By GARRY RAYNO, InDepthNH.org
CONCORD – After two weeks of testimony from state agencies, businesses, nonprofits, financial institutions, hospitals and other health-care providers, educators, higher education, first responders, social service providers and representatives of other niches in the state’s economy, it is time to decide where the $1.25 billion in federal CARES Act money will go.
The Legislative Advisory Committee of the Governor’s Office for Emergency Relief and Recovery begins settings its priorities this week for the use of the federal funds. The Stakeholder Advisory Board is a little behind the lawmakers but will soon begin deciding what it believes are the best uses of the federal money.
The two committees will make recommendations and Gov. Chris Sununu and his office will decide what to do with the money.
While $1.25 billion sounds like a lot of money — it is about half of what the state’s general fund raises to support the 2020 fiscal year state operating budget — requests made in just two sessions of the legislative committee two weeks ago exceeded the state’s allotment.
The needs and financial losses for businesses like restaurants and hotels, and health-care providers from hospitals to dentists and private mental health practitioners, to area agencies and other social service providers, to arts and cultural facilities and artists, are enormous, but no one is likely to be made whole and many will go out of business due to the coronavirus epidemic and the economic shutdown.
The hospitality industry and retail sales have been hit particularly hard and the attrition in those industries will probably be significant, while recovery for those remaining will take years, not months.
Despite efforts to prop up child daycare centers and early learning facilities, that industry has been hard hit by the pandemic as have the arts from music halls to museums and the artists, musicians and actors.
Education has been turned upside down, moving from classrooms to the internet and cell towers connecting educators and students.
Universities and colleges closed campuses, returned tens of millions of dollars in room and board fees, creating a financial hole that may continue this fall if campuses do not reopen.
Many dairy farmers face a bleak future as milk prices crashed when closed schools and restaurants greatly limited their market.
The list goes on and on as the virus has spread throughout the state with Hillsborough and Rockingham counties — next to the coronavirus hotspot of Northeast Massachusetts — with about two-third of the know infections.
No Money for Tax Losses
Where the CARES Act money may be spent is not a simple decision.
The money can only be used for un-budgeted spending related to the public health emergency, not for backfilling weak state and municipal revenue streams as many had hoped.
Revenue shortfalls would have taken a significant amount of the $1.25 billion, but the tax deficits are expected to be addressed in subsequent federal relief packages. The state and local revenue losses will total hundred of millions of dollars this calendar year.
Helping hospitals is everyone’s priority, however, the worst fears of a coronavirus surge overwhelming hospitals has not happened.
When the hospitals stopped performing lucrative voluntary procedures to prepare for the epidemic, the hospital association said the collective loss was about $200 million a month.
Now that hospitals may begin performing “time sensitive” procedures, along with MRIs and CT scans, biopsies etc., the need for that kind of money every month will be diminished.
Perhaps the biggest impact has been on the smaller rural hospitals, although there have been layoffs and furloughs at almost all health systems.
Hospitals received some of the $165 million the state is slated to receive under the public health and social services fund from an earlier federal package and more funding was announced this weekend. The earlier aid went to about 1,500 health care providers in the state.
While hospitals still need assistance, it may not be as much as originally thought.
Another target for significant help is the hospitality industry, but not two-thirds of the state’s CARES Act allocation requested initially.
There has been discussion about establishing a fund to make low- or no-interest loans to restaurants, hotels and tourist attractions to help them survive as the economy slowly improves.
An organization like the Business Finance Authority or Community Development Authority that are familiar with vetting applications would oversee the fund.
More than $2 billion in forgivable loans have been made to 11,600 New Hampshire businesses under the Payroll Protection Program during the first round.
Additional money was recently approved and businesses that did not receive money during the first round may receive some help under the new allocation, but that will not be enough to offset the devastating economic impact of the virus.
The legislative committee also discussed using an organization like the New Hampshire Charitable Foundation to oversee another fund to help non-profit organizations that provide many of the state’s social services through state and federal contracts, and the nonprofit arts and cultural organizations as well.
There are separate funds available in the CARES Act and other federal legislation for public and postsecondary education.
There is also several million dollars in a discretionary fund controlled by the governor’s office to help with coronavirus related education costs and over $80 million in other funds to help offset some losses.
How much more money from the CARES Act beyond that may not be seen as a top priority with all the needs the two advisory committees have heard or will hear in the next week or so.
The child daycare and early learning businesses have been reduced to about 10 percent of those operating before the pandemic hit.
Even then affordability for lower-paid workers was a concern.
State and industry officials urged the legislative committee to view this time as an opportunity to rebuild the system making it both more affordable to lower-paid workers and financially sustainable.
“The New Hampshire economy cannot reopen or operate to capacity without access to affordable childcare,” said Department of Health and Human Services Associate Commissioner of Human Services and Behavioral Health Chris Tappan on Friday speaking to the legislative committee. “Many workers will have to make the difficult decision between work or going to unemployment benefits because of childcare.”
Other areas needing help are the community physical and mental health centers, the 10 area agencies, long-term care facilities that have seen the greatest impact of the virus for infections and deaths, and emergency services and responders, including the medical personnel on the front lines.
In the Division of Public Health’s most recent data released Friday, healthcare workers comprise 30 percent of those infected with COVID-19 in the state, 7 percent of the hospitalizations and 3 percent of the deaths.
Look for the Legislative Advisory Committee to suggest holding back some of the $1.25 billion to see how the initial funding goes before recommending additional money for various industries or organizations. Also the committee is likely to suggest using money to leverage help from state financial institutions for businesses.
All the money has to be obligated or spent before the year ends and more is coming.
Garry Rayno may be reached at firstname.lastname@example.org.
Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings for InDepthNH.org. Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. Rayno lives with his wife Carolyn in New London.
InDepthNH.org is New Hampshire’s only nonprofit, online news outlet dedicated to reporting ethical, unbiased news and diverse opinions and columns.