Curious Iowa: Has Iowa spent all of its COVID-19 relief funding?

DES MOINES — More than $11 billion in federal funding was sent to Iowa via multiple aid packages designed to help Americans and local governments weather the effects of the COVID-19 pandemic.

More than $2.4 billion remains unspent by Iowa, according to a recent state report. But how was the rest of it spent? And what’s planned for the remaining funds? Those questions were recently posed to The Gazette by a curious Iowan.

Curious Iowa is a series from The Gazette that seeks to answer Iowans’ questions about the state, its culture and the people who live here. To answer that question, we took a look at a recent report from the nonpartisan Iowa Legislative Services Agency. It analyzed how much the state received in federal financial assistance during the pandemic, where the state has allocated funds, and how much it still has to spend.

LSA issued the report in early August, and the financial analysis within the report is accurate as of July 28. That means the figures in the report are likely slightly different as of mid-October. The report tracks funding from 87 different federal programs.

How much funding did Iowa receive?

State agencies in Iowa have reported receiving federal assistance totaling $11.047 billion, according to the LSA report.

That federal assistance came from six pieces of federal funding legislation passed in 2020 and 2021, including the CARES Act and Paycheck Protection Program passed in 2020 under former President Donald Trump, and the American Rescue Plan Act passed in 2021 under President Joe Biden.

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Where did the funding go?

Broadly speaking, $7.9 billion was allocated directly to state agencies, nearly $3 billion was allocated to the state’s Coronavirus Fiscal Recovery Fund, and $152 million was dedicated to a capital fund for broadband internet expansion.

Broken down by program, Iowa’s unemployment insurance program received the largest chunk of federal financial assistance: nearly $3 billion, according to the LSA report.

During the peak of the pandemic, unemployment claims spiked in Iowa — and across the country — as businesses were forced to close either by public health mandate or because of a lack of business. A large portion of the federal financial assistance was designed to help employers and workers survive that disruption.

More than $1.1 billion went to Iowa’s Medical Assistance Program, which supports the state’s Medicaid program.

Roughly $650 million in federal assistance designed to help state and local governments was sent to Iowa.

And a trio of education programs each received roughly $400 million in federal funds.

Given those programs received the most pandemic assistance funding, it comes as no surprise that the three state agencies that received the most funding were Workforce Development with $3 billion, Health and Human Services with $1.6 billion, and Education with $1.1 billion.

How much remains unspent?

Of that $2.4 billion that the state has not yet allocated, the biggest chunks are in the state public health department and the Iowa Finance Authority, which operates housing assistance programs for homeowners and renters and has spent less than a third of its allotted federal funding.

Most of the funds have deadlines by which the money must be spent, and those deadlines are staggered over the coming years, depending on the funding source. In some cases, the state has until 2027 to spend pandemic relief funds.

There is nearly $1.1 billion remaining in the Iowa Coronavirus Fiscal Recovery Fund, according to the LSA report. Those funds carry broad spending authority: they can be used to address emergency and economic effects of the pandemic, replenish lost government revenues, or invest in water, sewer and broadband infrastructure.

Funds from the fiscal recovery fund must be spent by the end of 2026, or they will revert back to the federal government.

The public health department, which is now under the Health and Human Services department with the recent reorganization of state government, is yet to spend more than $337 million, according to the LSA report. That’s 60 percent of the federal funds awarded to the department.

The majority of the public health department’s unspent funds are for the Epidemiology and Laboratory Capacity for Infectious Diseases Program, according to the LSA report. Expenses for that program are ongoing and funding will remain available in future years, the report says.

The Iowa Finance Authority is yet to spend $208 million; that’s 68 percent of its allotted financial assistance. The bulk of those unspent funds are for the Emergency Rental Assistance program, and those funds also will remain available in future years, according to the LSA report.

The workforce development agency had $415.5 million still unspent, but that is just 12 percent of the funding it received.

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Comments: (515) 355-1300, erin.murphy@thegazette.com