Local governments spending of federal coronavirus relief dollars on special interest groups is a waste, a Kansas policy expert said.
Kansas was awarded $1 billionin CARES Act funding. Local governments received $400 million to assist with coronavirus-related needs in their communities. So far, funds have been used to set up a homeless encampment in Lawrence County, upgrade an emergency response radio system and open a grocery store in Bourbon County, among other uses.
Not everyone thinks the imaginative spending is of good consequence for the state's economy.
“Using money designated for helping our businesses on special interest groups is a lost opportunity and a waste,” Michael Austin, director of Kansas Policy Institute's Sandlian Center for Entrepreneurial Government, told The Center Square.
Most of the funds are going to expenses directly tied to the pandemic, including testing, providing protective equipment and aiding struggling businesses. A highlighted business area is the live music industry, which was one of the first to shut down.
States have been given strict parameters within which to spend their dollars. Federal aid wasn't intended to replace missing tax revenue but only to cover expenses that arose from the pandemic.
“Thinking arbitrary government spending will cure a recession is like thinking more alcohol will cure a hangover,” Austin told The Center Square. “Spending taxpayer funds on matters that have little to do with affected businesses and families will not only fail to spur a recovery but will also saddle future generations with higher taxes and debt at nearly all levels of government.”
If federal auditors determine that a state's spending wasn't related to the pandemic, they can demand the funds be returned to Washington.
The Department of the Treasury “will probably give them some latitude, but it’s not unlimited,” Jared Walczak, vice president of state projects with the Tax Foundation, told Hays Post. “You start going out there and doing bold economic development projects that have nothing to do with COVID-19 and you’re going to get some scrutiny.”
View original Post