Arkansas Democrat-Gazette

Recovery on a fumble

- John Brummett

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 firstcome, 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 onehour 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 lameduck 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 womenowned 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.

John Brummett, whose column appears regularly in the Arkansas Democrat-Gazette, is a member of the Arkansas Writers’ Hall of Fame. Email him at jbrummett@arkansason­ Read his @johnbrumme­tt Twitter feed.

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