Justice still eyes use of $1.25 billion federal dollars, while Capito pushes for more flexibility

Gov. Jim Justice is still seeking clarity on whether West Virginia can use $1.25 billion in federal funding to backfill revenue lost as West Virginia instituted coronavirus precautions.

Meanwhile, Senator Shelley Moore Capito, R-W.Va., is touting bipartisan sponsorship of a bill meant to give cities and states greater flexibility with covid-19 relief funds.

Capito joined with senators Dan Sullivan, R-Alaska, Sheldon Whitehouse, D-R.I., Lisa Murkowski, R-Alaska, Angus King, I-Maine, and Kevin Cramer, R-N.D., to sponsor the Coronavirus Relief Fund Flexibility Act.

The bill is meant to be used to replace revenue shortfalls resulting from the pandemic. The legislation would apply retroactively to the enactment of the CARES Act that passed last month.

Capito said the legislation is a direct response to conversations she has had with Justice and others.

Shelley Moore Capito

“Throughout this pandemic, I’ve been in regular contact with Governor Justice, county commissioners, mayors and other state and local officials about the challenges they are facing in these uncertain times,” Capito stated.

“One of those challenges is the lost revenue that the state, counties, and cities are experiencing because of this emergency, which has caused a real strain on their budgets.”

She called the bill a commonsense solution to give state and local governments flexibility to use money that has been appropriated already.

“Doing so will help state and local governments in West Virginia and across the country get over the hump of lost revenue and allow them to continue providing the essential services,” Capito said.

The CARES Act provided $150 billion to the states, but the U.S. Department of Treasury last month interpreted it to be only for the direct expenses of coronavirus response or secondary expenses of supporting businesses and individual suffering economic effects of the response.

“Funds may not be used to fill shortfalls in government revenue to cover expenditures that would not otherwise qualify under the statute,” wrote the treasury department.

Capito said the Coronavirus Relief Fund Flexibility Act aims to clarify the matter.

Jason Huffman

Americans for Prosperity-West Virginia, a libertarian-leaning lobbying organization, put out a statement today that relying on a federal bailout would be reckless.

The organization also warned against tax increases and instead said the state should begin looking at cuts to the state budget.

“Policymakers in West Virginia cannot afford to sit idly by,” stated Jason Huffman, director of Americans for Prosperity-West Virginia.

“Now is the time for Governor Justice and lawmakers to forge a bold, fiscally responsible path forward that safeguards our citizens and creates the conditions for a new, stronger West Virginia economy. That starts with substantially reducing non-essential state spending and ensuring government stays within its means, as every West Virginia family is doing.”

Justice, during a news briefing Thursday afternoon, said he remains confident that West Virginia will be able to use federal dollars to meet expenses.

State revenue leaders have described a possible $500 million budget hole by the end of the fiscal year.

Officials last week announced that collections for April had come in $192 million under projections.

Asked during the press conference how the state intends to spend the federal dollars that are already on hand, Justice initially responded “We’d be here for hours to try to adequately answer the question.”

Justice says he is regularly meeting with revenue team in addition to talking to consulting agencies.

“I’m trying to ensure our state is backfilled lost dollars that we lost because of this terrible tragedy,” he said. “I’m trying to avoid this state taking a cannonball to the stomach.”

His ultimate goal, the governor said, is to be able to use the $1.25 billion along with additional sources of action.

Justice again said he thinks that will be possible soon with congressional action.

“I really believe we’re going to know real live rules that we can act on,” he said.

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