State and counties slow to spend billions in federal COVID relief

Coronavirus

HONOLULU (KHON2) — As COVID-19 continues to spread, mass layoffs are escalating and more small businesses are closing permanently. Meanwhile, the state and its counties are still sitting on more than $1 billion in federal relief funds. Whatever is not spent over the next several months has to go back to the feds. Always Investigating looks at where the money is and is not going.

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People struggling to pay rent, put food on the table or avoid the escalating spread of the insidious virus may be shocked to hear how much money is still sitting in state and county coffers that is supposed to be out taking care of just such problems.

Out of $1.25 billion given to the state and counties from the CARES Act Coronavirus Relief Fund, just 6.3% — only about $80 million — has actually been spent. Some lawmakers and government watchdogs are baffled.

“The key here is speed,” said U.S. Brian Schatz. “That’s how the CARES Act was designed. That’s the purpose here: to push money out as quickly into the economy as possible. The money has to move at the speed of the virus. People are suffering now.”

The Hawaii Data Collaborative has been tracking every dollar. Their compilation shows that while tens of millions of dollars have been allocated or earmarked for critical needs across public, private, individual, family and business sectors, just a fraction has actually been spent.

“The time to act is now,” said former state Sen. Jill Tokuda, who is helping the collaborative and also serves on the State House COVID-19 CARES Funds Subcommittee, “especially since Coronavirus Relief Funds (CRF) were put out there with the intent to rapidly respond to the kinds of needs and challenges our states are dealing with as a result of the pandemic.”

Besides the $1.25 billion in funds known as CRF, about another $1 billion was awarded in critical categories like health and education, but hundreds of millions of that also remains unspent.

About $7 billion in other types of federal subsidies have helped Hawaii tread water since March, most of it doled out through direct-to-recipient programs like unemployment insurance supplements and the Paycheck Protection Program.

“There are still batches of money, especially the money that’s related specifically to fighting the virus, that is still sitting in accounts and sub accounts,” Schatz said, “and that’s really maddening because we are in the middle of this fight. This is not next year’s money. This is today’s money and it needs to be put on the street.”

Gov. David Ige said Monday he’s weighing how to allocate $321 million in line-item spending he vetoed from the Legislature’s suggested CRF spending plan. Ige says the state is in the process of “exercising contracts” on about $462 million to be distributed to agencies and counties for programs. He says they’re moving carefully due to strict federal terms.

“They have put us on notice several times that they do intend to audit the expenditure of these programs,” Ige said, “so we want to make sure our partners are fully aware of these requirements and make sure we would be able to report back to the federal government about the use of the CARES Act funds that we received.”

The governor’s office provided KHON2 more explanation in a statement, saying: “The executive branch agencies have been working with private-sector partners to provide services and programs as quickly as possible. In the one month since the bill became law, departments have been recruiting, reviewing and contracting with organizations to implement programs or placing orders for supplies, such as PPE. Many of these activities have not yet been invoiced or paid. In addition, the state has provided the second round of funding to the counties to continue the programs being delivered at the county level.”

Always investigating reviewed a federal Inspector General report on all states’ CRF status, which the feds are tracking by costs “incurred.” We found the $150 million Hawaii reported there — or 12% of the pot — is exactly middle of the road at 25th in the nation for the spending pace, though most is incurred from just handing some over to counties.

Contrast that with California, which was able to incur spending of about 75% of its massive $15 billion in CRF by the summer in every single one of the key spending categories, whereas Hawaii incurred zero in many of the same categories. In the time since the Inspector General data was collected, the state has earmarked where it wants tens of millions to go for various departments.

Whatever is not spent by end of December has to go right back to the feds.

“If we don’t make good decisions with the money we have left on how we’re going to be able to continue to bridge people during this difficult time,” Tokuda said, “we’re going to see some catastrophic events as a result of it.”

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