MONTGOMERY — Alabama is set to receive more than $4 billion from the COVID-19 relief and stimulus package enacted this week.
The bill, titled the American Rescue Plan Act, was passed by Congress this week and signed into law by President Joe Biden on Thursday. Spending in the bill totals $1.9 trillion, including $350 billion directed to state and local governments.
According to the Alabama Department of Finance, Alabama’s share of that will be $4.043 billion. Department spokesman Susan Wilhelm confirmed to Alabama Daily News that of that money:
- $2.1 billion is earmarked for a state relief fund.
- $192 million will go toward a state capital projects fund.
- $417 million will go to metropolitan cities,
- $362 million will go to non-county municipalities.
- $951 million will go to counties.
Beyond those totals, Wilhelm said it is too early to say exactly how the funds will be distributed.
“We are continuing to review the act as well as other resources for the specifics of how the funds will be distributed and how they should be administered,” she said.
Those totals do not include the funds from the new law that will be sent directly to Alabamians and businesses.
Last year, the state received $1.7 billion from the CARES Act passed in March 2020, which kicked off a turf war between the Legislature and Gov. Kay Ivey over how to and who had the authority to spend it. Eventually the two sides agreed to legislation that divided up the money into different “buckets” and charged the Department of Finance with administering the majority of funds.
“I don’t see that occurring again,” Sen. Greg Albritton, R-Range, told Alabama Daily News today. He’s chairman of the Senate General Fund budget committee. He said that process resulted in a lot of controversies.
The final bill signed by Ivey included a provision intending to give the Legislature domain over appropriating any further federal relief money. A similar provision is in the General Fund budget passed by the House of Representatives last week.
Rep. Steve Clouse, the House General Fund budget committee chairman, said state leaders will have discretion over about $2.3 billion of the new dollars. He said both the executive and legislative branches “will have a seat at the table.”
“Just like with the regular budget, the governor proposes and the Legislature disposes,” Clouse, R-Ozark, said.
A supplemental appropriation bill is likely.
Ivey Press Secretary Gina Maiola said the Governor’s Office is reviewing details of the bill to determine how to proceed.
“With the president just signing the massive bill into law today, there is some work to be done to sift through it all,” Maiola said. “Our office is working closely with the Finance Department to determine what this means for Alabama.”
Sen. Arthur Orr, R-Decatur, said the amount of federal dollars in the three relief packages now passed by Congress is “staggering.”
“We’ve got to be very responsible and good fiscal stewards of this overwhelming amount of money,” said Orr, the Senate’s education budget committee chairman.
Albritton said information he’s received said the money could arrive within 60 days, which would fall within the timeframe of the current legislative session. He said appropriation discussions have already begun.
“It’s going to be in our budget process even as we talk,” Albritton said. “I think we’re going to be better at it this next go around, plus we have a longer timeframe. We’re going to work to do this right and openly.”
Albritton said the spending parameters passed by Congress are less strict than last year’s package. For instance, states will have until December 2024 to spend the money, while the last package originally required states to spend it by the end of 2020.
“But that’s going to require us on the state level to become the gatekeepers,” Albritton said. “We have to find the appropriate safeguards, budgeting and reports that will allow this to be done effectively, quickly and openly.”
“This time, we’ve got a lot more time to make decisions,” Clouse agreed.
Compared to CARES money, there are fewer strings attached and no cumbersome reimbursement process in which agencies first had to spend their own money and then get the federal dollars, Clouse said.
“We’ve got more time to think about this,” Clouse said. “I think we should think long-term about some capital projects, that type of thing.”
There are some restrictions on the money, including that it can’t be used to cut taxes.
“But the money that could be spent on broadband, tourism sites and other important areas of our economy necessitate that we must be very strategic in our decision making but realizing the money must be spent by December 2024,” Orr said.
Similarly, the local counties and cities will have to be responsible for the money they directly receive.
“They’re going to have to be forward looking and strategic about how they spend what they’ll see in this one-time occurrence,” Orr said.
Most of the education funding in the federal package will go directly to institutions, Orr said, so there won’t be many appropriation decisions at the state level for schools.
“The General Fund is a completely different story,” Orr said.