State finance director ‘highly confident’ CARES funds will be spent by Dec. 30

Some state officials had hoped for a deadline extension from Congress to finish spending the more than $1.76 billion in CARES Act money allocated to the state earlier this year, but no such proposal has developed. House and Senate leaders are discussing varying COVID-19 relief packages that could provide additional money to states, but so far no agreement has been reached in Washington.

“We are certainly operating as if it is a hard deadline,” Kelly Butler told reporters during an update on the spending.

Butler also said he expects state officials to make a third reallocation later this month of some of the funds earmarked for various entities and expenses in May but unspent so far.

Money not spent by the Dec. 30 deadline has to be returned to the federal government. Butler said he’s “highly confident” the state can spend almost all of the money, down to about $10 million or less.

Congress put tight restrictions on how the funds could be used, including not allowing any expenses other than those directly related to the outbreak, making spending the money more challenging than many assume, Butler said.

According to a dashboard updated by the Department of Finance, as of early this week, $933.4 million of the state’s $1.76 billion had been spent. Leaving $827.7 million “unexpended.” But because many programs and entities are being reimbursed for COVID-related expenses, more money is going out every day.

The state is reimbursing 66 counties — Jefferson County received its own direct allocation — and more than 400 municipalities for some of their expenses, Butler said. The expenses also have to have originated after March 27, not prior to the virus.

Last month, Gov. Kay Ivey and legislative leadership reallocated $200 million in CARES Act money to Alabama small businesses, non-profit groups and faith-based organizations impacted by COVID-19.

“Revive Plus” is a second wave of funding for organizations with 50 or fewer employees. They can receive grants of up to $20,000.

As of Wednesday morning, more than 30,000 applications for the grants had been received, Butler said. The application period closes at noon Friday.

Asked about a future reallocation, Butler said more money could be directed this month.

Unemployment trust fund

In September, Ivey and lawmakers dedicated $300 million to unemployment benefit costs in an effort to avoid a significant increase in the tax paid by employers. But even with that infusion, businesses are expected to be taxed more to replenish the fund. The state’s unemployment insurance benefits trust fund is supported by a tax on employers.

Butler said another about $287 million could be dedicated to the trust fund to cover COVID-19-related unemployment costs.

Sen. Arthur Orr, R-Decatur, is one of six lawmakers who must approve any changes to the CARES Act spending plan OK’d by the Legislature in May. Orr on Wednesday said the unemployment trust fund is the best place for remaining CARES funds.

“That will prevent a tax increase on businesses across the state by shoring up our unemployment trust fund,” Orr said. “And you don’t have the bureaucratic hassles of grants and grant applications — you don’t have time for that anymore.”