State panel declines to weigh relief funds for teachers

FILE — The state Capitol is shown in this 2019 file photo.

The state panel that recommends the best use of federal coronavirus relief funds balked Wednesday at considering a proposal to make health and safety payments of $500 apiece to public school teachers and staff members.

The 15-member Arkansas Coronavirus Aid, Relief and Economic Security Act steering committee rejected a motion by Sen. Will Bond, D-Little Rock, to add his proposal to the committee's agenda late Wednesday afternoon during its one-hour meeting. Bond estimated his proposal would cost the state about $34.5 million.

Committee Chairwoman Elizabeth Smith ruled that five committee members voted for Bond's motion in a voice vote, while seven members voted against it. The committee, appointed by Republican Gov. Asa Hutchinson, is composed of nine administration officials and six state lawmakers.

Sen. Missy Irvin, R-Mountain View, said the steering committee hasn't voted to reverse its recommendation last month to use $50 million in federal relief funds for the state's unemployment insurance trust fund to mitigate rate increases for employers next year.

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The committee held onto its recommendation for the unemployment fund last week while recommending $50 million for hospital and nursing home costs related to covid-19 after the governor signaled his support for the request, she said.

"Our health care workers and our health care industry is No. 1 for me, and No. 2 for me is small businesses that we told to close their doors," Irvin said. "Because we told them to close their doors, they are going to get [hit with unemployment insurance rate increases next year] because of that second-quarter report for unemployment [claims]."

The steering committee's recommendation to give $50 million to the unemployment insurance fund -- coupled with another $165 million in relief money previously transferred to the fund -- is aimed at mitigating unemployment insurance rate increases for employers next year based on more than $200 million in claims from the second quarter of this year, according to state officials.

Bond said it is appropriate to give each public school teacher and staff member a $500 payment.

He said it was his understanding that the Hutchinson administration was going to consider another option to mitigate unemployment insurance rate increases through an executive order or a change in state law if the $50 million wasn't available.

Bond said his $34.5 million proposal is equal to the Department of Transformation and Shared Services' request for $33.5 million to finance the department's cybersecurity data center modernization plan.

Last month, the steering committee voted to recommend funding the data center request, contingent on Congress extending the period for spending federal coronavirus relief funds beyond the current Dec. 30 deadline and on the availability of these funds.

"The Legislature could sort of [decide] which one to fund if this committee doesn't want to back up from the cybersecurity proposal, which I think should be considered by the Legislature with funds [through] the normal budgeting process," Bond said.

With Bond dissenting, the committee voted to recommend asking the Legislative Council on Dec. 18 for what Smith called "a blanket umbrella-type appropriation for the [unemployment insurance] trust fund in the event we do not have an extension past the Dec. 30 deadline, so we will not be scurrying around and rushing over at the last minute to the [Legislative Council] to be able to sweep last-minute funds to the trust fund."

Afterward, finance department spokesman Scott Hardin said, "The final amount for the appropriation request is yet to be determined" for the unemployment insurance trust fund.

"As the process continues to develop we will have these details. It would be funding that was not utilized," he said in a written statement.

The committee's actions Wednesday came amid uncertainty about whether Congress will extend the period for states to spend federal coronavirus relief funds. Arkansas received $1.25 billion in the relief funds under the CARES Act.

"I think most of us believe there will be [an extension]," said Larry Walther, secretary of the state Department of Finance and Administration.

"But who knows because of what is going on in [Washington] D.C. right now," he said.

The steering committee learned Wednesday that the state has $18.9 million in unallocated relief funds, plus five state agencies will return a total of at least $8.7 million in unspent funds that could be allocated for other purposes.

About $6 million of $150 million allocated to cities and counties hasn't been applied for, said Paul Louthian, deputy for the state Department of Finance and Administration.

The state may get up to $20 million in unspent federal money back from the $150 million allocated to cities and counties, he said. Some cities and counties have failed to submit the required paperwork to get their reimbursements, and the deadline is Tuesday, he said.

In addition, Smith said she also expects the Department of Human Services to return several million dollars in unspent relief funds.

The committee voted to recommend three state agencies be authorized to spend $23.1 million in relief funds past the Dec. 30 deadline, if Congress authorizes states to spend these federal funds next year:

• $12.6 million for the Department of Commerce's Rural Connect broadband program and $3.4 million for the program's administrative expenses.

• $5 million for the Department of Commerce's information technology modernization for the unemployment insurance program.

• $1.3 million for Arkansas PBS.

• $500,000 through the Department of Health for the Northwest Area Council, and $202,000 for the health equity mobile health unit.

The committee also voted to authorize the Department of Commerce to reallocate $2.1 million in relief funds remaining from the Lost Wage Assistance program to the Maximus call center services contract for the unemployment insurance program through the end of this year.

The committee also voted to authorize the Health Department to reallocate $31,000 for 2,000 flu vaccinations through the Northwest Arkansas Council.