$1.8 billion budgeted in RI for COVID-19 response so far

Politics - Government

PROVIDENCE, R.I. (WPRI) — The state of Rhode Island has now budgeted more than $1.8 billion to cover costs associated with the COVID-19 pandemic, ranging from supplies and tests to financial assistance for local hospitals, officials revealed Thursday.

Staff from the R.I. Office of Management and Budget (OMB) laid out the latest updated figures on the state’s expenses tied to the crisis during a Senate Finance Committee hearing that lasted roughly two-and-a-half hours.

Rhode Island’s COVID-19 spending estimate has grown steadily each time Raimondo administration officials have given an update to the legislature, from $881 million in August to $1.7 billion in November and now $1.8 billion in January. To put those numbers in perspective, the annual state budget totaled about $10 billion pre-crisis.

Out of the latest total, $1.1 billion has actually been spent and $329 million has been “encumbered,” meaning allocated but not yet paid out. The remaining $364 million has been budgeted based on an estimate of future spending, but officials acknowledged there is significant uncertainty around the numbers due to the unpredictable nature of the pandemic.

The update comes as Gov. Gina Raimondo is preparing to leave office to become U.S. commerce secretary. If confirmed by the U.S. Senate, Raimondo would be replaced by Lt. Gov. Dan McKee, whose initial to-do list would include submitting a proposed 2021-22 budget to the General Assembly by early March — a plan that will be affected significantly by the complexities of coronavirus costs.

Senate Finance Committee Chairman Ryan Pearson, a Cumberland Democrat who was leading his first hearing since taking over the panel, indicated lawmakers plan to be more involved in directing how coronavirus money is spent this year after largely taking a backseat to the governor in 2020.

That could include multiple supplemental — that is, revised midyear — budgets. “We’ll do as many supplementals as we need to given there’s probably likely another stimulus package coming,” Pearson said. Changes will also be necessitated to incorporate new money Congress authorized last month, he added.

Budget officials broke down the state’s pandemic-related spending into 20 different categories.

The largest is $474 million directed to “Other Expenses,” which includes $276 million in state payroll costs for public health and public safety workers that were eligible to be covered through the CARES Act Coronavirus Relief Fund, as well as $198 million directed to municipalities and schools.

The next-largest categories of spending were $221 million for the Hospital Assistance Partnership Program, which provided grants to local hospitals; $143 million for “business and workforce readiness,” including the Restore RI, Back to Work RI and HArT (hospitality, arts and tourism) programs; $118 million for two categories of education funding; and $110 million for individuals and businesses affected by the three-week “pause” in reopening after Thanksgiving.

On the other side of the ledger, OMB officials estimated the state has qualified for a similar total of federal coronavirus funding — $1.8 billion — but warned in a presentation that “not all funding can be fully directed to identified response activities” since some comes with strings attached. It’s unclear how large the gap is.

By far the largest chunk of federal money Rhode Island has received is its $1.25 billion allocation through the Coronavirus Relief Fund, a pot of money given to all 50 states under the CARES Act that has been the subject of considerable discussion. Congress recently extended the deadline for spending the Coronavirus Relief Fund money until the end of 2021, though Raimondo had previously said she thinks nearly all of the $1.25 billion had been allocated.

The state is also being aggressive in seeking reimbursement for coronavirus expenses from FEMA under the Stafford Act, the law that governs federal funding for disaster relief. FEMA has agreed to cover $95 million in costs so far, with another $11 million pending, which OMB said is significantly more per capita than FEMA has provided to the other New England states so far. (The state is required to match one dollar for every three that FEMA spends.)

Separately on Thursday, President Biden signed an executive order increasing from 75% to 100% the share of state costs that FEMA will reimburse “for National Guard personnel and emergency supplies, such as PPE, cleaning and sanitizing efforts, and the personnel and equipment needed to create vaccination centers,” according to U.S. Sen. Jack Reed’s office.

A number of targeted federal grants totaling $261 million have also been awarded to Rhode Island for specific activities related to the pandemic, such as testing and vaccine distribution. In addition, the 2020-21 state budget, enacted in December, included $106 million in state-level revenue that is going toward the coronavirus expenses laid out by OMB on Thursday.

Senators on the Finance Committee peppered administration officials with questions about the coronavirus spending and the broader effort to fight the pandemic, including the slow rollout of vaccines to the general public. The answers often emphasized the uncertainty surrounding all the spending estimates due to a lack of visibility into how long the pandemic is going to last, as well as the ways various flows of federal funding do and don’t overlap.

The update from the Raimondo administration came a week after Rhode Island’s auditor general, Dennis Hoyle, released his own overview of how much federal COVID-19 money was spent by the state through June 30, during the early months of the crisis.

Hoyle pegged the total at $1.5 billion, roughly $1 billion of which was federal unemployment money tied to the $600 weekly bonus and other enhancements. While those benefits were fully federally funded, for accounting purposes they flowed through the state budget because they were distributed by the R.I. Department of Labor and Training.

Hoyle also estimated the state had spent $267 million of the $1.25 billion in Coronavirus Relief Fund money through June 30.

Ted Nesi (tnesi@wpri.com) is a Target 12 investigative reporter and 12 News politics/business editor. He co-hosts Newsmakers and writes Nesi’s Notes on Saturdays. Connect with him on Twitter, Facebook, LinkedIn and Instagram

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