Joplin officials say they have big plans for $13.8 million in pandemic relief the tornado-devastated southwest Missouri city received under a two-year-old federal law. But the latest federal filings show that none of the money was spent — or even budgeted.
About 6,300 cities and counties — nearly one in four across the country — reported no spending this spring, according to an Associated Press analysis of data released by the US Treasury Department. Approximately 5,100 of them did not list any projects – neither planned nor in progress.
So what’s up? Isn’t the money needed? Do cities just sit on it?
Local and federal officials told the AP in interviews that the publicly available data is misleading — riddled with differing interpretations of exactly what needs to be reported, delays in timeliness and the omission of some preliminary plans. Critics claim this is an indication of a flawed response to the pandemic.
Federal officials estimate that governments have spending commitments for more than 80% of the funds, although that’s difficult to deduce from their reporting requirements.
Joplin, for example, plans to spend its pandemic aid on housing projects, high-speed internet, roads, a bike park, public safety equipment, and more. City council approved the plan last month. But it won’t show up in federal reports until October.
The city, which was devastated by one of the deadliest tornadoes in U.S. history in 2011, deliberately developed “truly transformative projects” with its pandemic relief efforts, said Leslie Haase, the city’s finance director.
In recent years, the company has used pandemic relief to rake in millions of additional dollars from government grants. The pooled funds plan to restart a phased-out post-tornado program that helps people make down payments on homes. The city also plans to spend millions of dollars repairing or demolishing old homes.
“I think by 2026, Joplin will be a better community,” Haase said.
America’s $1.9 trillion bailout plan — passed by a Democratic-led Congress in 2021 and signed by President Joe Biden — included $350 billion in flexible aid for states, territories, tribes, counties, cities and towns. The Biden administration says the money is intended to provide both immediate relief during a health crisis and a longer-term boost for communities.
Governments must commit this money to projects by the end of next year and spend it by the end of 2026.
According to the AP analysis, at the time of its April reports, more than 26,500 governments had collectively spent 43% of their funds and approved plans to spend 77% of the money.
The actual amount of spending commitments is likely well over 80%, allowing for delays and different reporting approaches by local governments, said Gene Sperling, the US Bailout’s White House coordinator
“What you’re seeing across the country is that counties, cities and states have overwhelmingly committed these funds, are using them and are on track to meet their statutory deadlines to have all funds committed by the end of 2024,” Sperling said.
But Republicans and fiscal conservatives have questioned the need for spending, noting that most states recovered quickly from an initial tax dip during the pandemic and posted large budget surpluses.
“Even though the left claimed their $2 trillion law was intended to fight Covid, they were wasting hundreds of billions of Americans’ hard-earned taxpayer dollars on ridiculous things,” said Republican US Representative Jason Smith, chairman of the Ways and Means Committee of the House of Representatives in a statement to the AP.
The money has funded a luxury hotel in Florida, a minor-league ballpark in New York and prisons in Alabama, among other things — provoking outrage from some congressmen.
Some governments waited to do anything with the money until the Treasury finalized its rules in April 2022. Details are missing on how some governments are using their funds, as the Treasury Department has eased reporting requirements for any money categorized by state or local officials as a substitute for lost profits.
According to the AP’s analysis, more than 6,000 local governments classified all of their federal grants as “revenue replacement” — often taking advantage of a Treasury Department rule that allows for a deemed loss of revenue of up to $10 million without proof.
Although they can provide more details if needed, governments that categorize all of their federal aid as replacement revenue need only report it as one project, the Treasury Department told the AP.
But some didn’t even do that.
The Denver suburb of Lakewood, Colorado claimed its entire allotment of $21.6 million in revenue replacement as it drew on reserves to pay police during the pandemic. No projects were reported.
But federal aid has helped the city build sidewalks, replace computer software, upgrade police radio systems, and make fire and safety improvements at a community center, among other things, said Holly Bjorklund, Lakewood’s chief financial officer.
These are “essential things that really needed to be done and that would cost more if we waited longer to tackle them,” she said.
The capital Annapolis in Maryland also did not describe any projects in its April report. But Annapolis has already used $1.2 million of its $7.6 million allotment as revenue replacement for depleted public transit funds, city spokeswoman Mitchelle Stephenson said. More federal aid for city operations is expected to be drawn in the 2024 budget.
The Treasury Department’s guidance on reporting revenue replacement funds used for government services is not entirely clear, said Katie Buckley, director of the Vermont League of Cities and Towns’ federal financial assistance program. But Buckley said she advised local officials to report everything as a government services project and then list what was in it.
Counting federal money as substitute funding for government services shouldn’t relieve local officials from describing what they did with it — even if it was just used for salaries or office supplies, said Sean Moulton, senior policy analyst at the nonprofit Project on Government Oversight.
“That’s taxpayer money, and a lot of it,” Moulton said, adding, “There should be some accountability that comes with it.”
Incorrect reporting has no special consequences. There are also no immediate penalties for non-reporting – although Treasury Department guidance states that “a record of late reporting” could lead to the “development of a corrective action plan or other consequences”.
Ascension Parish, Louisiana, which received $24.6 million, reported no spending or projects through April — despite the parish council approving a project list last year.
A financial tracking document provided by the community to the AP shows that a purchase order for a $1 million improvement project at Youth Legacy Duplessis Park was initiated last October. Materials for the project were delivered in mid-March ahead of the Treasury Department’s reporting deadline. However, most of the community’s other projects were not underway at the time of the April report.
“We haven’t spent a lot of money, but we have a lot of contracts and a lot of design work,” said Patrick Goldsmith, the community’s chief financial officer.
He said the projects should be considered when next quarterly reports are released.
While many governments have made “steady progress” in using pandemic relief funds, some waited until just before the start of their fiscal year in July to approve their spending plans, said Teryn Zmuda, chief economist and research officer for the National Association of Counties.
“We don’t want to rush these funds,” Zmuda said. “While the intention of the Dollars was to respond to the pandemic, it was also very consciously to build your community based on their specific needs.”
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