Florida’s state treasury has $6B in untapped CARES Act funds

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Nearly $6 billion in the state treasury are ready to use for COVID-19 relief, but questions remain on how the state might be able to spend it.

That money — approximately $5.9 billion from the Coronavirus Aid, Relief, and Economic Security (CARES) Act — has yet been drawn down by the state’s executive agencies. The Florida Legislature, which may meet for a Special Session over the pandemic, can also access those funds.

The Department of Financial Services, led by Chief Financial Officer Jimmy Patronis, is responsible for distributing the state’s purse. Deputy Chief Financial Officer Frank Collins, Patronis’ spokesman, provided the update in a statement to the media this week.

“The CFO is monitoring the discussions in Washington related to another federal stimulus, but is especially hopeful that the U.S. Treasury will provide additional instructions that allow for greater flexibility for use of CARES Act dollars in Florida,” Collins said.

In guidance issued Wednesday, the Treasury Department told states that the money had to be used to deal with the medical emergency caused by the outbreak. It generally could not be used for expenses that were accounted for in budgets adopted by March 27.

States can use the CARES Act cash to cover expenses incurred between March 1 and Dec. 30. Any unspent money must be returned to the federal government.

But the department did leave some wiggle room: First responders and other government employees “whose services are substantially dedicated to mitigating or responding to the COVID-19 public health emergency” can have their salaries paid with the aid from March through December, according to the guidance.

“The recent guidance from federal officials is those dollars are to be utilized exclusively for COVID-19 response efforts, as such the CFO directed the state Treasury to create a tracking code so the dollars can be better tracked in the event of future federal audits,” Collins said.

The $150 billion in aid to state and local governments is part of the $2.2 trillion relief bill passed by Congress last month. Every state will receive at least $1.2 billion, while the most populous cities and counties also receive a share.

New Jersey Gov. Phil Murphy, a Democrat, said Thursday that much of the $1.8 billion heading there is “unusable” and might have to be returned to the U.S. Treasury. Tennessee Gov. Bill Lee, a Republican, made similar comments the day before.

The National Governors Association is pushing Congress to approve an additional $500 billion to replace state and local revenue that has evaporated amid the business closures and record job losses during the pandemic.

Patronis has been calling for Florida’s budget experts to meet to provide a reassessment of the state’s projected revenue in light of COVID-19. The state’s budget chief, Amy Baker, has said her team needs more data before it can make an accurate prediction.

An analysis last month of states’ abilities to weather the financial stress of the pandemic concluded that tax revenue losses and increased Medicaid spending could put a $8.1 billion dent in Florida’s reserves under a moderate scenario.

CARES Act dollars may not be used to cover the state’s share of Medicaid, damages covered by insurance or payroll and benefits expenses for employees not substantially dedicated to mitigating or responding to the public health emergency.

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Material from The Associated Press was used in this report.