The state’s School Building Authority made history on Wednesday supplementing needy school districts statewide while bringing about a potential end to concerns over a nearly half billion-dollar federal clawback.
The state’s School Building Authority made history on Wednesday supplementing needy school districts statewide while bringing about a potential end to concerns about a nearly half billion-dollar federal clawback.
Applause cascaded through the unusually packed School Building Authority (SBA) meeting when Gov. Jim Justice announced $150 million in funding. This money, recently approved by the legislature, is in addition to the $111 million already designated for 2024 school construction projects.
Usually the SBA has to make limited funding decisions on which school district can replace failing infrastructure, enhance school safety protocols, or upgrade education technology. This is the first time in its history the SBA could say yes to every school district request.
Authority executive director Andy Neptune said school district superintendents who thought their requests had been rejected were elated.
SBA Executive Director Andy Neptune reads off school districts with project funding approved. Photo by Randy Yohe/West Virginia Public Broadcasting.
“To be able to give the money, the finance that we’re going to give to them today, to get their projects done, I know is a big burden lifted off of them from the personal conversations that I’ve had with them,” Neptune said.
Sitting in to chair the meeting, Justice told the story of a Berkeley County grade schooler’s reaction on Tuesday to learning he was getting a new school building. The student told Justice, “Thanks for making me feel happy.” Justice also said the $150 million, coupled with other state education funding, will help see a U.S. Department of Education waiver granted. He said that will remove the threat of a near half billion-dollar federal clawback regarding state education spending during the pandemic.
“That’s not going to happen,” Justice said. “There’s not going to be a clawback, unless people go back on their word and everything. And I feel all the assurances that that’s not going to happen.”
The bonus dollars also let the SBA approve major improvements and needs projects rejected in the past funding cycle.
For a listing of SBA school district project requests granted at today’s meeting, click here,
Much of the debate in the House of Delegates Tuesday morning focused on satisfying a potential $465 million federal clawback regarding the state’s spending on education. When it came to the budget debate, some promised program funding that was not education related, fell by the wayside.
Much of the debate in the House of Delegates Tuesday morning focused on satisfying a potential $465 million federal “clawback” regarding the state’s spending on education. When it came to the budget debate, some promised program funding that was not education related fell by the wayside.
House Finance Committee Chairman Vernon Criss, R-Wood, wanted to make the reason behind passing Senate Bill 701 perfectly clear. The bill Supplements and amends appropriations to the Department of Education, School Construction Fund.
The bill appropriates $150 million to the School Building Authority, satisfying all the reconstruction requests made by state school districts.
Criss said the allocation intentionally goes toward satisfying the executive branch goal of showing in-kind state education funding to waive a potential $465 million-dollar federal clawback. The issue came up last week over concerns that the state did not spend enough money on education to match federal covid money.
“There are HVAC projects,” Criss said. “There were actually maybe two or three actual new schools involved in the projects, some roof projects, but cumulative, it was $150 million. And that these dollars will help, from what the governor’s office explained, would help towards the negotiations with the federal Department of Education”
The bill passed 94-2 and now goes to the governor.
Debate on the House Budget Bill 4025 began with a series of amendments proposed by Democrats.
Del. Larry Rowe, D-Kanawha, asked that the governor’s request for a $50 million agriculture lab at West Virginia State University be funded from budget back-end surplus money.
“This is needed. This will benefit us,” Rowe said. “I just can’t tell you how much it will lift West Virginia State into a new level of research and delivery of agricultural services throughout southern West Virginia.”
Del. Kayla Young, D-Kanawha, proposed an amendment to allocate $44 million from surplus budget funds for child care programs. The same programs were championed early on by Republican leadership and promised by Gov. Jim Justice.
“Last week, the federal government mandated that we do enrollment versus attendance to pay for child care,” Young said. “There is funding proposed with the federal government, but we all know they’re not so fast to do anything. And our child care centers are in desperate need of this money to keep maintaining, having all their services and keeping all the slots open.”
