Last week there were reports that several Republican-led state governments had planned to use all of the covid relief money they received to pay for — no surprise here — tax cuts. At the last minute, the Senate added language to the bill to stop that.
The state relief primarily is intended to make up for revenue shortfalls caused by the pandemic, so that state employees don’t have to be laid off or programs cut. “Some $350 billion will be divvied up between the 50 states, D.C. and the territories, funds meant to backstop state and local government programs and to pay for capital investments,” it says here.
Of course, if it so happens the state’s finances aren’t in that bad a shape, they could always use the money in some way to directly help their own citizens, perhaps by providing more food or housing assistance. Or they could use the money to help small businesses stay afloat a bit longer. They can spend it on a lot of things.
Under the new law, $25 billion will be divided equally among states, while $169 billion will be allocated based on a state’s unemployment rate. States can use the money for pandemic-related costs, offsetting lost revenues to provide essential government services, and for water, sewer and broadband infrastructure projects.
But no, Republicans want tax cuts. And they are furious that the law won’t allow them to use the covid money to pay for tax cuts by “legislation, regulation or administration” through 2024. They also can’t deposit the money into pension funds. And they are pissed.
Senator Mike Braun, Republican of Indiana, introduced legislation to reverse it.
“Democrats are trying to ban states from cutting taxes with a sneaky amendment to the $1.9 trillion so-called Covid relief package,” Mr. Braun said. “Not only did this blue-state bailout bill penalize states for reopening by calculating state funds based on unemployment, now they are trying to use it as a back door to ban states from cutting taxes.”
If it’s a “blue state bailout” bill, then how come red states are getting money, too?
There is one other way the red states can waste the covid money, a means discovered by Missouri Governor Mike Parsons. They can refuse to spend it at all. They could pile it up under mattresses or use bags of cash for doorstops. Anything but put it into circulation.
Missourians should have good reason to cheer because around $5 billion is now heading the state’s way from the new $1.9 trillion coronavirus rescue package signed by President Joe Biden. In reality, it remains to be seen where that money will go — if it goes anywhere. Gov. Mike Parson seems unprepared to think creatively and proactively no matter how much the extra infusion is needed to get Missourians back on their feet. Parson has yet to disburse at least $820 million out of the federal relief funds the state received nearly a year ago.
Money that can and should go toward helping schools, corrections facilities, public safety agencies and economic development programs cope with pandemic turmoil is, instead, sitting on the table doing nothing. State Auditor Nicole Galloway reported last week that Parson had failed to disburse about $1.4 billion as of Jan. 31.
One cannot underestimate the incompetence of Gov. Mike Parson.
He had a plan last summer to spend $15 million of the covid funds promoting tourism. This was during a time in which several states were imposing quarantines on out of state visitors.
State Economic Director Rob Dixon called the tourism marketing a necessary boost to the state economy with more than 40 percent of Americans saying they do not plan to travel for the remainder of the year.
Um, let’s not make sense or anything.
“This is a new normal for the world economy. It’s a new normal for our state’s economy, and we’re going to have to go about doing business with the virus around us,” he said, according to the Star.
The Kansas City Star editorial board had some choice things to say about the tourism promotion plan. It’s not clear to me if the plan was implemented, though.
I have little faith the $5 billion coming to Missouri will be spent in any way that will do anyone any good. I’ll try to keep watch and let you know. And it’s very likely a lot of red states will manage to piss the money off, somehow.