It will be 2022 before the state starts spending the $4.8 billion in COVID-19 relief money that Congress approved in March to help mitigate the economic fallout from the pandemic.
Gov. Brian Kemp had hoped to announce grants for broadband expansion, water and sewer projects, and programs to aid Georgians and businesses by mid-October.
But state lawmakers on committees that are deciding which projects to recommend said cities, counties, businesses and nonprofits didn’t have enough time to put together proposals, so Kemp’s budget office is extending the time for applications until the end of October, which in turn moved the timeline for announcing where the money will go to early 2022.
While he was eager to start getting the money out to people, governments and businesses that need it, Senate Appropriations Chairman Blake Tillery, R-Vidalia, said the delay may help ease some of the current problems with finding workers and materials to do projects, such as adding or improving water and sewer lines.
Georgia’s unemployment rate was 3.7% in July, almost what it was the month the pandemic began, and businesses have reported having trouble finding workers.
“At the time this (relief bill) was passed, I understand we were really concerned about people being able to find jobs,” Tillery said. “That is not our problem now. The supply chain is the problem.”
The state originally asked those with proposals for the relief funding to submit applications between Aug. 1 and Tuesday, with committees of legislators such as Tillery and state officials scoring the projects and Kemp making the final decision.
But committee members such as Sen. Larry Walker, R-Kathleen, said that wasn’t enough time to get engineering work or other planning done before applying for some infrastructure projects.
Rep. Robert Dickey, R-Musella, said: “I heard that from the get-go. I would like for us to extend it to a more reasonable time.”
Kelly Farr, the governor’s budget director, said his office had not received any completed applications by the Aug. 31 deadline. The nursing home industry, however, has submitted a sizable request to help the long-term care industry, which has been hard hit by the pandemic.
“We heard from committee members, we heard from applicants,” Farr said. “We know there is a lot of people that need the money, and we want to get it out as fast as we can.
“We are hopefully balancing the needs for the money with giving people enough time to plan and respond.”
House Minority Whip David Wilkerson, D-Powder Springs, said on Twitter that “this was the right call.”
“This is a unique opportunity that the Biden Administration has given us and it makes sense to do it the right way,” he wrote.
The $1.9 trillion relief package that President Joe Biden signed in March sent billions to Georgia cities and school districts as well.
It was designed to help states hard hit by COVID-19, particularly during the business shutdown in the spring of 2020. It was also aimed at making up for lost tax revenue.
However, while a major economic downturn was expected from COVID-19, economies in many states, including Georgia, bounced back relatively quickly. The state in July announced a record $3.2 billon increase in tax collections in fiscal 2021, which ended June 30.
While some state governments have approved broad plans to use the relief money, little of it has been spent so far. That’s because it took a few months for the money to flow into state coffers, and officials had to wait for guidance from the federal government detailing how they could spend it.
In Georgia, Kemp formed three committees to review applications, although he will ultimately make the final decision.
Georgia has received half the money it is expected to get. It is scheduled to receive the second half next year.
The first round of applications would allocate about $875 million of the $2.4 billion the state has received so far, according to the Office of Planning and Budget.
Most of the committee members come from outside metro Atlanta, which is also where most of the money in some areas — such as for expanding high-speed internet — will be spent. Of the 20 lawmakers Kemp appointed to committees, only two are from the five core metro Atlanta counties, and not one is from Atlanta itself.
Some states plan to use the money to fill holes left by declining tax collections, but that’s not an issue in Georgia.
Others are talking up proposals to repair aging water, sewer and transportation systems, to improve mental health programs and to create the infrastructure needed to offer high-speed internet to the millions of Americans who don’t have it.
The need for expanding high-speed internet access — particularly in rural Georgia — has been a hot topic at the General Assembly for years, but lawmakers could never come up with a way to pay for it without raising taxes and fees.
That talk only accelerated when schools closed down at the start of the pandemic and distance learning took the place of in-person instruction.
The money coming to Georgia can be used broadly for COVID-19 response, including making direct payments to Georgians, providing aid to small businesses, giving extra pay to “essential workers,” funding job training and placement services, assisting hard-hit areas of the economy such as the hospitality and travel industries, and paying for infrastructure projects.
Some Republicans have expressed concern that the relief money, along with the trillions Congress is considering approving for infrastructure and expanding the social safety net, will cause inflation to increase at the same time companies have had a hard time finding workers and material to deliver on the projects the federal government is funding.
Tillery said that could also drive up the cost of roadwork and other projects funded by state government.
“At a point you are no longer getting more projects, you are just paying more for the the projects you get done,” he said. “Rolling out that much money, you are going to be paying more for what you get.”
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