostly on a given set of products and companies over time.
Virtually 43% of West Virginians mentioned they discovered paying common family bills within the final seven days considerably or very troublesome, in keeping with a U.S. Census Bureau Family Pulse Survey taken final month. That was the next clip than in any surrounding states. The survey reported greater than 1.27 million respondents in West Virginia.
West Virginia’s revenue inequality worsened by 5 slots from 2021 to 2022, falling to forty fifth nationally, in keeping with the well being schooling nonprofit United Well being Basis’s annual American Well being Rankings reviews.
Pam Garrison, a retired minimum-wage retail employee, is conscious about West Virginia’s financial struggles as West Virginia Poor Individuals’s Marketing campaign tri-chairwoman. When she appears again on the state’s use of CARES Act funding, she sees missed alternatives to higher handle these struggles.
“There’s a lot extra that might have been finished,” mentioned Garrison, 63, of Fayette County. “It may have been unfold out a lot additional.”
West Virginia spent greater than $20 million in CARES Act funding on vaccine incentives below a lottery prize program introduced in Could 2021 that didn’t hold the state from having the nation’s lowest fee of absolutely vaccinated individuals by that fall.
The state’s $25 million in CARES Act-supported utility help for unpaid payments spanning from March by July 2020 fell effectively wanting what ratepayer advocates requested Justice for. The Governor’s Workplace mentioned that eligible functions fell wanting the quantity allotted.
Allen mentioned the state may have prolonged utility help eligibility to extra individuals with any leftover funds allotted or squared away accounts on eligible prospects immediately.
West Virginia ratepayers confronted a 90% climb in common residential electrical energy retail value from 2005 to 2020, per Vitality Info Administration information. Solely Michigan had a better enhance by proportion amid the remainder of the nation’s shift from coal-fired electrical energy.
The Public Service Fee dominated final month that Mountaineer Gasoline and Hope Gasoline prospects will see face interim common month-to-month residential invoice will increase of 15% and 28%, respectively.
“They have been drowning, they usually’re drowning now,” Garrison mentioned of West Virginians. “Individuals can’t afford it. Individuals can’t afford to dwell.”
The Justice administration despatched $445.7 million in federal coronavirus reduction cash to Workforce West Virginia, which pays for state unemployment advantages. That accounted for greater than a 3rd of the reduction cash spent below Justice, the biggest allotted share by far.
Critics mentioned it unduly padded the state’s employment belief fund to decrease companies’ unemployment taxes.
“I simply want extra of it went to common of us,” mentioned a kind of critics, Kelly Allen, govt director of the left-leaning coverage nonprofit West Virginia Middle on Finances and Coverage.
The Justice administration didn’t ignore social and well being companies all through the pandemic. It allotted $7.25 million to meals pantries and homeless shelters and put aside greater than six occasions that quantity for a statewide incentive program for nurses to maneuver to West Virginia.
However with so many West Virginians nonetheless struggling because the pandemic lingers on, Garrison is satisfied what may have been a stronger hand lent from the administration grew to become 10 digits stretched the mistaken method.
“To me, it’s been wasted,” Garrison mentioned. “And the individuals have suffered from it.”
‘Wasted an excessive amount of time’The state’s CARES Act fund spent barely greater than $20 million on vaccine incentives.
Included in Do It For Babydog, Justice’s vaccination sweepstakes named after his pet canine, have been a BMW M240i coupe, a Bennington pontoon boat with a 50-horsepower Yamaha Excessive Thrust outboard motor and accompanying trailer, a $150,000 dream marriage ceremony and free gasoline for 10 years.
All West Virginians 16 to 35 absolutely vaccinated towards COVID-19 have been eligible to obtain both a $100 financial savings bond or $100 reward card from the state. The state supplied $50 pay as you go Visa reward playing cards to totally vaccinated individuals 50 or older who obtained a booster shot.
State CARES Act fund funds to the Financial institution of New York Mellon to cowl pay as you go reward playing cards, financial savings bonds and college vouchers for vaccinated kids exceeded $5.6 million, in keeping with the Governor’s Workplace and Auditor’s Workplace information.
Current research have solid doubt that vaccine incentives are efficient.
Incentive applications had little impact over a four-month stretch final 12 months, researchers from the College of Pennsylvania’s Leonard Davis Institute of Well being Economics present in an evaluation of 24 state applications.
Lottery applications and money incentives had a restricted affect on vaccination uptake, researchers from the Columbia College Mailman College of Public Well being and the College of the Witwatersrand, Johannesburg, present in an evaluation of previous research revealed this month.
