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WPHA Legislative Update - CARES Act Overview

Thursday, April 2, 2020  
Posted by: Hoven Consulting
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On March 27, the federal CARES Act was signed into law. It's a comprehensive omnibus bill that provides federal financial and regulatory relief during the COVID-19 pandemic.

Yesterday, the Wisconsin Legislative Fiscal Bureau released memo providing a summary overview in the ways the bill provides assistance to Wisconsin.

Following are some highlights that may be of interest:

  • Public Health and Social Services Emergency Fund. The Act provides $100 billion in the federal public health and social services emergency fund to prevent, prepare for, and respond to COVID-19. The funds are to be distributed to health care providers for expenses or lost revenues that are attributable to the coronavirus. Only expenses or losses that have not been reimbursed from other sources are eligible for payment from this fund. The Act lists the eligible expenses as: building or construction of temporary structures, leasing of properties, medical supplies and equipment including personal protective equipment and testing supplies, increased workforce and trainings, emergency operation centers, retrofitting facilities, and surge capacity. Although this funding is not designated for state or local governments, it could be distributed to healthcare facilities in Wisconsin. The Secretary of the Department of Health and Human Services is responsible for developing criteria for distributing funds, and it is unknown how much funding, if any, Wisconsin healthcare providers will receive from this source.
  • Direct Payments to State and Local Government. The Act creates the Coronavirus Relief Fund and appropriates $150 billion to state, local, and Tribal governments. The funds appropriated are only to be used for expenses incurred in response to the public health emergency, which were not accounted for in the most recent budget, and were incurred between March 1 and December 30, 2020. The Act further provides that up to 45% of a state's overall payment can be paid directly to local units of government (defined as any unit of general government below the state level) with populations of at least 500,000, provided that the chief executive of the unit of government certifies that the intended use of the funds complies with the guidelines above. Because the funds are distributed to states based on population, Wisconsin is expected to receive an estimated $2.3 billion. Wisconsin has three local units of government that qualify to receive funds directly, based on their population: Dane County, Milwaukee County, and the City of Milwaukee. These governments could receive an estimated $360.6 million of the total state payment, with the remaining $1.9 billion being paid to the state government.
  • Centers for Disease Control and Prevention (CDC). The Act provides an additional $4.3 billion to the CDC to prevent, prepare for, and respond to coronavirus. This funding is available through September 30, 2024. Of this amount, at least $1.5 billion will be provided as grants to states, localities, territories and tribes. It is not known what portion of this funding Wisconsin will receive.In addition, the Act ensures that entities that received public health emergency preparedness grant awards in 2019 will receive at least 100% of their federal fiscal year (FFY) 2018-19 award amounts. Wisconsin received approximately $11.3 million in FFY 2018-19. [The Coronavirus Preparedness and Response Supplemental Appropriations Act (P.L. 116-123), ensured that entities would receive awards equal to 90% of their FFY 2018-19 award amounts.]
  • Wisconsin Housing and Economic Development Authority. The Act provides HUD $1.25 billion for tenant-based rental assistance and $1.0 billion for project-based rental assistance to low-income households. The Act reserves $400 million of tenant- based assistance funding for adjustments to 2020 allocations to cover increased costs for tenant- based assistance associated with the current public health crisis, to be allocated on the basis of need. Of the remaining $850 million for tenant-based assistance, FFIS estimates $6.3 million will be provided to state and local public housing authorities in Wisconsin for allocation to low-income tenants. In federal fiscal year 2018, HUD expended approximately 1.59% of project-based rental assistance appropriations in Wisconsin. Assuming a similar allocation, it is estimated perhaps $15.9 million in project-based funding would be directed by HUD towards properties serving low-income tenants in Wisconsin.
  • Community Services Block Grant. The community services block grant (CSBG) provides funding to states, territories, and tribes for distribution to local organizations to alleviate the causes and conditions of poverty in communities. Funding provides a range of services and activities to address the needs of low-income individuals, including the homeless, migrants, and the elderly. Federal CSBG funding of approximately $8.7 million annually supports contracts between the Department of Children and Families (DCF) with eligible community services organizations. To be eligible, the majority of the persons served by the organization must be at or below the poverty level. CSBG funding also supports the tribal family services program (if a tribe receives direct CSBG funding, DCF reduces the tribe's allocation under the family services program). CARES provides $1.0 billion to increase funding states receive under the community services block grant. FFIS estimates that Wisconsin's share of this funding will be approximately $12.0 million. Such funding may be used for administrative expenses and is not subject to the 9% limitation on discretionary activities. To the extent CSBG funds are distributed as grants to an eligible entity and have not been expended by that entity, the funding may carry over to be used by that entity for the next two fiscal years.

In general, there are a lot of good public health initiatives. Above are just highlights. For a comprehensive look, please refer to the linked memo above.

Erik Kanter
Hoven Consulting, Inc.
44 E. Mifflin St, Suite 600
Madison, WI 53703

 


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