Report: Wisconsin got less money than other states for pandemic relief

By Erik Gunn | Wisconsin Examiner

Wisconsin has received disproportionately less money than most other states from federal pandemic relief programs, according to a new report.

It has also spent that money differently — focusing on pandemic economic aid rather than patching up holes in the state budget.

The report, produced by the Wisconsin Policy Forum,  says the pandemic funding allocations followed what has been for Wisconsin a familiar pattern: less federal funding than the rest of the country typically receives, regardless of the population.

The report looks primarily at how Wisconsin has spent the money it received from the American Rescue Plan Act (ARPA). It also considers spending from the state’s share of funds in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

While nearly one out of four states used funds from the pandemic relief programs to shore up state and local budgets, according to the report, Wisconsin has avoided doing that, buoyed by a jobless rate lower than the national average and a record budget surplus.

Instead, the state prioritized aid to small business and industries affected by the COVID-19 pandemic, along with spending on public health measures.

“Going forward, state leaders should be well-positioned to continue to avoid use of the one-time ARPA monies to plug ongoing shortfalls in the state budget — a move that would create new budget gaps when the funds are exhausted,” the report states.

The report looks not just at the $2.53 billion in ARPA money that Wisconsin received, but also $2.32 billion that went straight to local governments.

The state’s allotment was less than the $3.1 billion Wisconsin originally expected, due to a funding formula that was based on the state’s unemployment rate. As more Wisconsin residents either got back to work or left the labor force entirely, reducing the state’s jobless numbers, the state’s total ARPA share was reduced. 

The ARPA money that went straight to Wisconsin’s local governments was 7.8% of their 2019 general expenditures. The funds were awarded either based on population or by a formula that also included poverty, overcrowded housing and the age of housing, according to the Wisconsin Policy Forum.

Wisconsin ranked 28th among the states proportionally in what local governments got — about in the middle. 

The state’s ARPA share was 9.7% of Wisconsin’s 2019 spending. Wisconsin ranked 44 out of 50 states and was more than 2 points below what the average state got: 12.3% of its 2019 spending. In another study that compared states’ ARPA funds to their population, the Center on Budget and Policy Priorities ranked Wisconsin 47.

“This development fits into a much longer-term trend — for decades Wisconsin has received less in federal aid than most other states,” the Wisconsin Policy Forum report observes. 

In 2019, Wisconsin state and local governments combined federal revenues were $1,878 per person, ranked 39 in the country and nearly 20% below the national average of $2,332 per person. “Since 2006, Wisconsin has generally been in the bottom 10 states on this measure,” the report states

Between the CARES and ARPA funds, Wisconsin has set aside $1.96 billion for public health and direct response to the pandemic, spending or obligating $1.21 billion of that so far. Another $1.33 billion has been set aside for pandemic-related economic aid, including to small businesses, restaurants, farms, hotels and lodging. Additional money has gone to local governments, K-12 schools and child care payments for providers.

About $1.8 billion of the ARPA funds had not been spent at the end of 2021, according to the report, although most of it had been allocated, and more has been spent since January.

While it does not make explicit recommendations, the report identifies possible uses for remaining funds include boosting unemployment insurance reserves, expanding affordable housing or investing in lead pipe replacement or clean water programs.

Wisconsin Examiner is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Wisconsin Examiner maintains editorial independence. Contact Editor Ruth Conniff for questions: [email protected]. Follow Wisconsin Examiner on Facebook and Twitter.

This story first appeared in the Wisconsin Examiner and is being republished with permission through a Creative Commons License. See the original story, here.