Recovery on a fumble

Right on cue, the Hutchinson administration botched a $15 million rollout of federally provided CARES Act money last week.

First the federal government printed the money, then state government fumbled it. The blunder fed cynicism that government cannot do anything well and will always favor the politically connected.

I do not believe that insiders were specially lavished on purpose. I lean to incompetence over corruption. But the episode clearly dented the confidence frequently expressed in this space that the Hutchinson governorship runs state government well.

That was not remotely the case here.

State government was given $1.25 billion in the CARES Act to relieve economic effects of the coronavirus. The installment last week was a relatively small and utterly reasonable opening allotment to help companies with costs associated with reopening while complying with new state health guidelines.

Gov. Asa Hutchinson announced the $15 million pot of money at his daily briefing Wednesday. His CARES steering committee, dominated by his administrative officials, met on the matter that afternoon. The program was supposed to be signed off on by the Legislative Council before taking effect.

But the website to apply for the money went online at 5 p.m. that very day, before legislative action. The state Commerce Department already had notified at least some trade associations and local chambers of commerce that the money would be imminently available.

The $15 million was depleted — by applications, not yet by actual disbursements — within an hour. The requests had been treated on a first-come, first-serve basis.

Legislators were appropriately irked. Businesses deserving help from the fund were disappointed to find the fund apparently depleted before they could apply. They turned angry when it came out that applications had been made by businesses receiving early notice.

Hutchinson admitted his administration’s failing the next day, at least regarding his Commerce Department’s activation of the application site prematurely and without legislative approval.

He defended notifying trade associations and business advocacy groups. Indeed, that was not in itself inappropriate. Under the circumstance, though, with only an imminent one-hour window of opportunity in which some people effectively got a heads-up, it suggested — perhaps revealed — favoritism toward people with lobbyists or otherwise in the know.

The Hutchinson administration’s immediate response? It was to throw another $85 million in CARES money at the program.

The administration also proposed to oblige legislative concerns by setting aside portions for smaller businesses and minorityowned and women-owned ones.

The state House of Representatives seemed supportive of the quick fix, but the state Senate was resistant.

There was early speculation that the Senate’s pushback was related to recent election of a president pro tempore for the next session who was not backed by Hutchinson. But it turns out the Senate resistance was practically unanimous and joined by the lame-duck pro tempore, Jim Hendren, the governor’s nephew.

“Poorly thought out, and even more poorly executed,” Hendren told me of the $15 million debacle. He said administrative officials were “certainly not aware of how taken advantage they would be by those with inside knowledge who know the game — and how hard it would be for the real people who are in so need of the help to compete with that.”

Sen. Missy Irvin of Mountain View, a Senate appointee to the CARES steering committee, said she was reflecting a prevailing Senate view when she expressed concern that the state was spending money at the outset “like a cash register” without a strategic plan for unknowns that might come later.

She supported a motion by Sen. Will Bond, also on the steering committee, to add only $35 million in a first supplement, that representing the amount of applications coming in after the $15 million was used up.

The governor-dominated steering committee rejected that. House Speaker Matthew Shepherd, a consummately moderate fellow, told me over the weekend that the House seemed generally to concur with the governor that the additional $85 million was needed and that limiting relief to an additional $35 million already known to be sought would invite a second round of resentment and accusation.

Shepherd said the new set-asides for small businesses and minorityowned and women-owned ones, sought by House members, would effectively require the extended application period and pro rata award system that senators were seeking.

Late Sunday evening, parties reached a compromise. The additional outlay would be far less than $85 million and only a little more than $35 million. It would be $40 million. The set-asides for the smallest businesses, minorities and women would apply. A two-day application period with notice will be required.

So the Hutchinson administration has been chastened away from autocratic tendencies. The rest of the federal manna has been newly and appropriately subjected to transparency and accountability. Raging cynicism about government has been nourished regrettably.

And the Legislature, clearly on the Senate end, has reared up as if a revived equal branch.