The State of West Virginia just received $677,744,994 from the federal government, so where does the money go?
Until these dollars are ready to be spent, the funds will be deposited with the state Board of Treasury Investments, which manages short-term investment pools for state and local governments, according to the state Treasurer’s Office.
“As we do with all state operating funds, we’ll responsibly manage it to ensure it generates interest and is protected against inflationary pressures until it is ready to be used,” state Treasurer Riley Moore said in response to MetroNews questions about where the millions reside until decisions are made about how to spend it.
This week’s influx of federal money was from the American Rescue Plan Act passed by Congress in March. Overall, the State of West Virginia is receiving $1.355 billion with the second allotment coming in about a year. Local governments are also receiving millions of dollars.
The U.S. Treasury last week did announce preparations to distribute American Rescue Act funds in the coming weeks. “However our Office did not receive specific notice of the timing until the funds showed up in our accounts,” noted Jared Hunt, spokesman for the state Treasurer’s Office.
According to the U.S. Treasury guidance, West Virginia should receive its second allocation of funds sometime within the next 12 months, resulting in the full amount of $1.355 billion.
Guidance from the U.S. Treasury says the money may be used to support public health expenditures, address negative economic effects of the covid-19 pandemic, replace lost public sector revenue, provide premium pay for essential workers and invest in water, sewer and broadband infrastructure.
“Within these overall categories, recipients have broad flexibility to decide how best to use this funding to meet the needs of their communities,” Treasury wrote in its guidance.
Gov. Jim Justice on Monday said those are all among West Virginia’s needs.
“Will there be dollars that go to broadband? Will there be dollars that go to backfill revenue? Will there be dollars that go to infrastructure? All that is — and I don’t mean this in a smart aleck way — that goes back to ‘Do you like your eggs scrambled or fried?’ and the answer is ‘yes.
“What we’ve seen so far, the regulations on how you can dispense and use the money have even been relaxed a little more.”
The governor said his staff has been working on strategic ways to target the money, and he alluded to working with the Legislature on its allocation.
Legislators passed a bill this past session to clarify their responsibility to allocate unanticipated revenue in excess of $150 million.
West Virginia still has $602,544,125 remaining in federal CARES Act funds, according to the state Auditor’s transparency site.
Justice and other state officials have said they plan to use that money to pay for unemployment insurance. Right now, the state has been using a zero-interest federal loan to pay for that. When the loan comes due next September, the plan is for the state to use then pay off the loan on the strength of the remaining CARES Act money.
A lack of legislative appropriation of that money drew criticism for months from delegates and prompted passage of the new law requiring legislative participation.
The most likely time for legislators to gather and provide oversight for spending from the American Rescue Plan is during interim meetings already scheduled for June 6, 7 and 8.
When money like the $677 million from the American Rescue Plan comes to the state, it is not deposited in local banks. Instead, investment managers UBS and Federated will search the open market for the best available money market rates and will select where to place the dollars based on the best available options, taking into account investment ratings and other criteria.
A list detailing the various holdings in the West Virginia Money Market Pool is available with the state.
After July 6, the board will also be able to take advantage of Senate Bill 297, which modernized the board’s investment options, allowing it to invest more in higher-interest generating investment and providing a greater return on agencies’ short-term cash – including these federal funds.
Separately from what came to state government, counties and municipalities are receiving millions of dollars. They have the option of investing funds either with the state’s Board of Treasury Investments until it’s ready to be spent or the money may be placed with local banks.
Kanawha County was among the local governments receiving millions of dollars this week. In Kanawha’s case, that was a little more than $17 million.
“The ARP funds represent a tremendous opportunity for Kanawha County. We will make sure these funds are used exactly how they were intended — to address the hardships caused by the COVID-19 pandemic and to make sure Kanawha County has a strong and lasting recovery,” said Kanawha Commissioner Ben Salango.
State Auditor J.B. McCuskey has been participating in information sessions across the state for local governments, along with U.S. Senator Joe Manchin.
The Auditor’s transparency website is being updated to include information about how American Rescue Plan funds are being used at the state and local level.
“We believe the best way to hold government officials accountable is to provide taxpayers with real-time transparent data about their spending,” McCuskey said.