Ohio treasurers and local mayors said the new COVID-19 relief bill is vital for addressing immediate needs, making the path to recovery easier for some of the state’s biggest employers. State officials, however, say the funding puts the state at a disadvantage.
In a call that included U.S. Sen. Sherrod Brown, officials from Lucas County, Chillicothe, Cleveland and Columbus all agreed that the American Rescue Plan (ARP), as the current COVID-19 relief bill is nicknamed, would help if the local government dollars are distributed without strings.
Chillicothe Mayor Luke Feeney said his government and other local governments in the region want to see unrestricted funds so that they can get to work spending the money where it’s needed, rather than filtering through the allowable expenses for the money.
“We spent as much time trying to figure out how to spend the (CARES Act) money and what hoops we had to jump through, which took away from crucial time that we could have been spending helping the people in our communities,” Feeney said.
While Lucas County Treasurer Lindsay Webb agreed that the moratorium on evictions and foreclosures brought on by the pandemic was the right thing to do, the pause can’t last forever, so those that need help getting back on their feet need a better way out.
She said ordinarily her county would conduct about 160 tax foreclosures in a year, but “in good conscience” that didn’t happen in 2020, and won’t happen in 2021.
Instead, the county opened up payment plans for homeowners and landlords. Because of the option of payment plans, Webb said the county has seen a 170% increase year over year in payments.
“Without those (payment plan) payments, I was anticipating that Lucas County tax collection would be down as much as $50 million,” Webb said.
She credited expanded unemployment and stimulus checks with helping the county “stay steady.”
But the state and local government piece of the funding bill was called into question by Lt. Gov. Jon Husted, and in a letter signed by some of the nation’s governors, including Gov. Mike DeWine.
“There’s no doubt that the plan provides significant additional relief funding for state and local governments, however, there’s a provision in here that I want to raise an issue with,” said Husted on Monday.
The state and local government funding, which would total $350 billion nationwide, uses a formula to decide state-to-state distribution of that money which looks at a state’s unemployment rate for the fourth quarter of 2020, which would put Ohio 21st in line for funding, according to Husted.
In December 2020, Ohio had an unemployment rate of 5.5%, and Husted said the unemployment number “is an unreliable number” citing issues of fraud the state has been dealing with.
The CARES Act funding model used population rates instead, which Husted said, if used in this current bill, would put Ohio seventh in ranking for the funding. Because of the different formula, Husted said the stayed would lose $800 million when compared to a population-based formula.
“It really puts Ohio and a lot of states at a disadvantage in terms of the funding that comes from this,” Husted said.
DeWine confirmed that he signed a letter asking the U.S. Senate to reconsider the funding formula in the relief bill.
“I think it’s not fair and we hope that the Senate will take care of this problem,” DeWine said.
The ARP has passed the House and is now under consideration by the U.S. Senate, and Brown said he wants to see the bill moved along as quickly as possible.
“(Secretary of State Janet Yellen) said if we fall short, if we don’t go big enough, this economy will have a permanent scarring, potentially for a generation,” Sen. Sherrod Brown said. “There’s been too much damaged in this economy over the last year, too much damaged because this is a public health crisis and an economic crisis.”