“I believe they wasted an excessive amount of time on these video games,” Garrison mentioned. “That million-dollar lottery, that was ridiculous.”
“It’s disappointing that funds that might have made such an affect for individuals and companies and nonprofits and others weren’t allotted, I believe, in a radical and considerate method,” Allen mentioned. “It appears very form of advert hoc.”
Justice’s administration was roundly criticized by Sen. Joe Manchin, D-W.Va., and others in 2020 for committing tens of thousands and thousands of {dollars} in CARES Act funding to what it known as “medical entry roads.” The transfer’s opponents known as it an inappropriate use of COVID reduction {dollars}.
The state allotted $50 million for this system, which the Governor’s Workplace known as an initiative to enhance entry to medical services. Justice initially pledged $100 million for this system however, amid criticism, later mentioned he would shift $50 million to broadband enlargement.
A lot of the roads in this system introduced in August 2020, for which greater than four-fifths of roads have been accomplished per state information, aren’t adjoining to hospitals or major care services, in keeping with a state venture map.
Because the Justice administration sat on tons of of thousands and thousands of {dollars} of CARES Act funding, state legislative leaders grew stressed. A bipartisan group of Home delegates despatched him a letter in July 2020 through which they objected to Justice wielding sole authority over $1.25 billion in taxpayer cash by advantage of the state of emergency he declared 4 months earlier.
Final 12 months, state lawmakers handed a regulation setting a $150 million cap on how a lot emergency federal cash could be spent with out appropriation by the Legislature.
Federal funding below the CARES Act was required for use to cowl bills incurred “as a consequence of” the COVID-19 public well being emergency, together with associated results similar to employment or enterprise interruptions.
Walczak mentioned the Treasury isn’t anticipated to “act with a heavy hand” in implementing CARES Act compliance partially as a result of Congress accepted a lot funding for states that they’ve struggled to spend it in congressionally approved classes.
“There’s little indication they’ll police grey areas,” Walczak mentioned.
However Walczak cited stadiums, golf programs and resort developments as examples of initiatives that aren’t what Congress had in thoughts when it handed the CARES Act.
“[Those] elevate critical questions,” Walczak mentioned.
A distinct form of enjoying discipline The CARES Act spending window might have closed on West Virginia, however there are nonetheless tons of of thousands and thousands of {dollars} in federal COVID stimulus funds accessible.
The American Rescue Plan Act enacted final 12 months offered $195.3 billion to state governments, together with $1.35 billion to West Virginia.
The state has spent barely lower than half that, in keeping with Auditor’s Workplace information.
State and different recipients should obligate funds below the regulation by the top of 2024 and spend cash to cowl these obligations by the top of 2026. Recipients should return any cash not obligated by the previous deadline and never spent by the latter deadline.
Justice, who’s term-limited, will not be governor after January 2025. However he and state legislators have an opportunity to reshape the state for years to come back.
Treasury steerage provides states and localities broad latitude on how one can use American Rescue Plan cash, allowing premium pay for eligible important employees and permitting help for reemployment, job coaching, meals, lease, utilities, mortgages, little one care and inexpensive housing.
The Legislature went one other course in January when it dedicated as much as $315 million in a special-session state finances maneuver to lure the biggest metal producer within the U.S., Nucor Metal, to West Virginia.
That preceded the Legislature’s approval of $250 million in Rescue Plan cash for the Financial Enhancement Grant Fund.
“[P]rioritize households and small companies in the identical method that we’ve prioritized, I believe, larger companies beforehand,” Allen instructed.
Allen recommends the state take into account establishing a job drive just like the one Montana Gov. Steve Bullock, a Democrat, introduced in April 2020 to supply steerage on CARES Act funding. Bullock named small enterprise house owners and representatives of financial growth teams, monetary establishments and nonprofit teams to the duty drive.
Allen hopes extra public enter will assist the state capitalize on Rescue Plan cash in a method she mentioned it didn’t do with CARES Act cash.
“To this point, we haven’t seen that,” Allen mentioned.
Justice is “deliberating on the most effective method” to take advantage of Rescue Plan cash, Damron mentioned in an e mail Wednesday.
Anti-poverty and shopper advocates hope that method is extra direct motion to place economically susceptible West Virginians on a extra degree enjoying discipline — one which helps greater than baseball.
“I can go on and on concerning the issues in West Virginia,” Garrison mentioned. “However we get a ball discipline.”