How the CARES Funding is Being Allocated

By Dick Hall-Sizemore

Upon Jim Bacon’s suggestion, Jim Sherlock and I have taken on the task of looking closer at the federal COVID money that is coming the Commonwealth’s way and trying to discern how it is being spent.  Unfortunately, this is not an analysis one finds in the general news media.

We have taken different approaches, perhaps reflective of our different backgrounds.  Jim has started with the federal programs and their components and requirements, along with the amounts of funding allocated to Virginia. I am looking at how the federal  pot is being split up among state agencies, as reflected in the state budget.  Later, I hope to examine how some of those agencies are spending the money.

Under the CARES Act, Virginia was entitled to $3.11 billion. With the interest of $11.9 million earned on this amount, there was a total of $3.12 billion available.  After disbursing $1.3 billion to localities, as required by the federal law, the state had about $1.8 billion to spend.

In the Appropriation Act passed by the 2020 Special Session, the General Assembly outlined how that money was to be used. However, the legislature also provided the Governor flexibility to move the money around. In his proposed budget amendments presented in December, the Governor included significant changes and additions to that outline. In his presentation to the House Appropriations Committee in mid- January the Secretary of Finance included an updated list of “approved” uses, which largely reflected the list in the budget bill, although there were some additional changes

At the end of this post, there is a table I have prepared, based on  Secretary Layne’s January presentation, showing total authorizations by agency, along with a breakdown of the specified purposes within each agency. Here are some of the highlights:

• The largest single obligation is $220.8 million for K-12, to help cover the costs for “re-opening” schools.
• The agency receiving the largest total obligation is the Department of Medical Assistance Services (Medicaid) at $238.0 million. However, the Department of Emergency Management ($237.4 million) and the Department of Health ($236.9 million) are close behind.

The data in this table go only so far in shedding light on the Commonwealth’s use of COVID money. It tells us what agencies received funding, how much they received, and the purposes for which they received it  It does not tell us how it was spent and what results were realized from those expenditures. Here are a few questions that occurred to me immediately as I compiled the data:

• Giving the Dept. of Emergency Management almost a quarter billion dollars raises a lot of red flags. In the past, that agency has been somewhat cavalier about spending emergency funding and has been reticent and opaque, to say the least, when asked about how it spent money. The Governor’s office would do well to watch closely this agency’s handling of the COVID funding  (Note: My comments are applicable to the agency under the leadership of earlier directors. I have had no experience with the current director; thus, my concerns may no longer be applicable.)
• $152.5 million has been allocated to the Dept. of Health for contact tracing and testing. At least $59.2 million of that amount was specifically for contact tracing. How much of that latter amount has been  actually spent for contact tracing? How was it spent? What value did the Commonwealth realize from these expenditures?
• The Dept. of Small Business and Supply Diversity is a small agency (currently 57 positions, with the Governor proposing seven more). It currently administers a small financing program, consisting primarily of loans to businesses and grants to investors. Its total FY 2021 appropriation is $7.4 million. How quickly and competently will it be able to develop and administer a $120 million grant program for assistance to small businesses suffering losses due to the pandemic?

In addition to the CARES funding, the Commonwealth will receive funding from the stimulus package passed by Congress in late December. Rather than inundate you with too many numbers in one post, I will cover that revenue in a later post.

 

Distribution of Coronavirus Relief Fund Revenues, by agency

(as of 1/14/2021)

(Dollars in millions)

 

Dept. of Medical Assistance Services– $238.0

• Additional hospital reimbursement for Covid costs–$60.0
• Long-term care facilities–$55.6
• PPE for personal care attendants–$9.3
• Hazard pay for home health workers–$73.1
• Retainer payments for Medicaid DD Waiver support providers–$25.0
• Expand definition of long-term care facilities to include waiver residential providers–$15.0

Dept. of Emergency Management– $237.4

• PPE–$139.1
• Testing–$20.8
• Food Security–$2.0
• Technical assistance, public education, and preparedness for COVID pandemic response–$41.8
• Other–$33.7

Dept. of Health– $236.9

• Contact tracing and testing–$152.5
• Replace deficit authorization–$3.3
• Point of care antigen testing–$16.0
• Executive order enforcement–$1.3
• Carilion serology study–$0.6
• Vaccination program–$22.1
• Additional testing needs-One Lab–$9.9
• Agreement with Unite Us–$10.0
• DocuSign subscription–$0.2
• COVID-19 communications strategy–$3.4
• Sample testing costs, staffing, overtime–$6.6
• Assoc. of Free and Charitable Clinics–$3.0
• Community mitigation efforts–$0.04
• Reimburse salaries for “public health employees”–$7.9

K-12– $220.8

• Costs for re-opening schools

Virginia Employment Commission– $210.0

• Unemployment assistance

Dept. of Small Business and Supplier Diversity –$120.0

• Small business assistance grants

Higher education– $116.3

• PPE, virtual education, cleaning, telework, other

Dept. of Housing and Community Development — $100.8

• Emergency housing for homeless–$8.8
• Mortgage and rental assistance–$62.0
• Broadband accessibility–$30.0

State Corporation Commission– $100.0

• Direct utility assistance for customers

Statewide– $80.5

• Agency based requests (2020)

Dept. of Social Services– $82.6

• Food security—expand emergency food supply package–$0.6
• Childcare provider stabilization/increase local capacity to provide care for school-age children–$74.9

Virginia Community College System—$30.0

• Training vouchers for unemployed

State Council of Higher Education in Virginia– $22.0

• Payment for private institutions of higher education

VCU Hospital–$11.3

• Capital, PPE, testing, education

Dept. of Correction/Dept. of Juvenile Justice–$6.6

• PPE, medical observation units, overtime

 Dept. of General Services–$6.1

• Consolidated labs

Dept. of Behavioral Health and Developmental Services–$4.5

• Hospital census support–$2.8
• Hazard pay–$0.7
• General support –$0.9

UVa Medical Center–$3.4

• Capital, PPE, testing, education

Dept. of Agriculture and Consumer Services–$1.2

• Food security—agriculture surplus and emergency food

Alcoholic Beverage Control Authority–$1.0

• PPE, sanitization, safe operations

State museums and centers of higher education–$0.8

• PPE, virtual education, cleaning, telework, other

State Senate–$0.2

• PPE, sanitizer, plexiglass, technology

Dept. of Veterans Services–$.06

• PPE, sanitization, medical overtime