Iowa appears to be in line for $1.25 billion as its share of the federal $2 trillion coronavirus recovery package.
The allocations are based on population, and Iowa’s share of the $150 billion Coronavirus Relief Fund for state, local and tribal governments is the minimum allotment for states. The funds are expected to begin arriving within 30 days, according to information provided to states.
The funding is in addition to the recovery checks of up to $1,200 that will be mailed to single taxpayers making no more than $75,000 or up to $2,400 for married couples with incomes of less than $150,000. Those amounts will be increased by $500 for each child.
Of Iowa’s $1.25 billion, $688 million is earmarked for state government, which has a general fund budget approaching $8 billion. The money may be used for expenditures incurred related to COVID-19, expenditures not accounted for in the most recent budget expenditures incurred from March 1 to the end of the year.
Another $563 million is designated for what is called the “local cap” for local governments with populations of 500,000 or more. Iowa doesn’t have any local governments that would qualify for those funds, so money will revert to the state to be used at its discretion, according to the information supplied to Iowa’s Legislative Services Agency.
“We have reached out to the governor’s office and heard back that it will be set up as block grants,” said Lucas Beenken, a public policy analyst and lobbyist for the Iowa State Association of Counties. “How distribution and use will look is yet to be determined.”
The Iowa League of Cities is encouraging member cities to begin making projections for loss of revenues and documenting actual expenses incurred for any possible reimbursements.
ARTICLE CONTINUES BELOW ADVERTISEMENT
David Roederer, Iowa Department of Management director, said he and department staff are going section by section through the 800-plus pages of the recovery legislation while waiting for Treasury Department guidance on interpreting various parts of the bill.
The full impact of the coronavirus pandemic is not yet known, but Moody’s Analytics warned that state budgets could face a reduction of 15 percent to 25 percent as a result of lower revenues. On average, most states will experience a 10 percent loss in general fund revenue and increased expenses of 2 percent to 5 percent for programs such as Medicaid.
“Fortunately, Iowa’s reserves will provide needed cash flow for the state to pay its bills for a while,” said Dave Reynolds, LSA fiscal editor/supervisor. Iowa has about $782 million in its reserve funds.
Members of Congress are considering a fourth relief bill. It may address concerns that states will need additional assistance to deal with declining revenues and rising costs. However, it could be awhile before a fourth bill comes to fruition because the U.S. Senate has adjourned until April 20.
Comments: (319) 398-8375; email@example.com
10:02AM | Thu, May 28, 2020
08:00AM | Thu, May 28, 2020
05:36AM | Thu, May 28, 2020