Possible cut in federal funds ‘hurts’, says Evers, while Congress members urge Treasury to reverse its plan

By: - May 13, 2021 5:30 am
budget cut money Photo by Images Money | Flickr/CC BY 2.0

Photo by Images Money | Flickr CC BY 2.0

Three Wisconsin Congress members sent a letter to Treasury Secretary Janet Yellen on Wednesday, urging that the federal government stand by earlier calculations for what Wisconsin gets from the newest federal COVID-19 relief package.

On Tuesday, with the release of an interim final Treasury Department rule on implementing state and local recovery funding in the American Rescue Plan Act (ARPA), Wisconsin’s allocation, originally calculated at $3.2 billion, dropped to $2.5 billion.

State allotments are based on unemployment data. In a letter Wednesday to Yellen, Reps. Mark Pocan, Gwen Moore and Ron Kind, all Democrats, disputed the Treasury Department’s revision.

ARPA calls for the calculation to be based on unemployment data for the three months ending with December 2020, the letter states, while the Treasury Department based its new calculations on more recent unemployment data.

“We do not agree with this decision by the Department, and request that it be resolved immediately,” states the letter. It also urges the department to pay the state in a single allotment rather than dividing it into two payments up to a year apart.

In a news conference with Wisconsin reporters Wednesday, Pocan said he is trying to sort out the reason for the discrepancy between the Treasury calculations for the state’s share and the estimates from the Congressional Research Service, the original source for the $3.2 billion calculation.

“We’re going to continue to fight for additional dollars,” Pocan said. But, he added, lower state unemployment may be “the good news” that will result in less money to the state.

News of the apparent reduction in Wisconsin’s share “hurts,” Gov. Tony Evers said Wednesday, but won’t fundamentally change the state’s priorities for spending its share of the funds.

“Obviously, that $700 million [loss] makes a difference,” Evers told reporters during an online news conference Wednesday afternoon, “and [it’s] $700 million that we can help people or small businesses and others recover.”

Evers said his administration would continue to go by the spending plan it has developed for the funds, with emphasis on helping “small businesses, Main Street businesses, bars, restaurants and so on.” The shrinkage would underscore the need to coordinate with local governments, which are also receiving funds from ARPA, “to make sure that what we’re doing and what they’re doing are in concert and that we aren’t stepping on each other’s toes.”

Wisconsin hasn’t yet received any word from the Treasury Department about the possibility that the state’s share might come in two payments as much as a year apart, Evers said.

“That is a really important piece of the puzzle here,” he said, and if the government goes through with that approach it will affect how the state will distribute the funds. “We really do need to find that out,” he added. “We need that money now.”


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Erik Gunn
Erik Gunn

Senior Reporter Erik Gunn reports and writes on work and the economy, health policy and related subjects, for the Wisconsin Examiner. He spent 24 years as a freelance writer for Milwaukee Magazine, Isthmus, The Progressive, BNA Inc., and other publications, winning awards for investigative reporting, feature writing, beat coverage, business writing, and commentary. An East Coast native, he previously covered labor for The Milwaukee Journal after reporting for newspapers in upstate New York and northern Illinois. He's a graduate of Beloit College (English Comp.) and the Columbia School of Journalism. Off hours he is the Examiner's resident Springsteen and Jackson Browne fanboy and model railroad nerd.