Aid Money Sent To States To Manage Economic Crisis Isn't Going Where It's Needed Much of the billions in federal aid that was sent to states to help with the pandemic's economic fallout didn't go where it was most needed, leaving some hard hit areas struggling with little support.
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Much Of The Stimulus Aid Sent To States Hasn't Gone Where It's Needed Most

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Much Of The Stimulus Aid Sent To States Hasn't Gone Where It's Needed Most

Much Of The Stimulus Aid Sent To States Hasn't Gone Where It's Needed Most

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MARY LOUISE KELLY, HOST:

Cities and towns are being clobbered twice by the coronavirus. There are the costs of keeping a community healthy, and then there are the costs in jobs and business lost. Congress supposedly sent help - about 150 billion in aid. But as NPR's Laura Sullivan reports, confusing rules have kept that money from reaching the places where it's needed.

LAURA SULLIVAN, BYLINE: Kimmswick, Mo., is a small, historic city along the Mississippi River. It's got archeological sites with mastodon bones, Levee High Apple Pie from its famous Blue Owl Restaurant and Phil Stang, its volunteer mayor. What it doesn't have right now is money.

PHIL STANG: How much time does it take to make a road? And I usually say, it depends on how thin you spread it. And that's about where we are with our money.

SULLIVAN: Kimmswick's budget was already stretched after spending $150,000 on last year's historic flooding. Then last weekend's Strawberry Festival got canceled, and the Apple Butter Festival is now in question. And Stang desperately needs $250,000 to keep the city operating.

STANG: I have two choices, I think. I would have to do crazy electronic stuff like GoFundMe pages, start my own lemonade stand, something. The other thing that I've said over and over and over again - I want a grant, and I don't want much with all these trillions and gazillions running around.

SULLIVAN: It's hard to understand why, after Congress sent more than $150 billion to states and cities, that Kimmswick can't get a hold of a couple hundred thousand. But a review shows much of the money has not made it to places that need it most. In some cases, states and counties, which are strapped in their own right, are holding onto the money. Statehouses like Vermont, Mississippi and Alabama are currently locked in heated debates over who gets to spend it. In other cases, complex rules have brought the flow of money to a halt. Stang's County offered to share some federal funding but required the mayor to spend the money first and get paid back later, even for protective equipment.

STANG: Well, whoop-de-do - I haven't got any money to fight the pandemic. My fight off the pandemic is, go in your house, and stay there.

SULLIVAN: Every state got at least $1 1/4 billion and then more based on population. But the money can't be used to fill budget shortfalls. It has to be a COVID expense. So states like Alaska and Montana, with large economic woes but few COVID cases, have to find something to spend it on. At the same time, cities and towns with thousands of COVID cases have been left out altogether. Natasha Love Rogers is the chief operating officer for Newark, N.J.

NATASHA LOVE ROGERS: We have not received any dollars yet. The federal dollars from the CARES Act went to our county.

SULLIVAN: That's because of another rule. Only places with more than 500,000 people can get direct funding from the federal government.

LOVE ROGERS: People will have to be furloughed or laid off. And now you're decreasing the amount of emergency personnel that are needed to deliver the emergency services during the emergency.

SULLIVAN: The Treasury Department's rules say states and counties, quote, "should pass the money down to local communities." But they don't say shall pass the money down, which in government-speak means, they don't really have to.

COLIN WELLENKAMP: Yeah, that doesn't do us much good.

SULLIVAN: Colin Wellenkamp represents 96 cities from Minnesota to Louisiana for the Mississippi River Cities and Towns Initiative. Together they represent almost 5 million Americans, but all but one of the cities were shut out.

WELLENKAMP: The 500,000 is a really high bar. Not even the city of New Orleans meets that.

SULLIVAN: For those that do get money, puzzling restrictions await. Brad Gair is a former federal coordinating officer for FEMA and a principal at Witt O'Brien's, an emergency management firm.

BRAD GAIR: Everyone is confused. They're frustrated, and they're worried.

SULLIVAN: Gair's done 9/11, Katrina, Hurricane Sandy. He recently set up a free webinar to explain the rules, not the kind of thing that normally draws a crowd. More than a thousand counties dialed in.

GAIR: What is unusual in my experience ever is to have that same thousand still there at the end of an hourlong call. There are hundreds and hundreds of cities and towns across America that aren't even applying because they don't understand the programs, and they don't have time to figure it out.

SULLIVAN: San Jose in Silicon Valley does have the time and the know-how, and even so...

KIP HARKNESS: The most complicated Rubik's Cube of financing that we have ever had to solve. And we're really good at solving that kind of stuff.

SULLIVAN: Kip Harkness is San Jose's deputy city manager. They've got more than 500,000 people, so they got $178 million from the federal government. But he says they're confused too. They recently discovered that they can use the money to feed homeless people within the city's borders, but they can't spend the money on homeless people one block over in the county.

HARKNESS: We're not allowed to spend our CARES Act money in others' jurisdictions.

SULLIVAN: Mayor Phil Stang, who's planning a lemonade stand out in Kimmswick, Mo., says that rule is a real shame.

STANG: There's a song about that, "Do You Know The Way To Jan Jose" (laughter). And if they happen to have $250,000 in a bag out there, I'll be more than happy to travel out there and get it and bring it back.

SULLIVAN: For now, the economic fallout from the pandemic is only being compounded by economic damage from protests and riots. Many mayors will be looking to move federal money from one crisis over to the next. But that along with pages of other rules is not allowed.

Laura Sullivan, NPR News.

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