Where Did Livingston’s Covid Money Go? Mostly to Padding Its Savings
As Livingston Country reeled from the first Covid-19 surge in the late winter of 2020, Congress passed and President Trump signed into law the so-called CARES Act. This legislation — nicely summarized at https://usafacts.org/articles/what-will-cares-act-and-other-congressional-coronavirus-bills-do-how-big-are-they/ — provided up to $2 trillion to help individuals, families, and businesses survive and make it through the pandemic. It featured $290 billion for direct payments to nearly all American adults and more than twice that in forgivable loans to businesses that retained, rather than laid off, their employees. Up to $500 billion was focused directly on the public health response to the pandemic, including through contact tracing to identify Covid-19 hot spots.
You can be forgiven for not knowing that Livingston County government got $3.7 million from the CARES Act. (Local cities and townships got another $180,000 on top of that.) This aid came with very little press coverage, and the language was written broadly enough so that many expenses largely unrelated to the pandemic could be covered by those federal funds. Livingston County’s $3.7 million included $3.3 million directly from the feds (mostly through the Department of Health and Human Services, or “HHS”), plus about $425,000 from the feds but run through the State of Michigan, most of which was supposed to go to contact tracing and other pandemic management activities.
How did the County spend its federal CARES Act money? It quite properly beefed up the County Health Department’s staff, including hiring an epidemiologist and several nurses. But that required only one-third of the funds. Where did the rest go?
— The Sheriff’s Department got $1.292 million. It is unclear how much of this was spent for things that are pandemic-related, but our analysis of audited financials received via a Freedom of Information Act request makes clear that much of it went to items that would otherwise have been part of the County’s own budget.
— The Sheriff also got $1.086 million for the jail — partly, but far from entirely, to fund steps to keep prisoners and guards safe. Again, a number of items that would normally have come out of the County’s regular budget were instead covered by federal CARES Act funds. All told, the Sheriff’s Department took in $2.378 million from the CARES Act, or 64% of the total amount awarded.
— EMS got $565,000. A good deal of this was no doubt Covid-related, but again some went to back out existing County funds.
This use of the CARES Act money raises another question: Where are all the taxes that Livingston County residents have paid, now that the feds are picking up the tab for so much that used to be County-funded?
We don’t know exactly, but we strongly suspect that it wasn’t spent, i.e., that it’s just sitting there. Like the Delinquent Property Tax Revolving Fund, which has swelled to more than $45 million, we suspect that across County government there are large repositories of unspent tax monies. We know, for example, that almost half of the funds raised by the Veterans Millage was not spent and, just as concerning, that most of what has been spent simply backed out funding that the County was already providing before the millage was passed.
Why would the County squirrel away budgeted monies rather than using them as the taxpayers were led to expect? Why didn’t they use federal CARES Act and local Veterans Millage funds to provide NEW, ADDITIONAL services needed by residents and veterans? We can think of at least two reasons:
1. The politicians that make spending decisions don’t really care about the needs of residents. The Commissioners “serve” in gerrymandered, safely Republican districts, so it doesn’t matter if people don’t approve of their decisions, most of which are in any case made in private or in sparsely monitored Finance Committee meetings held at 7:30 AM.
2. They want to build up ever-larger cash reserves in order to help the County’s credit rating. While Republicans claim that Democrats are the party of “tax and spend,” but here in Republican Livingston County, we spend tax money for, well, nothing.
Livingston County is about to receive a much larger chunk of federal funding through the so-called American Rescue Plan, which passed early this year. This $1.9-trillion package includes $362 billion for governments “to recoup lost revenue, meet increased costs, and mitigate economic harm” from the pandemic. Our County will be getting $37.2 million, and our cities and townships as much as $10 million, more than 10 times what the CARES Act provided.
If County government couldn’t devote $3.7 million wholly to new, additional services, can it be trusted not to waste the much larger windfall that is coming our (or, really, their) way? Will they spend it on real investments like rural broadband and upgraded wastewater management, or just use it to further pad their reserves, wasting a once-in-a-generation opportunity to fix the County’s essential infrastructure?
By Dan Luria, an economist and vice chair of the Livingston County Democratic party, who lives in Hamburg Township.
