An 11th-hour reprieve is contained in the $900 billion coronavirus stimulus bill that extends a Dec. 30 deadline for West Virginia to spend $1.25 billion in federal CARES Act funds. Even with that extension, Gov. Jim Justice said he is confident that all but $30-$39 million of the funds will be spent by year’s end.
“You can rest assured the dollars will be spent,” Justice said at the state COVID-19 briefing on Monday.
That’s despite having a balance of $751.3 million in the CARES Act account as of Monday, according to the State Auditor’s Office.
At the Friday COVID-19 briefing, Justice and Revenue Secretary Dave Hardy provided details on how the funds will be expended in the final days of 2020. The largest item, $445.7 million, will go to pay unemployment compensation benefits and to create a $315 million balance in the state’s Unemployment Compensation Trust Fund.
That has been a priority for Justice during the pandemic, since, if the fund runs out of money, the government would have to increase the state unemployment compensation tax. That is a tax on employers that is as low as 1.5% of the first $12,000 of wages for employers that don’t have a history of frequent employee layoffs.
Another $130 million of that amount will be used to repay an interest-free federal loan for unemployment benefits this year, a loan that Hardy said will begin to accrue a 2.4% interest rate if not fully repaid by Dec. 31.
Hardy noted that unemployment compensation benefits have topped $500 million this year. He said it is important to keep a significant amount of money in the trust fund, since high COVID-19 unemployment is expected to continue into 2021.
“We are projecting [that], next year, we will still have a very large amount of unemployment benefits for January, February, and March,” he said.
The second-largest block of payments is $265 million paid to cities and counties as reimbursement for their COVID-19 expenses and revenue losses.
That’s followed by reimbursement of state expenses, totaling $240 million.
Other major payments include:
- $74 million to the Department of Health and Human Resources for COVID-19 testing and personal protective equipment. Hardy said 75% to 80% of the more than 1.4 million tests conducted statewide to date have been paid for by the DHHR, and he stressed the high cost of that testing.
According to the State Auditor’s Office, the government paid Vault Health $3.75 million in December for an at-home testing program. That was under a program the Justice administration cancelled on Dec. 10, after eight days of operation, citing high costs, and a built-in lag time in having test kits mailed to residents and then mailed back to Vault labs.
- $50 million for construction of “Medical Access Highways.” According to the Auditor’s Office, that amount was transferred to the Division of Highways on June 23 — the largest single expenditure from the CARES Act account to date.
In July, attorneys for the Charleston law firm Bailey & Glasser advised the administration to take a “cautious” and “prudent” approach to using CARES Act funds for highways construction and repairs, given the potential that the U.S. Treasury could rule that the projects are nonpermissible uses of the federal funds.
Through Dec. 20, the Governor’s Office has paid Bailey & Glasser $160,939, according to the Auditor’s Office.
In addition to providing legal advice on CARES Act appropriations, the law firm has represented the Governor’s Office — in place of the attorney general — in legal challenges to Justice’s executive orders restricting high school sports and extracurricular activities in higher-risk COVID-19 counties.
- $40 million to reimburse the West Virginia National Guard for expenses incurred during the Guard’s pandemic response.
- $32.7 million for broadband expansion, with the state’s inadequate broadband internet network further exposed during the pandemic, as Hardy noted.
“There are a lot of issues with tele-teaching and tele-work,” he said.
- $30 million for small-business grants. Justice originally set aside $150 million in CARES Act funds for the grants, in denominations of $2,000 or $5,000 based on size of the business, but many small-business owners cited an overly complicated vetting process to apply for the loans.
- $16.5 million to public utilities to cover delinquent utility payments incurred by customers between March 1 and July 31. Justice had initially set aside $25 million for the payment assistance program.
According to the Auditor’s Office, the largest payments to date under the program include $7.37 million to Appalachian Power and $3.34 million to Mon Power.