NASHVILLE, Tenn. (AP) — A Tennessee state panel is proposing another $44.6 million in federal COVID-19 relief aid to increase the payouts businesses can receive for their losses due to the pandemic.
The proposal announced at a meeting Wednesday of the state’s Financial Accountability Stimulus Group drew backlash from critics, who note that businesses will see an additional boost as the state begins cutting off extra payments to unemployed people through federal pandemic aid starting next month.
Currently, the state has reported approving $73 million through the federal Coronavirus Relief Fund for more than 3,200 businesses at an average payment of about $22,500. The group is proposing to raise the cap on payments per business from $30,000 to $100,000, saying more than 1,100 businesses have shown that they lost more than $30,000 during the pandemic. The state plans to reach out to those businesses to assess their situations and won't make the payments automatically.
“One of the things that we have worked really hard to do during the pandemic is to make sure that livelihoods are maintained, and the best way to do that is to make sure that the companies that Tennesseans work for are able to continue to operate,” Republican Gov. Bill Lee told reporters Wednesday.
Democratic state Sen. Heidi Campbell called it an “immoral double standard” to prioritize paying businesses more after Lee last month announced a halt to the extra federal unemployment aid offered amid the COVID-19 pandemic starting July 3, including the end of $300 weekly additional payments.
“In Gov. Lee’s mind, $300 a week of federal assistance for a parent who lost their job is bad, but millions worth of federal assistance for business owners is good,” Campbell, a Nashville lawmaker, said in a statement Thursday.
The increase in business payments is part of Tennessee's effort to spend down the rest of $2.3 billion in federal coronavirus relief money from the prior Coronavirus Relief Fund. The panel also recommended using the funding to cover almost $303 million in state payroll expenses eligible for reimbursement.
Officials said spending the existing federal relief cash is the priority before diving into the new recovery package, President Joe Biden's American Rescue Plan.
On Wednesday, state Department of Environment and Conservation Commissioner David Salyers announced a request of more than $1 billion for water and sewer projects, which are among the spending categories allowed under the American Rescue Plan.
The state expects a fiscal recovery fund from the law of about $3.7 billion, while Tennessee local governments will have autonomy to spend almost $2.3 billion within permitted categories, from broadband to public health improvements.
State officials mulled offering grants to match local governments if they spend their share on water and sewer initiatives. House Speaker Cameron Sexton recommended that water projects get priority over sewer investments.
The American Rescue Plan federal money must be obligated by Dec. 31, 2024 and spent by Dec 31, 2026.