Tennessee is seeking flexibility with COVID-19 relief funds so it can better address the problems it is facing, such as struggling small businesses and a weakened unemployment trust fund, members of a bipartisan task force discussed Tuesday.
“It’s a bipartisan effort to work together to set a framework for how it is we spend the federal stimulus and the federal relief dollars that are coming to Tennessee specifically through the CARES Act,” Gov. Bill Lee said about the group’s meeting.
State governments must follow strict guidelines for federal COVID-19 relief funding, but Lee said guidelines shift every few days and the state’s spending decisions also will change over time. He said the state plans to find creative and innovative ways to give relief to businesses and maintain the unemployment fund.
The state also hopes to use funding to backfill revenue losses, but federal guidelines currently prohibit this, and the state would need congressional approval for doing it.
The federal government is allocating nearly $5 billion to the state. Slightly more than $3 billion already has been sent to the Tennessee.
Members of the task force, called the Stimulus Financial Accountability Group, include the governor, Finance Administration Commissioner Butch Eley and COVID-19 Unified-Command Director Stuart McWhorter, who is leaving the administration at the end of the month. It also includes lawmakers from both parties.
During Tuesday’s meeting, Lee told members one of his main concerns is getting money to businesses that were required by his executive orders to shut down during the COVID-19 pandemic, which will help stimulate the economy. He said he wants more flexibility from the federal government to ensure that every business that deserves the funds can receive them.
Rep. Harold Love, D-Nashville, said not every business was able to access federal COVID-19 loans and cautioned Lee from making similar decisions with money given to the state. He said many minority-owned businesses struggled to receive those funds.
With the unemployment trust fund losing money, Eley said the state is trying to prevent the fund from dipping below $1 billion. He said he is working with the Department of Labor to make sure it does not happen because if it does, the state will have to tap into the private sector to increase its contribution to pay for the fund.
Eley said if the state continued on the pace it’s been on, the fund would run dry by the end of the year. However, with Tennessee reopening its economy, he said it will not burn up that quickly.
