Oklahoma is about to go on a multi-billion spending spree — however there’s a catch, truly a number of.
Oklahoma, like different states, has already dolled out lots of of tens of millions of federal {dollars} on COVID-19 response efforts by Coronavirus Support, Reduction, and Financial Safety Act (CARES) funding that was accredited by Congress final 12 months.
State leaders, nonetheless, have one other reservoir of cash to spend due to a brand new reduction package deal — the American Rescue Plan Act — that President Joe Biden signed into legislation in March.
The brand new legislation will ship about $1.9 billion in direct funds to the state together with a number of hundred million extra going out to cities, counties and smaller communities.
“This is a chance for the state of Oklahoma with an sum of money we have now by no means seen earlier than,” mentioned Rep. Kevin Wallace, R-Wellston.
However as lawmakers start to look to the general public for steering, there are tight restrictions on the place the cash may be spent, when it may be spent and who authorizes the spending. After the Legislature’s newly shaped Joint Committee on Pandemic Reduction Funding met for the primary time Wednesday, right here’s a have a look at the primary questions surrounding the cash.
How A lot Does Oklahoma Should Spend?
The American Rescue Plan will ship $350 billion to states, native governments and tribes.
Based mostly on a system that largely takes under consideration states’ unemployment inhabitants, Oklahoma will obtain $1.87 billion.
As well as, Oklahoma’s 77 counties will break up $728 million, the ten largest cities will obtain a complete of $315 million and smaller cities and cities (below 50,000 inhabitants) — categorized by the federal authorities as “non-entitlement customers” — will obtain $238 million.
The state will determine the right way to spend the cash for the smaller cities.
The federal authorities may also present $20 billion to assist tribal governments throughout the nation. It hasn’t been determined how that cash will probably be break up up.
When Does the State Should Spend It?
Policymakers may have a while to weigh their choices.
Melissa Houston, a former Oklahoma labor commissioner and proprietor of 929 Methods who’s consulting on the work, mentioned lawmakers and the governor should determine the right way to spend the cash by the top of 2024 and spend it by the top of 2026.
With such a big pot of cash and with the prospect of presumably pooling funds with native governments to fund bigger tasks, Houston mentioned it’s vital that officers begin the work now.
“It’s necessary to assume long run as a result of these funds are long-term funds,” she mentioned. “This isn’t like CARES {dollars} that should exit the door tomorrow.”
What Can They Spend it On?
Though federal pointers are comparatively broad, officers will probably be restricted on the right way to spend the cash.
In keeping with the U.S. Division of Treasury, allowed makes use of embody:
- Supporting public well being, equivalent to funding COVID-19 mitigation efforts, medical bills, behavioral healthcare and sure public well being and security workers.
- Addressing unfavorable financial impacts attributable to the general public well being emergency, together with financial harms to employees, households, small companies, impacted industries and the general public sector.
- Changing misplaced public sector income, utilizing this funding to supply authorities companies to the extent of the discount in income skilled because of the pandemic.
- Offering premium pay for important employees, providing extra assist to those that have and can bear the best well being dangers due to their service in vital infrastructure sectors.
- Investing in water, sewer, and broadband infrastructure, making mandatory investments to enhance entry to scrub consuming water, assist very important wastewater and stormwater infrastructure, and to broaden entry to broadband web.
Houston mentioned states can’t use the cash to fund pension plans, construct up reserve or rainy-day accounts, finance debt or use it to leverage extra federal funds.
States are additionally banned most often from utilizing the federal funds on tax cuts. A variety of states, nonetheless, are difficult that restriction in court docket.
Houston mentioned tasks additionally should be focused and measurable so the outcomes may be audited.
“We’re going to have outcomes we are attempting to attain and outputs that we’re measuring,” she mentioned. “So for those who’re speaking about broadband, it’s not sufficient to say, ‘the aim is broadband.’
There’s one other catch too: Due to a invoice handed this session, state businesses can’t use federal pandemic reduction funds in ways in which develop the necessity for future state {dollars} as soon as federal funds are spent except it’s particularly accredited by the Legislature.
This implies any sort of spending that commits the state to spend extra in future years, equivalent to paying for pay raises or funding a challenge that carries important ongoing bills, can’t be included, except the Legislature passes a legislation permitting the state to take action.
Who Determines
Just like how CARES funds had been spent, Gov. Kevin Stitt may have the ultimate say on how the funds are spent. However this time lawmakers made positive they might be a minimum of a part of the dialogue on the right way to use the federal funds.
The Legislature shaped the 24-member Joint Committee on Pandemic Reduction Funding to develop an inventory of suggestions. That committee will then ahead its suggestions to a bunch of six legislators and 5 govt department officers who consider and rank for Stitt to think about.
The 24-member legislative committee is made up of 12 Senate members and 12 Home members. 4 Democrats are on the committee whereas Republicans, who maintain supermajorites in each chambers, make up the remaining.
The 2 chambers’ respective funds chairmen, Rep. Kevin Wallace, R-Wellston and Sen. Roger Thompson, R-Okemah, are heading the committee.
There are additionally 4 subcommittee’s that can assessment and compile the proposals:
- Financial Improvement and Workforce (Co-Chairs: Sen. Adam Pugh, R-Edmond, and Rep. Rhonda Baker, R-Yukon)
- Well being and Human Companies (Co-Chairs: Sen. John Haste, R-Damaged Arrow, and Rep. Kyle Hilbert, R-Depew)
- Authorities Transformation and Collaboration (Co-Chairs: Sen. Chuck Corridor, R-Perry, and Rep. Jeff Boatman, R-Tulsa)
- Transportation, Infrastructure, and Rural Improvement (Co-Chairs: Sen. James Leewright, R-Bristow, and Rep. Logan Phillips, R-Mounds)
Will the Public Get a Say?
Houston mentioned the committee plans to work with varied stakeholders throughout the federal government, personal enterprise, non-profit organizations and others to give you proposals after which vet and rank these proposals.
She mentioned an internet kind will probably be made accessible in August for public enter.
What Form of Initiatives Would possibly Be Thought of?
Lawmakers didn’t get into discussing particular tasks and even broad priorities throughout the assembly Wednesday.
Stitt, nonetheless, despatched the panel a letter earlier within the week outlining his philosophy on the place the cash ought to go.
“As states recuperate from the devastating impacts of COVID-19, Oklahoma is uniquely positioned to not solely return to regular, however to forge boldly forward,” Stitt wrote. “We’ve this chance, partly, resulting from considerate choices made throughout the pandemic by our state leaders who centered on protecting companies open and Oklahomans employed.”
The governor went on to say that he desires to “make strategic, one-time investments that can profit future generations whereas bettering companies in the present day.”
He particularly mentioned his priorities embody:
- Creating, retaining, and attracting prime expertise to shut vital ability gaps and stimulate innovation.
- Leveraging personal and native co-investment alternatives by strategic authorities funding.
- Enabling high-growth enterprise clusters by infrastructure investments.
- Making a “greatest at school” buyer expertise with a human-centered, mobile-first interface for presidency companies;
- Bridging the digital divide to make sure all Oklahomans entry assist and alternatives.
- Elevating complete social service packages with a deal with susceptible populations.
“With this chance comes an excellent accountability,” he ended his letter. “The tasks and packages we fund in the present day will impression future generations throughout the state.”
Trevor Brown has been an Oklahoma Watch reporter since 2016. He covers politics, elections, well being insurance policies and authorities accountability points. Name or textual content him at (630) 301-0589. Electronic mail him at [email protected]. Comply with him on Twitter at @tbrownokc
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