The debate over how much federal pandemic aid should be shared with Connecticut’s municipalities is coming down to one obvious-yet-complex question: What exactly is a coronavirus-related expense?
While new federal guidelines appear to encourage Gov. Ned Lamont’s administration to dedicate hundreds of millions of dollars to cities and towns, the fine print in the federal rules says something very different.
While it remains unclear whether the impact on municipalities will stretch into the tens or hundreds of millions of dollars, Lamont is expected to announce Thursday an initial wave of funding for communities, which have been pressing for assistance for the past two months.
“I don’t think anybody’s going to try to game the system, but at the same time these costs should not be pushed down on the property taxpayers,” said Joe DeLong, executive director of the Connecticut Conference of Municipalities.
The final bill “remains to be seen, but in some communities it’s going to be very, very large,” he added.
DeLong and Betsy Gara, director of the Connecticut Council of Small Towns, met Wednesday to discuss relief efforts with state Office of Policy and Management Secretary Melissa McCaw, Lamont’s budget director.
“I think we’re definitely having a good dialogue,” Gara said, adding the administration would provide a webinar next week to offer more guidance to municipal leaders.
Administration officials did not discuss Wednesday’s meeting, but have said repeatedly that federal rules are more stringent than municipal leaders may realize.
Emergency funds can’t be used to supplant lost tax receipts or other vanishing revenues. They apply only to clearly invoiced expenses. And those costs have to be above and beyond anything for which communities budgeted.
That last qualifier is huge. For example, most municipalities budget extra dollars for unforeseen overtime. If COVID-19 ate up those extra dollars, but didn’t go beyond the budgeted level, that’s not a covered expense.
At issue is the $150 billion Coronavirus Relief Fund enacted by Congress as part of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act Congress enacted in March, and — more specifically — Connecticut’s nearly $1.4 billion share of that relief fund.
The dollars are earmarked to assist state, municipal and tribal governments.
But Congress only mandated that states share fixed portions of their respective grants with large cities with populations in excess of 500,000. Otherwise, it’s up to state governments to decide how to to divvy up the dollars.
Connecticut has no municipality close to that size; its largest city — Bridgeport — has about 147,000 people.
But the federal government has issued guidelines to the states, and these recommend that about 45% of the grant be spent on municipalities with populations less than 500,000.
That would amount to roughly $630 million out of Connecticut’s $1.4 billion allocation.
The Lamont administration has urged municipalities to report their pandemic-related costs. And while a final assessment isn’t complete, those reports, to date, have totaled in the tens of millions of dollars.
But DeLong warned many municipal leaders are unclear about the costs they should claim, he said.
For example, some communities have used public school buildings to offer summer youth programs in large areas that allow for safe, social distancing. But this means enormous daily, disinfecting and cleaning work that can costs thousands of dollars in labor and supplies each week.
Is this a COVID-19-related expense, or an added cost — albeit an extraordinary one — to existing summer programs? “These are things, I think, that haven’t been contemplated yet,” DeLong said.
Senate Minority Leader Len Fasano, R-North Haven, Wednesday urged Lamont to interpret the rules broadly and maximize aid given the many businesses forced to close during the pandemic. “When businesses close, grand lists are negatively impacted,” Fasano added. “The extended closure of local employers is hurting our towns and cities. Municipalities are in need of this federal support.”
Gara said leaders in some towns served by regional school districts didn’t realize they needed to gather those districts’ pandemic-related expenses as well as their own.
Towns must be able to modify their claims to the state, and submit additional ones, as expenses arise amidst Connecticut’s climb out of the pandemic, Gara said.
“I think they’ve only hit the tip of the iceberg,” DeLong added.