Billions of federal dollars have been bestowed upon Rhode Island through COVID-19 relief funding, but a large portion of the money sits unused as state officials struggle with finding the best way to allocate the windfall.
The state used much of the $1.25 billion in Coronavirus Aid, Relief and Economic Security Act funding earlier this year to help fill state budget gaps in fiscal 2021, but questions remain about how Rhode Island should allocate the $1.1 billion from the American Rescue Plan Act.
In a supplemental budget proposal for the current fiscal year, Gov. Daniel J. McKee has earmarked 10% of the funds to invest in small businesses, social services and affordable housing. The plan, submitted to the General Assembly on Oct. 7, needs the approval of legislators.
Some of those legislators are saying the ARPA money needs to be spent differently than how state leaders deployed the CARES Act aid.
Rep. Carlos E. Tobon, D-Pawtucket, co-chair of the House American Rescue Plan Act Task Force, said the CARES Act funding was used to fix immediate problems, while ARPA funds present an opportunity to carefully invest in long-term economic needs and projects that aid the workforce, small businesses and infrastructure.
“The CARES Act funding was meant to put Band-Aids all over the place during the pandemic, but it wasn’t really surgical,” he said. “The ARPA spending is meant to be surgical. We have got to be surgical in our approach.”
Fixing short-term fiscal problems is easy, Tobon said, but the state needs to take on the more challenging task of looking for long-range solutions. “We have to start thinking in ‘forever approaches,’ ” he said.
Another change from the CARES Act spending will be the decision process, Tobon said. “During the pandemic, we gave [former Gov. Gina M. Raimondo] the benefit of the doubt to make sure the economy kept going,” he said.
With the ARPA money, the General Assembly will exert more control and work with stakeholders, Tobon said.
The ARPA Task Force met on Oct. 13 to discuss what other states were doing with their ARPA funds and develop strategies. During the meeting, Sharon Reynolds Ferland, the House fiscal adviser, outlined federal guidelines for allowable usage of the funds.
The focus of the task force was on using ARPA funds for public health and economic impacts, as well as providing premium pay for eligible essential low-income workers.
Ferland said the premium pay program could be retroactive to January 2020 and should target lower-income people.
House Minority Leader Blake A. Filippi, R-New Shoreham, said the legislature must be careful with its approach to expending federal funding this time and learn from its mistakes. He believes the CARES Act funding should have been used to aid citizens directly instead of holding onto the money for months before filling budget gaps.
Filippi noted that the R.I. House Republican Caucus reported in October of 2020 that of the $1.25 billion the state received in CARES Act funds in March 2020, only 24% was spent as of Sept. 30, equaling $299 million.
“It wasn’t until December of 2020 that we started spending that money, and we used it to balance our books,” Filippi said. “It was spent on government when it should have been spent on the people.”
Filippi fears the same thing may be happening with the ARPA funds.
“I think that McKee is right,” he said. “We should start putting it on the street. We have businesses that are suffering.”
Did Filippi even read the guidance from treasury? It’s only 39 pages and lays out, in painstaking detail how you can and can’t spend the money. During that hearing, they also discussed exactly what he’s concerned about. Also, he’s saying that they need to be careful with their approach but also be putting it out on the street? Is there going to be any follow up on this article, because he sounds wildly uninformed and there are clearly better people to ask about this.