Alabama is sitting on more than $800 million in federal COVID-19 release funds, but state Finance Director Kelly Butler said Wednesday he believes the state will spend nearly all of it by the Dec. 30 deadline.
The money comes from Alabama’s $1.9 billion allotment from the Coronavirus, Aid, Relief, and Economic Security (CARES) Act, passed by Congress in March.
Any unspent money by the end of the year will revert to the federal treasury. As of Wednesday, that total stood at $818 million.
“I’m highly confident that we’ll get substantially all the money spent by the deadline,” he told reporters on a conference call.
State records show the greatest amount of unspent money is for a program unveiled by Gov. Kay Ivey last week called Revive Plus. Most of the $200 million allocated for that – $177 million –remains available for cash grants up to $20,000 for small businesses, non-profits and faith-based organizations in Alabama.
Butler said the state has received nearly 30,000 applications. The deadline to apply is Friday.
After that, the most unspent funds break down like this:
- $118.1 million for county governments.
- $94.5 million for cities and towns.
- $49.5 million for state agencies.
- $45.9 million for education, health and wellness programs.
A full list can be found here.
Some social advocacy organizations have complained the state hasn’t done enough to address the needs caused by the coronavirus and has not been creative enough in disbursing the funds. But Butler said the state is constrained by limitations placed by Congress.
“There is a perception out there that this money can solve everybody’s problem and can be used for everything that people want it to be used for,” he said. “And the reality is that the Treasury guidance ... just does not allow us to do everything that everybody wants us to do. And the penalty if we use the money outside the bounds, outside the law and the regulations, is that the state has to repay the money.”
One constraint, Butler acknowledged, is that much of the money must come in the form of reimbursements, requiring recipients to spend the money up front and then bill the state. But some local governments in poor areas have troubling coming up with the money on the front end.
“Treasury guidance and the CARES Act, we believe, prohibit us from sending the money out up front,” he said. “And this is not something we believe we can do.”
Alabama Arise, an anti-poverty organization based in the Yellowhammer State, helped spearhead a letter last month holding the state’s feet to the fire. Its executive director, Robyn Hyden, said the state has made progress.
“Alabama was in the same boat as a lot of states, feeling very cautious about the vague guidance,” she said.
Hyden praised the Revive Plus grants. She noted they allow recipients to apply for hazard pay, “which is a really big benefit to support your frontline workers to be in risky professions to make sure that their pay is adequate for the work they’re doing,” she said.
Dixie Pomerat, president of the board of directors of the Unitarian Universalist Fellowship of Mobile, said the needs caused by the pandemic are great.
“We fully support what Alabama Arise has put out there,” said Pomerat, whose church signed on to the letter sent to the governor last month. “I think Alabama should use all the money that’s available.”
Butler said federal guidance will allow the state some flexibility. He said there will be a two- to three-month grace period to make reimbursements as long as the recipient submit invoices by the end of the year. He said he expect to spend all but about $10 million – and perhaps even less.
Butler said his department will ask to transfer money elsewhere before the end of the year if it goes unclaimed. The state already has done this, most notably transferring $300 million originally meant for prison into the unemployment compensation fund.
Butler said the unemployment fund could get another injection – the maximum figure would be $287 billion. With COVID-19 cases rising, he added, more money would be moved to health care programs.
Hyden said she hopes Congress breaks a legislative logjam and passes more aid.
“Those needs do not disappear on Dec. 30,” she said. “So, you know, I’m glad that our state has really been pushing and working hard to get all the existing cares act money out to organizations and communities.”