Concerned over balancing monies being poured into education, House Finance Committee Co-Chair Del. John Hardy, R-Berkeley, urged and got a voice vote rejection for every Democrat proposed amendment.
“I think that we’re very, very early in this process of the federal government coming out in front of this,” Hardy said. “Not being a priority of this legislature right now to be putting money being spent in the back of the budget as surplus revenue.”
With program funding concerns mounting and talk of a May Special Legislative Session to finalize a budget, Del. Daniel Linville, R-Cabell, questioned a possibly wasted effort.
“So all these amendments are fashioned to House Bill 4025. Is that right?” Linville asked Hardy. “Yes,” Hardy said. “And yet the vehicle that’s going to be the budget is Senate Bill 200, is that right?” Linville said. “So everything that we’re doing here does not matter in the least does it?”
The House postponed any more debate on HB 4025 for one day, but they were far from done.
After a fire drill, the House returned to session and took up the Senate’s budget bill that Linville referred to. Criss walked through every major department in the budget and indicated where the Senate budget was different from the governor’s proposed budget. After a 45-minute discussion on Senate Bill 200, it passed by a 74 to 16 vote.
The two chambers will have to come together in a budget conference committee to work out differences between the two bills.
In a Wednesday media briefing, Gov. Jim Justice and Revenue Secretary Dave Hardy defined, and added to, earlier released details on how the state will spend some of its more than $1.8 billion budget surplus.
In a Wednesday media briefing, Gov. Jim Justice and Revenue Secretary Dave Hardy defined, and added to, earlier released details on how the state will spend some of its more than $1.8 billion budget surplus.
Hardy said a little over $1.1 billion is designated as surplus section spending. He said that covers 32 different 2023 budget items passed by the legislature and signed by the governor.
He said $40 million goes to the School Building Authority to cover the inflationary rise of school building costs, and $125 million toward the construction of a new consolidated state laboratory.
“Our state laboratories are deficient,” Hardy said. “Our state police, our health department and our agricultural secretary have all stated that our laboratories are ancient and obsolete.”
Hardy made note that another $282 million is set aside for deferred maintenance for state colleges, universities and correctional facilities.
“This is taking the benefit of the surplus and applying it to deferred maintenance, that’s gone on sometimes 20 or 30 years that it’s been neglected,” he said.
Hardy said $400 million goes to the personal income tax reserve fund, to pay income tax refunds as they come due. Other items include a one-time $50 million payment to the West Virginia University Cancer Institute and $29 million to the West Virginia School of Osteopathic Medicine in Lewisburg.
“The surplus section has become the way that we take the benefit of holding down our expenses, holding down our base budget, waiting till the fiscal year is over and then allocating dollars toward unmet needs,” Hardy said.
Find a more detailed listing of Fiscal Year 2023 surplus section spending here.
This time of year, the Hatfield McCoy trail system in southern West Virginia usually is buzzing with ATVs. In fact, Jeffrey Lusk, director of the Hatfield McCoy Regional Recreation Authority, said he makes almost half of his permit sales for the year from March 1 to April 30.
But for towns and local businesses along the trail system, things are pretty quiet these days. The Hatfield McCoy trails have been closed since March 20, by an executive order from Governor Jim Justice to enforce social distancing and public health recommendations from the federal government.
This includes Bramwell, in Mercer County, where the Bramwell Corner Shop would normally be enjoying traffic from the nearby Pocahontas Trail.
“Our sales are just very, very low right now,” manager Mandy Fink said on Tuesday, April 21.
Credit Emily Allen / West Virginia Public Broadcasting
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West Virginia Public Broadcasting
From A Hatfield McCoy ATV trail head in Logan County, in October 2019. The trails have been closed since March 20, 2020, due to efforts to promote social distancing.
The Corner Shop, like most restaurants throughout the state, is serving takeout orders only.
“We have a lot of local people that love the corner shop and they eat here,” Fink said, “but we also have a lot of revenue that comes off the trails, and with the trails closed right now none of that’s happening.”
