MORGANTOWN — Sen. Joe Manchin is introducing a bill – with Democrat and Republican co-sponsors – to aid states, cities and counties cope with the financial crisis sparked by the COVID-19 pandemic.
It’s called the SMART Act – the State and Municipal Assistance for Recovery and Transition Act.
It has two main goals, said Manchin, D-W.Va. One is to allow state and local governments to use existing CARES Act funding to offset revenue shortfalls.
Gov. Jim Justice has often talked about this problem. Current U.S. Treasury guidance on CARES money forbids its use for backfilling shortfalls caused by COVID-related revenue losses. West Virginia is facing a hole of about $500 million, much of it from lost income tax revenue.
The other goal is to provide $500 billion in new direct flexible funding to all state, local and tribal governments. Local monies would have to be distributed within 15 days of arriving in state coffers.
“This is not political. It never has been political,” Manchin said. “The money has to be distributed.”
The $500 billion would be allotted based on a three-part formula: population size, infection rate and revenue losses.
West Virginia would receive the minimum, $2 billion – on top of the $1.25 billion CARES money it already has – and possibly more based on the formula, Manchin said.
Justice and Manchin have been at odds over Justice’s decision to delay distribution of the current $1.25 billion until the rules are finalized. Justice doesn’t want to spend it until he’s sure the state budget can be made whole. Manchin wants to see the part set aside for local governments sent to them.
All states have seen revenue shortfalls, he said. “This will help immensely. … But it’s not an excuse for not disbursing the money that’s already been received.”
It was defined at end of April how CARES money cold be used for CVID-related costs, he said, such as for PPE, children, homelessness.
Justice announced Friday that the state portal for cities and counties to apply for cares money is now open at grants.wv.gov. Manchin commented, “I’m happy it’s being done now.”
Manchin acknowledged, in response to a question, that Treasury could modify it current guidance and allow CARES money for backfilling without the SMART Act legislating it.
Manchin said the Senate won’t be taking up any measures until it resumes work June 1 and if Treasury hasn’t acted by that time, senators will be seeking clarification that states could use up to half their CARES allotments for backfilling.
The Dominion Post asked Sen. Shelley Moore Capito, R-W.Va., for her thoughts on the issue.
In an email statement, she said, “There are a lot of different solutions out there that have been offered to address this problem. One being a bill I introduced earlier this month called the Coronavirus Relief Fund Flexibility Act, which fixes this problem by providing state and local governments with the flexibility to use money that has already been appropriated through the CARES Act to replace these lost revenues.”
The SMART Act provides similar flexibility, she said, but appropriates the additional $500 billion, which she’s not sold on yet. “West Virginia has not yet begun to utilize its $1.25 billion share of the $150 billion Congress has already provided for state and local governments. I think it is more responsible to provide more flexibility for the money Congress has already approved and then consider whether additional funding is needed.”
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