Gov. Brian Kemp told lawmakers this week that he will set up committees to review applications to spend the $4.6 billion the state is expected to receive in the latest COVID-19 relief plan.
Doing so may alleviate some of the concerns legislators had that they wouldn’t be involved in deciding how the money is spent. State law leaves it up to Kemp.
Senate Appropriations Chairman Blake Tillery, R-Vidalia, said Wednesday while presenting the fiscal 2022 state budget that colleagues had questions about how the money would be used.
In a letter to lawmakers, the governor said the state is still waiting for guidance from the U.S. Treasury Department to specify how the money coming to the state can be spent.
But he said the money can broadly be used for COVID-19 response, including making direct payments to Georgians, providing aid to small businesses and giving extra pay for “essential workers.” It could also include making up for lost state revenue during the pandemic and to fund infrastructure “investments,” such as providing more high-speed internet service in rural areas, and water and sewer projects.
State tax collections have actually increased since July 1, rather that declined, as officials expected, so Kemp said the money can’t be used to replace revenue lost in the first few months of the pandemic, when the economy was in recession.
The governor said he has worked with legislative leaders in the past year in deciding how to weather the fiscal impact of the pandemic.
“In coming weeks, our partnership will continue to strengthen as we determine how to best utilize new federal funding,” he wrote.
Kemp said his budget office will administer a grant application process for spending the money, and those requests will be reviewed by a committee of state leaders and lawmakers.
Review committees for broadband infrastructure, water and sewer projects, and “negative economic impact” will be set up.
“While these plans may change depending on guidelines from the U.S. Treasury, I believe that these committees — along with the General Assembly’s continued leadership — will ensure that this new funding is targeted in a manner that most effectively benefits Georgians and promotes continued economic prosperity in every region,” he wrote.
During remarks to colleagues, Tillery said, “I want to thank Gov. Kemp for listening to our concerns.”
Federal CARES Act funding approved by Congress in March 2020 paid for Georgia’s response to the pandemic. Kemp also used $1.5 billion in federal pandemic relief money to shore up the fund that pays unemployment benefits after a record number of Georgians lost their jobs.
Relief money that went to the Georgia Department of Education was used for $1,000 teacher bonuses.
However, Kemp has been critical of the latest relief bill — which Congress passed in March — saying the formula used to determine how much states are receiving punished places such as Georgia where the economic recovery has been relatively strong and there was no budget shortfall.
He and other Republican leaders were also angered by a provision in the bill that they said might prohibit any tax cut. The Treasury Department later said that provision did not prohibit tax cuts that didn’t use any of the federal relief money. The General Assembly then passed and Kemp signed into law a modest state income tax cut that was already in the works.
Kemp said local governments will get about $3.4 billion in the relief bill and local school systems $3.8 billion. Some state agencies will also receive extra aid.
Tillery said since March 2020 schools have received more than $6.8 billion in federal COVID-19 relief aid, more than enough to make up for the 10% cut in state k-12 education funding lawmakers approved in June 2020. Kemp and legislators backfilled 60% of those earlier cuts in the midyear and fiscal 2022 budgets approved during the legislative session, which ended just after midnight Thursday.
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