Federal Government Asks For $465 Million Back As Legislators Look For Fix 

A surprise notification from the federal government that the state must return nearly half a billion dollars in COVID-19 funds has several major funding issues on hold. 

These last days of the regular session are typically when state budget issues are debated and resolved. 

But when federal dollars were funneled into West Virginia local school districts in the early days of the pandemic, rules on how to spend that money did not come until later.  

Facing crucial budget bill deliberations, the House Finance Committee Chairman, Del. Vernon Criss, R-Wood, said it was a shock when learning this week the federal government was looking at a $465 million clawback of the state’s CARES Act education spending.

“It was just amazing that the feds can do something like this to you,” Criss said. “We’re not the only state they’re doing it today. There are other states that are in the same position. I don’t know to what degree, but this is a sizable amount of money to the state of West Virginia.”

It’s not just education funding that’s in jeopardy. The budget bill passed by the Senate this week did not include Social Security tax cuts and has no mention of state employee pay raises. The House Finance Committee Minority Chairman, Del. Larry Rowe, D-Kanawha, is concerned about the effect on a number of what he calls programming possibilities.

“West Virginia State is in for a $50 million agriculture lab that they need,” Rowe said. “And this, you know, will put that kind of a project in jeopardy in a new project. So and if it moves off several years, that would be a real problem.” 

Rowe says he’s concerned this could also affect senior services projects. 

Officials from Gov. Jim Justice’s office say the federal expectation was the state would match the federal pandemic grants going to education.

Sen. Eric Tarr, R-Putnam, the Senate Finance chairman, says that’s easier said than done. 

“West Virginia is very unique, and how we fund K-12 education relative to a lot of other states,” Tarr said. “Because we’re formulary based, so you can’t just suddenly increase the formula with some of the rules they had around the CARES dollars the way that they would need to spend.”

Now, Criss says the governor’s office is working with the feds on a waiver, showing that they are providing more state money toward education. 

“Things like the school building authority that we appropriated, then we authorized the spending a couple days ago, we authorized the monies to go into the account yesterday,” Criss said.  “So now is as that bill progresses, then we’ll have part of that $465 million taken care of.”

Criss said the governor’s office is also trying to communicate to the federal government how the state used that money in accordance with the state’s statutes and formulas. 

“We’ve done the pay raises with the benefit package, we’ve also confirmed that we’re continuing to put in the monies into the Teachers Retirement Program in the 40-year plan as well as the current amount needed,” Criss said.

Criss, Tarr and the governor’s office all seem confident, with hopes for a quick resolution and no loss of funds. But with a week left in the regular session and no budget yet passed, Criss says the timing couldn’t be worse.

“It’s just poor timing on the Fed announcement to the governor’s office,” Criss said. “And we are here today, knowing that we have one week left, we need to get the budget process concluded on both sides so we could start putting the bills together and come up with a compromise for the first week. So everybody will have an opportunity to see what we’ve got.”

The deadline for putting the budget in isn’t until June 30. Criss said that while the deadline for the budget isn’t technically until June 30, he would have to break a promise and nearly decade tradition of having the budget done by the 60th day of session. 

“We’re going to fix it. It’s a one-time thing,” Criss said. “We’ve got the funds available. And it’s just a matter of trying to figure out where they all have to go before the first of July.”

Criss said he thinks that everyone currently included in the budget will stay covered, but that it’s an evolving situation. 

“You know, stay tuned,” Criss said.