Republicans warned their spending plan for Wisconsin’s federal COVID stimulus funds may not be allowed

MADISON – Republicans who control the state Legislature are introducing nearly a dozen bills to spend more than $3 billion in federal COVID-19 relief funding before knowing whether their plans are legal, which could cause the state to forfeit some of the federal dollars coming to Wisconsin if the spending is ultimately not allowed.

Democratic Gov. Tony Evers controls the federal funds, but Republican lawmakers are urging him to sign their legislation that spends $3.3 billion — slightly more than what state government officials will receive under federal relief legislation.

Of that, it’s unclear whether about $2.2 billion, including for direct payments to property tax payers, would be legal, according to analyses of the proposals by the nonpartisan Legislative Fiscal Bureau.

If the state spent federal relief money in a way ultimately not allowed under the federal rules, the state could have to repay the money or be shorted on future federal aid, according to a March 23 fiscal bureau memo from director Bob Lang.

Lang said state officials have until 2024 to spend the funds and should ensure the spending plans are allowed before using the money. 

Senate Majority Leader Devin LeMahieu, R-Oostburg, said during a public hearing Wednesday lawmakers are seeking to propose priorities for the spending and believe much of the package will be eligible once federal guidance on spending uses is released by federal officials. 

“We can continue to adjust as the guidance comes out,” LeMahieu said. 

The lawmakers don’t have control over the federal funding but are asking Evers to sign the bills to back their approach. 

“The most important thing is getting this money back to them, because they certainly know how to spend it better than the government,” finance committee co-chairman Rep. Mark Born said in a statement. “Additionally, many of the ideas in this package are clearly allowable under federal law — like funding for broadband expansion. The Governor should work with the legislature on these priorities instead of continuing with his go-it-alone approach.”

Britt Cudaback, spokeswoman for Evers, signaled the governor would veto the bills and criticized lawmakers for crafting bills without knowing how the funding could be spent. 

“It’s no surprise Republicans are too busy playing politics to worry about jeopardizing federal funds that will help our state bounce back from this pandemic,” she tweeted. 

Slightly more than $1 billion in the Republican plans appear to qualify for federal funding, according to the fiscal bureau. 

That part of their plan would provide $500 million for broadband, $200 million for small businesses, $150 million for long-term care facilities, $75 million for tourism, $61 million for lead pipe replacement and environmental efforts, and $50 million for rural economic development.

The fiscal bureau also told legislators this week they may not be able to use the federal funding to pay off $500 million in state debt under what is known right now about the allowable uses but noted full guidance has not yet been released.

They also may not be able to spend $310 million to shore up the state’s unemployment fund, $308.5 million for roads and $68.2 million to upgrade communications equipment and establish a mental health crisis center in northern Wisconsin, according to the fiscal bureau.

Under another part of their plan, Republicans want to provide $1.1 billion in payments to property owners based on how much they have previously paid in property taxes. The fiscal bureau said it was unclear whether the federal government would allow the money to be spent that way. If the payments are considered tax relief, the federal funds can’t be used.

Contact Molly Beck at molly.beck@jrn.com. Follow her on Twitter at @MollyBeck.