DES MOINES — Government agencies, private businesses and individual Iowans have shaken the federal money tree to weather a tough spate of public health and economic calamities.
Last March, as the novel coronavirus first began to spread widely in the United States, Congress passed the $2.2 trillion CARES Act to provide relief to businesses, individuals and governments.
Provisions of the CARES Act and guidance from the U.S. Department of the Treasury provided direction to states and other grant recipients concerning the qualified uses to cover necessary expenditures incurred after March due to the COVID-19 public health emergency.
Necessary expenditures included costs incurred to allow the states to respond directly to the emergency, such as by addressing medical or public health needs, according to a report prepared by Iowa’s Legislative Services Agency. Necessary expenditures also included those incurred to respond to second-order effects, such as by providing economic support to those suffering from employment or business interruptions due to pandemic-related closures.
The funding could not be used to “backfill” the loss of state revenues from the pandemic, but could be used as a cash management tool.
What’s happened since
State agencies have reported federal awards totaling $4.615 billion to address a wide variety of expenses related to the COVID-19 pandemic since March. Iowa residents had received $4.078 billion in direct federal economic impact payments before Congress approved and President Donald Trump signed another relief package with $600 individual payments late last month.
Much of the federal aid — nearly $2.635 billion — was used to pay unemployment insurance benefits to hundreds of thousands of Iowans who were thrown out of work in an unprecedented surge in joblessness after the novel coronavirus first was detected in Iowa.
The 562,787 initial unemployment claims filed in 2020 surpassed levels posted during Great Recession. The statewide jobless rate swelled into double digits as businesses and schools closed and people stayed home at the urging of public health officials.
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Businesses have since reopened under modifications in Gov. Kim Reynolds’ emergency orders as Iowa undergoes a series of pandemic surges and state officials work to distribute vaccine doses aimed at bringing the virus under control.
Beyond the unemployment assistance, Iowa has received $1.25 billion in CARES Act federal funds with a total of more than $1.2 billion having been transferred and $957 million expended by mid-December for various programs to address costs associated with the pandemic, according to the Legislative Services Agency report. Reynolds said last month the fund had a $47 million balance.
Federal funds for medical assistance and other Department of Human Services programs have topped $307 million, while education initiatives garnered nearly $214 million and public health functions were bolstered with $134.4 million in federal aid. CARES Act money covered $490 million in payments from the state’s unemployment insurance trust fund.
A total of $103 million was to be paid out to local governments and another $25 million was to be distributed to assist local governments in meeting the local government match for Federal Emergency Management Agency disaster assistance.
The Iowa Department of Homeland Security and Emergency Management received pass-through funds from FEMA for a total of 267 projects in cities, counties, county hospitals and school districts related to COVID-19 with an estimated total cost of $192.2 million. CARES Act money helped the state cover $60 million in state and local FEMA matching funds, and Iowa officials used $99 million to provide small business disaster grants.
Other CARES Act money went to Iowa livestock producer relief, $62.85 million; broadband grants, $50 million; Iowa eviction and foreclosure prevention program, $37.4 million; Iowa Hospital COVID-19 relief program, $25 million; beginning farmer debt relief, $16 million; biofuels relief and small business utility assistance, $15 million each; nonprofit recovery program, $10 million; state and county fair relief, $6.98 million; movie theater relief, $5.5 million; and $29.4 million to purchase and administer 900,000 tests under the Test Iowa contract with Nomi Health.
Also, non-state agency federal funds recipients have reported federal awards funded by the CARES Act totaling $672.2 million to address a wide variety of expenses related to the pandemic. The payments were awarded to local entities, including school districts, boards of health, county hospitals, community action agencies, Area Agencies on Aging, and food banks to provide direct assistance to communities across Iowa.
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