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Examining lawmakers’ proposal for utilization of COVID-19 pandemic relief funding

In the coming days, Gov. Kay Ivey is expected to call for a special session of the Alabama Legislature to address funding priorities concerning the state’s share of COVID-19 pandemic relief dollars.

Alabama thus far has collected over $580 million of the roughly $1.5 billion the state is expected to receive under the federally-enacted American Rescue Plan Act (ARPA).

During her State of the State address earlier this week, Ivey urged the legislature to take advantage of the historic revenue the state is experiencing by taking a fiscally conservative approach in its allocation of federal dollars. The governor encouraged lawmakers to allocate funding in a manner which would serve to be of long-term benefit to the state.

“We must be smart with this one-time money and commit to the people of Alabama that we will wisely invest – not just casually spend – these dollars,” advised Ivey. “I’ll say again that these federal dollars are just one-time funds. This is not free money.”

The governor outlined some of the top funding priorities the legislature will be tasked with addressing.

“I challenge you, members of the Legislature, to make allocating these funds an early priority and to put these monies to meet some of Alabama’s biggest challenges like statewide broadband connectivity, water and sewer infrastructure, as well as investing funds in our hospitals, nursing homes and other health care providers,” said Ivey.

She added, “[I]n my budget proposals, we will fully fund our rainy-day accounts. We will pay down our debts. We will make robust investments that will pay long-term dividends to the state.”

While briefing members of the press on Wednesday, State Finance Director Bill Poole reiterated the governor’s desire for the funds to be directed as investments which would serve to benefit the state’s future economic and fiscal outlook.

In Yellowhammer News’ conversations with key lawmakers, members of the legislature conveyed that they shared the governor’s vision on how to best utilize the funds provided by ARPA.

Yellowhammer News has obtained a potential list of objectives lawmakers have discussed allocating the state’s current balance of $580 million in ARPA funding toward.

Legislators have discussed appropriating $80 million toward public health, with the dollars being evenly split between hospitals and nursing homes. This funding mirrors the amount given to health care entities during last November’s special session.

Nearly $137 million could potentially be appropriated toward replacing lost revenue in six targeted funding categories. Of this, the highest amount discussed for revenue replacement would be given to the health care industry to include mental health and veterans homes totaling more than $36 million.

Under the proposal, $30 million would also be set aside for rural hospital assistance grants. To expand the utilization of telemedicine, $5 million could be allocated to a grant program for patients to benefit from remote diagnosis and medical treatment.

Also discussed was the possibility of evenly dividing $34 million among historical sites and state parks.

The proposal as outlined calls for the reimbursement of counties for costs incurred for inmate care during the timeframe of March through December 2021 in the amount of $11 million.

Additionally, $20 million would be set aside for a grant program for volunteer fire department and EMS services.

Concerning infrastructure investment, water and sewer emergency projects were atop the funding list at $120 million. Exact projects that will be targeted would be prioritized by the Alabama Department of Environmental Management (ADEM). Water and sewer matching grants would be funded by a $105 million allocation, with $5 million reserved for pilot projects in areas without wastewater systems.

Regarding broadband expansion, lawmakers discussed combining $50 million in ARPA funding with $192 million from the state’s Capital Projects Fund.

The maximum amount discussed to be appropriated toward the Alabama Unemployment Insurance Trust Fund was $79.5 million to offset negative economic impacts stemming from the COVID-19 pandemic.

Lastly, roughly $8.8 million was the proposed amount to be utilized to cover the state’s incurred administrative costs.

Dylan Smith is a staff writer for Yellowhammer News. You can follow him on Twitter @DylanSmithAL