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March 25, 2022

Some 'outrageous' and 'just nuts' ways pandemic relief money is being spent

Daily Briefing

    A new report sheds light on the surprising ways many state and local governments have spent federal pandemic relief money to date, Brian Slodysko reports for the Associated Press.

    Background

    Amid the current pandemic funding debate, many Republican lawmakers have argued that an accounting of how coronavirus relief funds have been spent by states needs to occur before additional funds are passed.

    For example, Sen. Mitt Romney (R-Utah) and 35 other Republican senators this month sent a letter to President Joe Biden saying they wanted a "full accounting" of how the government spent previous Covid-19 funds before supporting new funding. "Show us how you've already spent the money Congress gave you," he said.

    "The basic thing we ought to figure out is, is there a need?" Sen. Richard Shelby (R-Ala.) said. "Secondly, if there's a need, where's all the money we appropriated?"

    How the pandemic relief money is being spent

    According to a new analysis from the Associated Press, projects paid for by pandemic relief funds include:

    • $140 million for a high-end hotel with views of the Atlantic Ocean and an 11,000-square foot spa in Broward County, Florida
    • $12 million for the renovation of a minor league baseball stadium in Dutchess County, New York
    • $5 million to pay off the debts of the Edward M. Kennedy Institute for the U.S. Senate
    • $400 million to build new prison facilities in Alabama
    • Tens of millions of dollars to tourism marketing campaigns in Puerto Rico ($70 million), Washington, D.C. ($8 million), Tucson ($2 million), and Alexandria, Virginia ($120,000)
    • $6.6 million for new irrigation systems at two Colorado Springs golf courses
    • $5 million in Birmingham, Alabama for the 2022 World Games
    • $2.5 million to hire additional parking enforcement officers in Washington, D.C.
    • $2 million to purchase a privately owned ski area in Pottawattamie County, Iowa
    • $1 million to pay off overdue child support in St. Louis
    • $300,000 for a museum honoring Major Taylor—a famed Black bicycle rider known as "Worchester Whirlwind," who died in 1932—in Worchester, Massachusetts
    • $15 million for upgrades to improve New Jersey's bid to host the 2026 World Cup
    • $53,000 to remodel the City Hall in Woonsocket, Rhode Island

    Although these expenditures only account for a fraction of the $350 billion that was made available to state and local governments through the American Rescue Plan, "they are examples of uses of the aid that are inconsistent with the rationale that Democrats offered for the record $1.9 trillion bill," Slodysko writes. "The cash was desperately needed to save jobs, help those in distress, open schools, and increase vaccinations."

    Commentary

    Liz Bourgeois, a spokesperson for the Treasury Department, said the program was a success because it allowed state and local governments to "recover from financial distress" and "achieve their own strategies for restoring jobs and industries hit by the pandemic."

    "Ultimately, local governments are accountable to their communities on their decisions on how best to use their funds," Bourgeois added.

    Still, the AP report concluded, that these "distinctly different outlays have one thing in common: Each is among the scores of projects that state and local governments across the United States are funding with federal coronavirus relief money despite having little to do with combatting the pandemic."

    According to Rep. Abigail Spanberger (D-Va.), these expenditures are "outrageous" and "just nuts," and are an affront to responsible governments. 

    "Our hospitals were overwhelmed because of the pandemic and somebody now has a hotel somewhere?" Spanberger added. "They are basically money laundering funding that is meant to help communities that are suffering," she added.

    "It's hard to imagine how a four-star hotel is helping to solve the pain of Covid," Romney said.

    Although the Treasury Department established rules governing how the relief money could be spent, state and local governments still faced very few limitations, AP reports.

    In addition, the unprecedented volume of money distributed through the pandemic relief funds have made it increasingly difficult to enforce the rules outlined by the Treasury Department or state and local governments.

    "The amount of money that went out was so massive and so far beyond anything that has ever been spent in our country before, that our capacity to audit every dollar spent is clearly stretched," Romney said.

    However, lobbyists for local governments have argued that the rules were written with the intent of giving as much spending flexibility as possible. 

    "Counties should be able to determine what's best for them," said Mark Ritacco, director of government affairs for the National Association of Counties. "Their residents will decide whether that was appropriate or not at the ballot box." (Slodysko, Associated Press, 3/23; AP/Modern Healthcare, 3/6)

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