The report underscores an issue that bedeviled state and local officials in the wake of the passage of the $2.2 trillion emergency economic relief package — that strict federal rules designed to ensure the funds are spent on Covid-related expenses has kept much of the money bottled up in local coffers, even as these places face huge budget shortfalls.
It also comes in the middle of an intense debate over distributing more funds to states. Democrats, in a $3 trillion House-passed relief measure, would send an additional $1 trillion to states and localities. Senate Republicans, in their proposal introduced this week, moved to add flexibility to the current federal rules, but added no new funds.
Congress agreed in March to disburse $150 billion in state and local aid, but of the $139 billion that has been paid out to this point, roughly $34 billion has been utilized for costs incurred, according to the Treasury report.
While Treasury’s numbers reveal that a large chunk of money remains unspent, counties, states and cities have argued for weeks that part of the reason for that is they don’t have flexibility to spend it how they need to to keep from slashing budgets.
By Phil Mattingly and Lauren Fox, CNN
