CHARLESTON — Gov. Jim Justice submitted a bill meant to transfer $678 million in federal American Rescue Plan dollars to state development funds.
Not everybody thinks that’s a great idea.
House Bill 2883 calls for $500 million to be transferred to the state Economic Development Authority, a $177 million transfer to the state Water Development Authority and another $1 million to be transferred to Marshall University.
Twenty-one people spoke against the transfer during a public hearing at the state Capitol on Thursday. All said there are more urgent uses for the money, and several contended such a transfer would be against the spirit and the letter of the federal COVID relief funding.
“Frankly, I believe the approach in today’s bill, 2883, is placing a pretty risky $500 million roulette wheel bet with federal funds,” said attorney Bruce Perrone at the public hearing at the state Capitol about the bill and making specific reference the money that would be transferred to the EDA.
“If the Department of Treasury does not accept that that is a permissible use, handing $500 million to the economic development authority, then the State of West Virginia, all of our taxpayers, will be on the hook for every dollar of that.”
Guidance from U.S. Department of Treasury questions the use of the federal relief funds for economic development.
“Generally, no,” Treasury wrote. “General economic development — activities that do not respond to negative economic impacts of the pandemic but rather seek to more generally enhance the jurisdiction’s business climate — would generally not be eligible under this eligible use category.”
Many of the speakers at the Capitol contended the federal money should be directed elsewhere.
One was state Agriculture Commissioner Kent Leonhardt, a Republican.
“With this bill, it seems like we continue to spend taxpayer dollars on buying jobs when we don’t have the workforce in place for the jobs we have already purchased,” Leonhardt said. “We should now simultaneously build and repair our infrastructure that supports and maintains our current industries.”
He made a pitch for $74 million in investment in new laboratories for the agriculture department to replace the current ones “in crumbling and crowded buildings. We could do more with new facilities.”
Another speaker, Gary Zuckett of West Virginia Citizen Action Group, said he agrees with the agriculture commissioner “that we need to invest in our workforce here in West Virginia, at the local level, at the county level.”
Zuckett questioned whether state officials have taken public participation seriously. “Is the best use a $500 million slush fund for the state development office? We advocate this funding should be used to address the real needs of communities left out of development plans.”
Crystal Good, publisher of Black by God, also said the money could better benefit people’s lives if used differently.
“ARPA funds are intended to go to those communities most impacted by the pandemic and those who face longstanding economic health disparities,” Good said. “The governor’s proposal to send most of our state’s remaining ARPA funds to economic development does not meet those goals.
“The remaining funds should go to meeting the needs of West Virginia families instead of sending money to more big corporations through economic development project funds.”
Good, like other speakers questioned what happened to work already done by the Herbert Henderson Office of Minority Affairs to assess community needs that could be met with the federal funding. Good said lawmakers should ask to see the final report.
The Rev. Matthew Watts of Charleston has been advocating for distribution of $300 million in federal dollars to local communities, which then could work with nonprofit agencies to meet the needs of vulnerable citizens. Under this framework, the money would be distributed based on the communities’ respective percentage of the total people living in poverty.
“The 300,000 poor people in this state are the people that we have. We cannot continue to ignore them as irrelevant and inconsequential. This state cannot move forward unless we invest in those people,” he said.
The American Rescue Plan still represents a historic opportunity to invest in communities that were hardest hit by the pandemic and those facing longstanding economic and racial inequities, said Kelly Allen, executive director of the West Virginia Center on Budget & Policy.
But she said the supplemental appropriations bill would not achieve those goals, contrary to the Treasury guidance.
“To members of the House Finance committee, we thank you for taking this step today to allow the most public input that has been allowed as part of this process today. It’s entirely possible that you were not aware of the strings and requirements attached to this money or of the public input that should be part of the allocation of these dollars,” Allen said.
“We are simply urging you to slow down, engage constituents on their priorities for this funding, and ensure that any expenditures of our remaining ARPA funds prioritize communities that have faced longstanding inequities.”
Another examination of West Virginia’s use of federal dollars is set for today when the Senate Finance Committee takes a closer look at a transfer of the remaining $28 million in COVID relief funds to the Governor’s Office Gifts, Grants and Donations Fund.
In announcing the hearing on the Senate floor, Tarr made reference to the use of millions of dollars from that transfer for construction of Marshall University’s new baseball field.
“So, there’s been a lot of questions around how all that happened,” Tarr said, “and we’re going to try to sort through all that.”
