Here’s what Kentucky will get from the latest $1.9 trillion COVID-19 relief package
Individuals in Kentucky will get an estimated $5 billion from the $1.9 trillion COVID-19 economic relief package that Congress expects to pass this week, state budget director John Hicks told lawmakers Tuesday.
Hicks said that total includes stimulus checks of $1,400 per person to Kentuckians earning up to $75,000 per year; a temporary expansion of the child tax credit, making it worth as much as $3,600 for children up to age 5 and as much as $3,000 for children 6 to 17; an extension of $300-per-week federal unemployment benefits through September; and low-income household assistance with groceries and utility bills.
Separately, Kentucky’s state government should get $2.4 billion to spend on coronavirus-related expenses by the end of 2024, Hicks told a conference committee of House and Senate members who are writing the Fiscal Year 2022 state budget.
Apart from covering COVID-19 expenses, the funds can be used to offset revenues lost due to the pandemic in order to maintain critical services and to avoid layoffs of essential workers; to provide additional assistance to residents and small businesses; and to invest in water, sewer and broadband infrastructure.
State and local governments can use their funds to pay certain essential workers “premium pay” of up to $13 an hour in addition to their regular salary for work performed during the pandemic. And the state can repay the federal government for its borrowed unemployment insurance funds, which topped $500 million as of January.
Kentucky’s local governments will divide a separate stream of $1.6 billion among themselves for their own pandemic expenses, Hicks said. K-12 schools and higher education in Kentucky will get many hundreds of millions of dollars through their own sources in the relief package, although not all of those numbers are yet known, he said.
Although Kentucky officials still await detailed instructions from the U.S. Treasury Department, Hicks said, language in the relief package seems to give the states a lot of freedom in how they spend the money, except for the fact that it can’t be used to cut taxes or pay down pension debt. None of it can be saved beyond the Dec. 31, 2024 spending deadline, he added.
Last April, the first federal COVID-19 relief package — dubbed the CARES Act — sent $2.41 billion to Kentucky, with the largest share, $1.59 billion, going to the state government.
State lawmakers who this week are writing the next $11 billion state budget asked Hicks several questions about how the infusion of federal dollars might be useful.
For example, Senate President Robert Stivers, R-Manchester, said a pending House bill proposes spending $250 million in state funds on improved broadband access for under-served communities. But the relief package lets states use their federal money on broadband infrastructure, which means lawmakers could preserve that $250 million in state funds for something else, Stivers said.
“This is very exciting,” said state Sen. Morgan McGarvey, D-Louisville. There should be enough money in the relief package to connect every Kentuckian who needs it with clean drinking water and fast Internet access, McGarvey said.
However, some lawmakers in the legislature’s Republican majority expressed concern with the enormous relief package, which passed Congress strictly on the votes of Democrats. Senate budget chairman Chris McDaniel, R-Taylor Mill, asked Hicks about the risks of inflation as Congress spends trillions of dollars on stimulus packages.
Hicks said there are more than 10 million unemployed Americans today, and widespread, long-term joblessness appears to be the primary concern of national economic leaders at present, not rising wages and prices.
“With that many unemployed, you know, you’re not going to have wage pressures,” Hicks told McDaniel.
The chairman of the House budget committee, state Rep. Jason Petrie, R-Elkton, said he is concerned that he and his colleagues are getting information about the relief package too late to be of much use for the state budget they are writing this month. The legislature must adjourn by March 30.
It would be “imprudent” for the legislature to pass a budget in the next couple of weeks that incorporated large sums of one-time federal money without fully understanding how those dollars are meant to be used, Petrie said. Instead, he said, he is inclined to pass a conservative one-year spending plan now and then return to Frankfort in January, when lawmakers can craft their usual two-year state budget that includes these federal funds.
This story was originally published March 9, 2021 at 12:31 PM.
