Cash-strapped Kansas City will get a windfall from Biden’s COVID-19 relief bill
After burning through cash reserves last year, Kansas City is set to receive $195 million in federal aid that Mayor Quinton Lucas hailed as a “game-changer” for the financially-pressed city.
Congress gave final passage Wednesday to President Joe Biden’s $1.9 trillion COVID-19 relief bill. It provides a $350 billion windfall for state and local governments nationwide.
The aid comes as Missouri’s largest city faces a $70 million revenue shortfall, created by the pandemic’s decimation of the city’s convention and tourism industry.
Guidelines for spending the money are broader than in previous federal packages. Cities and states will be allowed to use the funds to respond to the economic impact of COVID-19 in addition to public health uses.
“We know there are limits to where this money can go, but we also know that this addresses what is going to be a crisis in our local government response, not just to COVID-19 but also to how we fund the basic city services Kansas Citians expect,” Lucas told reporters on a Zoom call after Congress sent the bill to Biden’s desk.
Biden will sign the bill Friday.
In addition to the direct aid to the city, the four counties that the city spans will also receive aid.
Jackson County: $136 million
Clay County: $48 million
Platte County: $21 million
Cass County: $20 million
Absent from this bill is the 500,000 population threshold for direct aid which forced Kansas City to get its last year money from the counties — and proved to be a political headache.
“We were not able to spend money to the extent we needed to address the crisis and you saw us go deeply into reserves, probably more than any jurisdiction around here,” Lucas said, noting the lack of federal aid last year forced the city to spend down $50 million in its cash reserves.
Jackson and Clay Counties eventually shared a portion of their funds from last year’s package after prolonged negotiations, but it has yet to receive any money from Platte County.
This time the aid to cities and counties will be calculated under the same formula used by the federal Community Development Block Grant program, which factors total population and poverty rate.
“We’re glad that Congress saw fit to allow money to go directly to the cities because it’s going to allow us to directly help people. All those things that you’ve all been reporting on— how do we take care of our unhoused and homeless population? How do we pay for our frontline workers?” Lucas said.
“This is why these resources are so important. I wish we could’ve gotten them earlier.”
Missouri Democratic Rep. Emanuel Cleaver, a former Kansas City mayor, touted the changes to the aid formula that ensured direct aid for the region’s cities after last year’s road blocks.
“One of my priorities as we began to craft this proposal was to guarantee cities with populations under 500,000 would receive direct funding, and I’m thrilled we were able to make that much-needed change from previous relief packages.”
Cities on both sides of the Kansas City metro will get millions in aid. Independence, Overland Park and Olathe will all receive about $20 million.
Sean Reilly, spokesman for the city of Overland Park, refused to discuss uses for the money either in broad or specific terms.
“Whatever money the city does receive will be used for one-time expenses. Until we have the final requirements for how to spend the money, we don’t know any specifics,” he said. “We’ll wait until the bill is signed.”
Overland Park drew criticism last fall when it also planned to spend $350,000 in federal aid to purchase cameras for the broadcast of games at Scheels Soccer Complex. After making national headlines, city officials decided to pull the funding, citing a “timing” issue.
Councilman and mayoral candidate Faris Farassati, who was the first to oppose that use of COVID-19 relief funding, said that he continues to push for the city to divert funding toward struggling small businesses and low-income residents.
“We know from a social equity point of view, low and very low-income families have been hit much harder during this pandemic. And we know a lot of those families and minorities have been on the brink of disaster. Therefore, these dollars are best spent covering these areas,” Farassati said. “Other than that, these funds should be used only for legitimate needs that are a direct result of the impact of the pandemic.”
Johnson County will receive $116 million from the bill. The Unified Government of Wyandotte County and Kansas City, Kansas, will receive a total of more than $89 million in combined aid to the city and county.
Kansas Democratic Rep. Sharice Davids said she looks forward to Biden quickly signing the bill, noting that it includes many measures she’s pushed for “including ramping up vaccine and PPE production, putting money directly in the pockets of Kansans, and getting aid to our state and local governments to keep our teachers and firefighters on the payroll.”
There’s another provision with particular implications for Kansas and Democratic Gov. Laura Kelly. Senate Democrats amended the bill on Saturday to stipulate that aid for COVID-19-related revenue losses could not be used for tax cuts.
That’s likely to draw the ire from Republicans in the Kansas Legislature who wanted to use the federal windfall to fund state income tax reductions.
Lucas said Kansas City’s focus would be to use the money to fund COVID-19 vaccination centers and to replenish cash reserves. The bill’s passage, however, won’t immediately prevent proposed cuts to the Kansas City Police Department and other city agencies.
Lucas said the City Council would still move forward with a budget that reflects the city’s current fiscal situation until it receives the federal aid. But he said he’s optimistic that the city will be able to fund a new police recruiting class after it receives the money.
No Republican supported the bill in either the House or Senate. The House passed the Senate’s amended version of the bill Wednesday by a vote of 220 to 211 with all but one Democrat supporting it.
Lucas tore into the region’s Republicans for opposing the bill.
“It is is disappointing, frustrating, hypocritical for people who spent a whole summer lecturing mayors and others on backing the blue, on standing up for our police, to not have supported a bill that pays for policing, that pays for firefighter services, that pays for paramedics, that pays for a response to COVID-19,” said Lucas, who is considering a run for U.S. Senate in 2022.
State aid provisions proved to be one of the most contentious provisions in the bill.
Several states saw huge drops in revenue during the pandemic, but in many states the damage was not as severe as initially expected. Republicans slammed the aid as pork.
“It sends money to state governments even when states like Kansas are experiencing revenue growth — meanwhile historically Democratic-led states are seeing this as an opportunity to backfill years of mismanagement and recent extreme shutdown measures,” Kansas Republican Rep. Ron Estes, who represents the Wichita area, said in a statement Wednesday.
“Kansans shouldn’t be responsible for bailing out the failed policies of California’s Gavin Newsom and New York’s Andrew Cuomo.”
Kansas will receive $1.6 billion, while Missouri will receive $2.8 billion.
Kelly and Missouri Gov. Mike Parson, a Republican, both raised questions about the fairness of the bill’s state aid funding formula.
The formula is based on the state’s total share of the unemployed workforce. It means that Nevada, with a higher unemployment rate, will receive slightly more than Missouri despite having roughly half the population.
A Republican amendment to change the formula failed to pass the Senate Saturday.
Despite her previous criticism, Kelly issued a statement in support of the bill’s passage Wednesday. She praised a provision incentivizing states to expand Medicaid, one of her top policy goals.
“This plan isn’t perfect, but it is another critical step toward Kansas’ economic recovery. It provides relief to Kansas families, schools and businesses. It will help us get vaccines into arms quicker. Lastly – it gives us more reasons to expand Medicaid and get 165,000 Kansans access to affordable health care – something we urgently need to do during a global pandemic,” Kelly said in a statement shared by Davids’ office.