For many locally owned businesses in southern West Virginia, warmer months bring in the majority of revenue, because it is when out-of-towners are most likely to visit.
On Monday, Gov. Jim Justice shared plans to reopen various operations on a six-week schedule, assuming the state continues to keep its cumulative COVID-19 positive test rate under 3 percent for three consecutive days. Still, local businesses will remain impacted by their time offline and the uncertainty around when they will reopen, and the restrictions they will continue to face.
Take Adventures on the Gorge, a rafting and outdoor tourism company based in Fayette County, which is so popular in late summer that the CEO Roger Wilson described their peak season as a “100-day war.”
“It starts on June 15, and runs through roughly September 15,” Wilson said. “That’s when the majority of our people are coming here.”
Wilson’s company employs some 400 workers every year. Normally by April he would be training new guides, but this year he said he is depending on returning senior guides to save money and avoid overcrowding.
Local Businesses, Tourism Typically A Much Needed Employer
To help with paychecks for existing employees, Wilson said Adventures on the Gorge received a loan through the Paycheck Protection Program, or PPP, through the first relief package passed by Congress.
“If we had not gotten that one, there would be about 34 people laid off immediately,” he said. “It would have made opening up for us really hard.”
Credit Caitlin Tan / West Virginia Public Broadcasting
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West Virginia Public Broadcasting
A group river rafting on the New River through Adventures on the Gorge in summer 2019. CEO Roger Wilson said he expects raft trips to operate around half capacity to encourage social distancing.
But, according to the National Federation of Independent Businesses, the country’s largest small business association, about 80 percent of small businesses in the U.S. had yet to hear back about the loans they applied for, as of April 20.
That included the corner shop in Bramwell. Manager Fink said they applied in early April, and as of April 27, the shop still had not heard anything back.
“We definitely have so many employees that cannot work at all,” Fink said, adding that the shop usually hires more people during its busier summer season. “And those of us that are working [we’re] working at least half the hours that we typically would.”
Congress passed a fourth relief package on April 23, including $321 billion for a second round of PPP loans. This was after the $349 billion Congress gave the program initially, which ran out less than two weeks after its allocation.
By Tuesday afternoon, the U.S. Small Business Administration had processed nearly 476,000 loans, according to SBA spokesman Chris Hatch. He added that the loans approved so far total more than $52 billion, which is being administered by 5,200 banks and other lenders.
Director Lusk at the Hatfield McCoy Regional Trails Authority said his organization is helping businesses that partner with the trails — mostly lodging and ATV rentals — access as much capital and assistance as possible.
Many of the businesses by the trail are family-owned with small payrolls, meaning they would benefit more from an Economic Injury or Disaster Loan, or EIDL, which are geared more toward overhead costs, and less toward pay checks. Those loans have also been difficult for some to get.
The trails authority has had to temporarily lay off 51 of its own full-time and part-time employees, who normally would sell permits at trailheads and keep paths clear. Lusk said as soon as the trails are allowed to reopen, all 51 employees could return to work.
Credit Chuck Roberts / West Virginia Public Broadcasting
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West Virginia Public Broadcasting
ATV-riders drive down a road in Gilbert, Mingo County, in July 2017. With the nearby Hatfield McCoy Trail system closed since March 20, 2020, businesses throughout southern West Virginia are noticing less revenue than previous springs.
Missing out on permit sales in late March and much of April has amounted to a roughly $1.1 million loss, he added.
“We’re optimistic that as the state begins to reopen, we’ll be in one of those early stages of reopening,” Lusk said.
The Main Street Struggle
Just outside Fayetteville at the Arrowhead Bike Farm, co-owner Rich Ireland said most of his workers are receiving unemployment.
But like Adventures on the Gorge, the Bike Farm, which has a bike shop, restaurant, beer garden and camping sites,also secured a small PPP loan which can be used for paychecks and some overhead costs.
Although they are not in peak season yet, Ireland said he is concerned about how many people will be vacationing this summer.
