Blog Posts > West Virginia Must Target Remaining CARES Act Aid to Those Most in Need
October 6, 2020

West Virginia Must Target Remaining CARES Act Aid to Those Most in Need

As part of the CARES Act COVID relief package passed by Congress in March, West Virginia received $1.25 billion in Coronavirus Relief Funds (CRF) to help pay for the state’s pandemic-related costs. Guidance issued by the United States Treasury requires that payments from the CRF may only be used to cover costs that:

  1. Are necessary expenditures due to the COVID-19 public health emergency;
  2. Were not accounted for in state budgets (e.g. the funds cannot be used to cover budget shortfalls); and
  3. Were incurred during a period between March 1, 2020 and December 30, 2020.

Over the last several months, Governor Justice and many others hoped that a forthcoming COVID relief package would provide additional latitude in eligible uses for the CRF and an extension of the deadline for funds to be used. However, in recent weeks — amid partisan disagreement, growing COVID-19 cases among members of Congress, and a looming Supreme Court confirmation process — it has become uncertain whether the Senate will pass another COVID relief package at all.

If no additional flexibility is given, West Virginia’s $1.25 billion CRF will need to be spent in under three months. As of September 28, the state still had $1.01 billion remaining.

With the expiration of federal unemployment benefits and West Virginia’s economic recovery slowing, many families around the state are facing increased hardship. Last week, we highlighted West Virginia’s unequal economic recovery, with high wage jobs fully recovered, while low-wage workers and industries are still facing significant job loss. West Virginia’s remaining CRF funding represents a major opportunity to increase equity and target aid to the families and communities that are struggling the most due to the health and economic crisis.

Initial Proposal

In June Governor Justice laid out a proposal for the distribution of West Virginia’s $1.25 billion with over half of the funding going to the state’s unemployment insurance trust fund.

It is unclear how much of the $687 million going to the state’s unemployment trust fund has been spent on benefits. According to a report for the Joint Committee on Government and Finance, West Virginia spent $118.5 million on state unemployment benefits in June and July, and projects to spend $179.1 million from August to December, which would be a total of $297.6 million. If the CARES Act funds were used to pay for all state regular unemployment benefits during this time, there would still be $389.4 million left over at the end of the year.

Governor Justice has also said that the $687 million would fund the state’s $100/week share of the Lost Wages Assistance program, even after federal funding has been exhausted. With approximately 45,000 workers receiving unemployment benefits, the $100/week payment would cost an estimated $106.7 million from August 1 through the end of the year, if unemployment remains at its current level.

So, if the $687 million from the CARES Act is being used to pay regular state benefits, West Virginia would end the year with $389.4 million leftover. If it is instead being used to pay the extra $100/week in benefits, the state would end the year with $580.3 million leftover. And even if it is being used to pay all regular state benefits and the extra $100/week, there would still be $282.7 million of the $687 million leftover at the end of the year.

However, since the state still has $1.01 billion remaining unspent in CARES Act funding, it is unlikely that the state has been spending down the $687 million dedicated to the unemployment system in this way, and the state could have far more than $282.7 million leftover at the end of the year.

Other allocations with money remaining include aid to local governments and small business grants. Of the $200 million allotted to local governments, $160 million has been requested by local governments and $113 million has been approved by the Justice administration. And as of September 30, $18.89 million in grants have been awarded of $150 million allocated for small businesses.

Target Remaining Aid to Those Most in Need

We’ve talked extensively about rising food and housing insecurity among West Virginia families, the state’s slowing jobs recovery, and big concerns about what lies ahead with the expiration of federal stimulus and unemployment insurance supports. As such, remaining aid, currently over $1 billion and of which at least $283 million is likely to go unspent under the governor’s current proposal, must be targeted to those who are still facing the brunt of the health and economic crisis. Additionally, with less than three months to spend the money, the expenditures must be streamlined to ensure that the process can get aid out quickly to those who need it while following U.S Treasury guidelines.

Allowable expenditures that would target aid to those who need it most include direct assistance to people who are struggling to pay rent, utilities, and other bills due to the economic impacts of the pandemic. According to one source, all delinquent utility bills in the state could be made current with approximately $50 million. Florida is utilizing CRF funds for rental and mortgage assistance relief. West Virginia officials should consider both housing and utility assistance, as the state has one of the highest rates of housing insecurity in the country.

Funding could also be utilized to ensure that children are able to access food assistance during the pandemic while schools operate under remote, virtual, and blended learning models, as the WV Food for All coalition has recommended. Alaska authorized over $70 million of their CRF funding for child nutrition and related rural transportation costs.

Further, CRF funds can be used to send money directly to those in need. Oregon allotted $35 million in CRF funds to send $500 relief checks to the state’s unemployed workers. In fact, West Virginia could send one-time $500 checks to workers receiving unemployment benefits for about $22.5 million. They could send $500 relief checks each week through the end of the year to every worker receiving unemployment benefits for approximately $315 million.

States are also utilizing this funding to support the workforce, including beefing up subsidies and supports for child care providers and families who rely on them, covering hazard pay for front-line workers, and paying the costs of unforeseen public health and safety expenses. Wisconsin allotted $75 million to employing contact tracers, a key component to mitigation and suppression of the virus.

West Virginia is experiencing a diverging economic recovery, with those who were already struggling to get by experiencing the worst and most lingering impacts of the pandemic recession. With a long road ahead until West Virginia’s economy fully recovers and doubts as to whether additional federal relief is coming, Governor Justice must target remaining relief funds to those who need it the most — and quickly — as the deadline approaches.

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