CHARLESTON, WV (WOAY) – U.S. Senator Joe Manchin (D-WV) led 46 Senators in calling on U.S. Treasury Department Secretary Steven Mnuchin to revise the Treasury guidance for how Governors can distribute Coronavirus Relief Funds to their states. West Virginia received $1.25 billion provided by the Coronavirus Relief Fund established in the CARES Act; however, while states can use these funds to respond directly to the COVID-19 pandemic, Treasury has prohibited the use of these funds to make up for reduced revenues resulting from the COVID-19 pandemic.
The Senators said in part, “We all have a common interest in preserving as much of our economy as possible so that we are well positioned for a robust recovery. A critical component of our economy is our state, Tribal, and local governments as they not only serve as customers for our local businesses, but also provide the essential services, such as effective law enforcement, public infrastructure, a strong education system, and other necessary conditions that provide the business certainty that make our country attractive to businesses and investors throughout the world. We should preserve and maintain this critical comparative advantage. To avoid distracting states, Tribes, and localities from meeting the crisis at hand, the Treasury Department should publicly confirm that states, Tribes and localities may use these funds to maintain their essential services as the CARES Act clearly permits.”
Senator Manchin continues to advocate for dedicated and flexible funding for state and local governments to address lost revenues, as well as funding for essential services in response to the COVID-19 pandemic. Local governments provide critical services and are significant employers in our communities, but dramatic reductions in revenues as a result of the COVID-19 pandemic are threatening their efforts. The Coronavirus Relief Fund was established by Congress to relieve pressure on state budgets and meant to ensure they can maintain public services. But when the U.S. Treasury Department issued its initial Coronavirus Relief Fund guidance for State, Territorial, Local, and Tribal Governments, it included language specifically prohibiting the use of these funds for lost revenues. The Senators urged the Treasury Department to revise the language so that Governors can address this critical need.
The letter can be read in full below or viewed here.
Dear Secretary Mnuchin:
We write regarding the Treasury Department’s Coronavirus Relief Fund Guidance to urge you to promptly revise your interpretation so states, Tribal, and local governments can use these funds to prevent further economic damage.
While the term “lost revenue” does not appear specifically in Title V of the Coronavirus Aid, Relief and Economic Security (CARES) Act, a plain text reading of the law leads to the logical conclusion that lost or delayed revenues are a direct cost created by the coronavirus that were never accounted for in any budget. Therefore, we believe it is fully within your authority and the intent of the CARES Act that these funds may be used to replace lost or delayed tax revenues and maintain public services. In the midst of an economic collapse, the intent of the entire CARES Act is to provide flexible help to a wide range of Americans. To prevent the flexible use of these relief funds is a choice that is neither required nor intended by law.
We are not alone in this view. Governors and Senators from both sides of the aisle have set aside ideology and urged you to follow the law as written instead of creating more bureaucratic red tape in the middle of a public health emergency and ensuing economic crisis. Of all the regulations that this Administration seeks to cut, it should start with this one.
We all have a common interest in preserving as much of our economy as possible so that we are well positioned for a robust recovery. A critical component of our economy is our state, Tribal, and local governments as they not only serve as customers for our local businesses, but also provide the essential services, such as effective law enforcement, public infrastructure, a strong education system, and other necessary conditions that provide the business certainty that make our country attractive to businesses and investors throughout the world. We should preserve and maintain this critical comparative advantage.
To avoid distracting states, Tribes, and localities from meeting the crisis at hand, the Treasury Department should publicly confirm that states, Tribes and localities may use these funds to maintain their essential services as the CARES Act clearly permits.
We thank you for your consideration and urge you to act promptly.
