Missouri budget chief wants all federal pandemic aid funneled into one fund
(The Center Square) – Missouri officials are unsure how much in federal assistance the state and local governments will receive when President Joe Biden’s $1.9 trillion stimulus package is approved by Congress.
They could get a firm figure soon with the U.S. House expected to pass the package after it was endorsed by the Senate in a partisan vote last week. The House could adopt the ‘American Rescue Plan of 2021’ and send it to Biden as soon as Tuesday.
Missouri House Budget Committee chair Rep. Cody Smith said while there is uncertainty, one thing is certain: “It will be a lot of money.”
“It is generally agreed upon and thought that Missouri will receive billions of dollars with the next round of stimulus for various purposes,” he told MissouriNet Radio. “Although we don’t know exactly how much, we do anticipate it will be a lot of money.”
Smith on Feb. 22 filed House Bill 1236, which would create a ‘2021 Federal Economic Stimulus Fund’ for all the money the state receives from the American Rescue Plan of 2021 and any other federal assistance through Dec. 31.
The two-page bill was heard Monday by the House Budget Committee and will be discussed by the panel again on Wednesday.
“The intent there is to set up a fund, receive those funds from this next round of federal stimulus and keep them separate from all the other funds we have in the state treasury for transparency purposes, for management purposes,” Smith said. “it is easier to keep them separate than commingle with other funds.”
Under the stimulus package as it now stands, state governments would receive about $195 billion in assistance and local governments about $130 billion. The local government allocations will be based on populations and distributed to cities through CDBG criteria.
Much of the federal stimulus monies are dedicated for specific purposes and are one-time allocations, which is why a separate fund would help in distributing the aid where most needed, Smith said.
“It puts a great emphasis on us to spend it wisely, invest it wisely,” he said.
The measure states that the ‘2021 Federal Economic Stimulus Fund’ “shall consist of all moneys received in the state treasury under the American Rescue Plan of 2021, or any subsequent economic stimulus or budget stabilization plan as enacted” by Congress between March 1 and Dec. 31 “which are not required to be allocated to other funds.“
State Treasurer Scott Fitzpatrick would be the custodian of new, temporary fund. Under HB 1236, he would have extensive discretion.
“The state treasurer shall invest moneys in the fund in the same manner as other funds are invested,” the bill reads. “The state treasurer is hereby authorized to create or re-designate funds as necessary to avoid conflict with provisions of federal law prohibiting commingling of certain funds derived from any federal act under this section.”
Missouri received $2.97 billion in direct state aid from the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act, but states and local governments did not receive any direct assistance in the $900 billion COVID-19 relief bill approved by Congress in December.
More than $340 million in CARES Act money was directed into the state’s Medicaid program, MO HealthNet, and $521 million was granted to continues and cities..
Gov. Mike Parson withheld spending $1.27 billion in CARES Act money until November when he convened a special session for lawmakers to allocate the federal assistance to schools and social programs, including job training, homeless relief, domestic violence and child support.
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