Governor Cooper wants more money from the federal government to help North Carolina weather the Coronavirus pandemic.
He recently said as much in a July letter to North Carolina’s congressional delegation. In the letter Cooper cites continued declines in state and local revenues and says, “even assuming the eradication of COVID-19 in the near future, we are unlikely to return to previously expected 2020 revenue levels until at least 2023.”
Civitas Executive Vice President, Brian Balfour recently wrote about why Cooper’s request should send up red flags.
As you know, Congress responded to Coronavirus by passing the $2.2 trillion dollar CARES Act. The legislation included about $250 billion to states and local governments for Covid relief. To date, the federal government has allocated a little over $4 billion to North Carolina in CARES Act funding.
But as they always do, states want more from the government.
In recent weeks pressure has increased on Washington lawmakers to provide assistance to state and local governments which have seen revenues plummet because of the economic shutdown.
How bad is the fiscal crisis for state governments?
According to a recent report from the Department of Treasury, Office of Inspector General (OIG) the “crisis” might not be as bad as people think.
Why? OIG found that many states are sitting on and not spending CARES money. The report documents reported spending from states as of June 30. For example, according to the OIG:
- In Minnesota, officials continue to ask for more Federal dollars even though OIG found that state spent only 1.3 percent of the $2.1 billion in CARES funding allocated to the state.
- Likewise, New Jersey received $3.4 billion and has spent only 4.7 percent of CARES funding.
So, what about North Carolina? The OIG report says North Carolina received more than $4.06 billion in CARES Act funding but has only spent about $358 million or about 8.8 percent of the total distributed to the state.
Why is the state not spending the money? With so many businesses and individuals suffering from the pandemic it’s difficult to understand why the money is not being spent.
Interestingly, in Governor Cooper’s July 16th letter he does note that “About 15 percent of our CRF allocation has not yet been appropriated.” That’s about $609 million.
Cooper notes that of the $4.06 billion North Carolina received, $482 million was set aside for large local governments with populations of 500,000 or greater, $300 million was appropriated to counties, $259 million went to education relief, and $269 million for public health. That totals to $1.31 billion.
The governor adds that North Carolina is setting aside $300 million also for transportation needs with hopes that Congress will allow additional flexibility to use funding for those purposes. New total: $1.61 billion.
There are some noticeable discrepancies between the OIG report and what Cooper has reported being spent. The difference may be a matter of timing in the reporting, or other factors. Either way, the amount spent thus far is nowhere near the $4.06 billion North Carolina received.
More money? If these developments are true, I would be very hesitant to provide any additional funds. The governor has been slow to implement measures to control state spending and slow to distribute Covid relief funding, hoping the feds relax restrictions.
Civitas reached out to the governor’s office for comment. As of this writing, we have not received a response.