“I think we’ll have a season. I don’t know how good it’ll be — I don’t know if we’ll meet our expectations. But hopefully it’ll be you know, one of those where we just took a growth year — a pause,” Ireland said.
At the Meadow Bridge Drive-In in Fayette County, owner Howard McClanahan is usually open from May to October, the first three months of which are the most important for revenue.
“We’ve just been taking our time this year because we know we’re not going to get open,” said McClanahan, who added they did not apply for a loan. “I don’t see us opening before the first of June.”
It is expensive to run a drive-in theater. McClanahan said when he first took over in the 80s, each year he needed around a couple thousand dollars just to open.
“This past year it’s gone up to almost, say, around $9,000 just to get open,” he said.
There is a risk the pandemic will hurt them years from now. Not only is the Meadow Bridge Drive-In a longstanding business, open since the 1950s, but it is one of only a few drive-ins left in the state.
Ireland, co-owner of the bike farm, is one of those concerned about the lifespan of the small businesses, new and old, that give West Virginia so much character, and draw tourists from around the region.
“I think it’s going to be a shame if all are left are going to be big chain restaurants or big stores,” Ireland said.
Reports indicate that quite a few nationwide chain businesses did qualify for the small business loans, but at least a few have returned them.
Teena Merlin owns a tattoo shop in Madison, Boone County, and she was preparing to open a coffee house before non-essential businesses had to close. She said last week she was unsuccessful applying for the loans.
The pandemic could hurt shops like her own in communities that have been trying to rebuild since the decline of coal, Merlin said.
“Main Street, in little towns like this, there are lots of little things like that, and they’re trying to revitalize communities,” she said. “This is really bad for small, struggling towns who are trying to rebuild.”
Several of the small businesses interviewed that did not qualify for a loan said they plan on re-applying again for a tiny fraction of the billions of dollars Congress has allocated in the new relief package.
This story is part of West Virginia Public Broadcasting’s Southern Coalfields Reporting Project which is supported by a grant from the National Coal Heritage Area Authority.
There are only two weeks left for survivors of June’s devastating flooding to apply for federal grants or loans.
The deadline to apply for disaster assistance with either the Federal Emergency Management Agency or the U.S. Small Business Administration is on Wednesday, August 24.
Survivors have been approved for grants and loans of more than $94 million.
More than $31 million has been approved by FEMA for individual housing assistance, nearly $6 million in other needs, over $4 million in public assistance and more than $24,000 in Disaster Unemployment.
The SBA approved 599 low-interest disaster loans of more than $39 million, and 941 National Flood Insurance Program claims have been filed with more than $12 million in payouts.
On August 13, Disaster Recovery Centers will be operating on new hours – 9 a.m. to 5 p.m. Monday through Friday and 10 a.m. to 2 p.m. on Saturdays. DRCs are closed on Sundays.
Businesses affected by the historic flooding two weeks ago have a chance to get some help as they rebuild.
The United States Small Business Administration Office of Disaster Assistance has set up two Business Recovery Centers in Charleston and Maxwelton in Greenbrier County.
“Businesses can be [a] small business, large business, or non-profit organizations,” explained Mary Gibson, Public Affairs Specialist for the SBA, “They can come into this center and get assistance with their application.”
Gibson says all three are eligible for physical damage assistance, but only small businesses have access to both physical damage and more extensive economic injury assistance.
Businesses can receive up to $2 million through an SBA loan, and pay it back over a period of 30-years with as low as a 4 percent interest rate. The first $25,000 can be obtained without collateral.
Those interested can visit one of the centers for help, or they can also fill out their application online.
Certain paperwork will be needed like tax returns, but the SBA is giving ample time for folks to get ahold of documentation if it was damaged in the floods.
Business owners have until August 24 to submit an application for physical damage, but small businesses seeking economic injury assistance have until March 27, 2017.
W.Va. Business Recovery Centers:
Charleston Area Alliance, 1116 Smith Street, Charleston, West Virginia, 25301
Greenbrier Valley Economic Development Corporation, 804 Industrial Park Road, Suite 5, Maxwelton, West Virginia, 24957
