Home News Democrats Allege Ducey Improperly Used Hundreds of thousands in Federal Pandemic Reduction...

Democrats Allege Ducey Improperly Used Hundreds of thousands in Federal Pandemic Reduction Cash


Arizona Governor Doug Ducey directed hundreds of thousands in federal pandemic reduction funds to finance operations at state businesses, and native Democrats are accusing him of misusing the funds.

As a part of the $2 trillion Coronavirus Support, Reduction, and Financial Safety (CARES) Act that Congress handed final spring to maintain the financial system on life assist after pandemic-induced financial shutdowns, Arizona obtained $2.82 billion for native and state governments, in line with a current report from the state Joint Legislative Finances Committee (JLBC). These funds have been supposed to cowl prices incurred in the course of the pandemic, according to guidelines supplied by the U.S. Division of Treasury.

Of the $1.86 billion that went to the state of Arizona, $397 million went to reimburse spending from the final fund, whereas $5 million financed Division of Public Security and Arizona Division of Transportation, in line with the JLBC report. The remainder of the cash was issued to quite a lot of recipients, together with $441 million for small native governments, $150 million for the Arizona Specific Pay Program, $14 million to the Division of Well being Providers for Private Protecting Gear, $9 million for the Secretary of State’s COVID-19 response and election operations, and $370 million for public faculty districts and constitution faculties by the Enrollment Stability Grant Program. (Out of the state’s complete $2.82 billion CARES Act allocation, one other $965 million went to native governments with populations over 500,000, akin to Maricopa County, the town of Phoenix, and Tucson.)

Equally, an August JLBC report famous that whereas the state was initially anticipated to have a $190 million price range deficit on the finish of 2020 (because of the pandemic), JLBC workers now count on that the state will shut out the 12 months with a $377 million surplus — a roughly $500 million shift. An estimated $319 million of that’s attributed to “lower-than-expected spending,” primarily because of the “use of COVID-relief federal funds to offset current Common Fund spending.” The spending “occurred largely within the Division of Corrections and the Division of Well being Providers,” the report states.

Native Democrats, who have been briefed on the usage of the federal reduction funds final week, pounced on Ducey for the choice, arguing that the cash ought to have been used to straight fight the pandemic, somewhat than prop up state businesses and their fundamental capabilities. They cited Arizona’s dysfunctional unemployment benefits system as needing further assist to assist these out of labor because of the pandemic.

“Over the course of the previous couple of days, we have discovered that lots of of hundreds of thousands of {dollars} from the CARES Act cash has been utilized by the governor to backfill our Division of Corrections,” stated State Consultant Aaron Lieberman, who represents north Phoenix, at a October 2 press convention. “The design and intent of these funds have been to struggle COVID and assist Arizonans who’re coping with the impression of this pandemic. Our place is absolutely easy: Let’s use these CARES Act {dollars} to do issues that can assist Arizonans right this moment.”

Presently, Phoenix New Instances has not confirmed Lieberman’s assertion that “lots of of hundreds of thousands of {dollars}” have been used to finance Division of Corrections, aside from JLBC’s estimate that the state’s new surplus was largely as a result of the usage of federal funds to cowl “current” spending within the Division of Corrections and the Division of Well being Providers.

“Now we have so many wants proper now with our faculties and testing and get in touch with tracing to reduce the present unfold. We have been shocked to listen to that a lot of it went to the Division of Corrections,” Lieberman instructed New Instances after the press convention. “It’s significantly ironic that the Division of Corrections has been a hotbed of COVID itself. The CARES Act cash was paying for the Division of Corrections whereas the Division of Corrections wasn’t taking the mandatory precautions to maintain prisoners protected.”

Lieberman and the opposite Democrats obtained their info on Ducey’s use of the federal reduction funds from a September 30 briefing on the state’s income and price range outlook with Richard Stavneak, director of the JLBC. Nevertheless, this presentation was targeted on the state’s general fiscal outlook and contained restricted info on how the federal reduction funds have been spent, Lieberman stated.

In response, Patrick Ptak, a spokesperson for the governor, adamantly defended Ducey’s use of the federal reduction funds, however did not deny the assertions from Democrats and the JLBC studies that reduction cash went to state businesses.

“That is accountable and prudent decision-making. The virus is with us for the foreseeable future. We have been capable of stretch the social security internet to assist folks in want. Arizonans count on that can proceed to be the case,” he wrote in an electronic mail. “With this plan, it will likely be. Many states are having to chop from important areas, like schooling. Arizona shouldn’t be. We’re investing.”

“This pandemic isn’t simply in regards to the public well being response; it’s additionally in regards to the long-term restoration,” Ptak added. “These selections and accountable company spending helps prioritize public well being now and saving {dollars} that can assist us keep away from, in years to return, the powerful selections different states are going by now.”

He additionally famous that quite a few businesses that obtained federal funding, together with the Division of Corrections, “plan to return cash to the Common Fund.”

However U.S. Treasury guidelines clearly state that governments can solely use the reduction funds for prices brought on by and in the course of the pandemic — and to not cowl current price range holes. And Ptak didn’t reply to questions on how precisely the cash was spent throughout the businesses that obtained cash, nor did he deal with questions on when the spending occurred or whether or not the bills have been already accounted for in company budgets earlier than the pandemic hit.

“Funds is probably not used to fill shortfalls in authorities income to cowl expenditures that might not
in any other case qualify beneath the statute,” the rules state. “Though a broad vary of makes use of is allowed, income alternative shouldn’t be a permissible use of Fund funds.”

It is unclear presently whether or not the governor’s use of the reduction funds was in-line with the U.S. Treasury tips. Ptak didn’t reply to New Instances’ request for the governor’s authorized rationale for a way the cash was spent.

On the October 2 press convention close to the State Capitol, three Arizona Home Democrats together with Lieberman slammed Ducey’s place of punting to Congress for any additional weekly unemployment benefits, citing the struggles folks have skilled accessing advantages from the state system and its meager offerings. Additionally they known as on Ducey to make use of any remaining federal funds to pay for a lift in weekly unemployment advantages and provides cash to small companies who’ve been hit onerous by the pandemic.

In line with an unofficial JLBC estimate from a Powerpoint presentation given to Democratic lawmakers in the course of the September 30 briefing, $425 million in federal reduction cash has not but been allotted. Ducey spokesperson Ptak wrote in an electronic mail that “there’s $400 million remaining” of the federal reduction funds allotted to the state.

“Congress is at a gridlock, the president has COVID, and on a regular basis Arizonans are nonetheless struggling,” stated State Consultant Reginald Bolding, a Democrat who represents south Phoenix. “The governor has a possibility, with the {dollars} which have already come from the federal authorities, to make the most of this as a possibility, to place these {dollars} to work, and never backfill state capabilities that we must always have already got assets for.”