Press "Enter" to skip to content

Posts published in “Day: September 18, 2020”

Risk and the attachment of strings

stapiluslogo1

Earlier this year, most of us received a federal payment for $1,200 - twice that for many households with two qualifying people - that came about as close as anything does to being free money.

Our tax dollars paid for it, of course, but we recipients didn’t pay taxes on it, and we weren’t limited in what we could do with it. Some people may have put it in a savings account, but many probably used it to buy things, from beer to medical supplies to a household utility.

For some people this may have felt like a simple windfall; for others, who lost work or otherwise saw financial pressures, it may have been a lifeline. From a national, big-picture, perspective, there was another benefit. The economy, cratered by a pandemic, was experiencing a massive loss of circulating money, which in turn hurt businesses and other organizations and the people who were paid by them, and - in another turn of the wheel - damaged the governments and non-profits on which people rely.

That massive infusion of money helped; our economic situation would be worse if it hadn’t happened. In the case of the individual payments, part of what helped was the simple fact that we recipients didn’t have to worry about how we could use the money. Whatever we did, as long as the money was put to use, would help keep the wheels turning.

Another part of the massive federal payout was the part of the CARES Act that, in a somewhat similar way, gave to state governments big piles of money to spend, partly with the same goal in mind - to keep economic activity chugging along. Governments, more than individuals, ought to take care to spend wisely, and the states have adopted a variety of approaches for doing that. Sometime soon, someone ought to analyze those approaches and try to determine what worked best.

In Idaho, Governor Brad Little tried to be deliberate about the money and, as would make sense, get as much value for it as possible. But this federal money didn’t arrive entirely without strings attached. Among the requirements was that the money be used for a purpose that related to dealing with the Covid-19 pandemic.

One of Little’s efforts was this: Give about $200 million in grants (some of it but not all to counties) as reimbursement for public safety costs linked somehow to Covid-19. The money would be used for public safety budgets (possibly including some public health costs), which account for a significant piece of the cost of a county budget, so you might think the counties would swiftly grab for the bucks.

Some of them have. But not all. A number of counties are turning down the free money, and their reasons don’t relate to simplistic ideology or stubbornness. They do have practical concerns.

Idaho’s second-largest county, Canyon, is turning down about $10 million. Why? The county’s controller was reported as saying, “the U.S. Treasury guidance says funds can be used for expenses reasonably necessary for coronavirus response, while the Office of the Inspector General states documentation for payroll expenses must be available to prove the expenses were related to COVID-19.” It might mean, for example, the sheriff’s office would have to document how its activities have been driven by the pandemic - which costs and how many working hours are specifically related to it. That might be hard to do, and could be easy to challenge.

The county clerk warned taking the money “could be trouble down the road.”

Some other counties, including Latah, have expressed similar concerns.

Others are less worried. Ada County is taking its $16.4 million, and officials there - and in a number of other places - said that normal financial recordkeeping should be enough to demonstrate the money was used for pandemic-related purposes.

They could be right. But the unease is not unreasonable either.

The rules, limitations and restrictions on the spending of the money are there largely to ensure the money isn’t spent irrationally or with an eye to graft or corruption, and that’s fair enough. But if the money is going to accomplish its larger purposes, a certain amount of freedom of action will be needed too.