Federal funds requests pass legislative gate
Rescue plan support targets broadband, courts, hospital
legislative panel on Tuesday endorsed the state Department of Commerce’s request to use $93.8 million in federal American Rescue Plan funds for 14 grants for broadband projects.
The Legislative Council’s performance evaluation and expenditure review subcommittee also advanced the Administrative Office of the Court’s request to use $20 million of the federal funds to help finance a new case management system, and the state Department of Finance and Administration’s request to use $6.25 million to assist the Sevier County Medical Center in opening the hospital.
But the panel delayed action on the state Department of Human Service’s request for spending $30.15 million in rescue plan funds to improve substance abuse prevention services across eight regions in Arkansas, and the state Department of Finance and Administration’s request to use a total of $9.9 million to shore up domestic violence prevention funding and help finance the Women & Children First’s new emergency shelter in Little Rock.
A few lawmakers voiced frustrations during Tuesday’s subcommittee meeting with the state’s process of awarding rescue plan funds, with Sen. Jonathan Dismang, R-Searcy, likening the projects to the former state General Improvement Fund projects for particular lawmakers in their districts.
The Legislative Council on Friday will consider the funding requests that the legislative subcommittee recommended Tuesday. On Dec. 1, Arkansas’ American Rescue Steering Committee recommended approval of the requests.
Republican Gov. Asa Hutchinson appointed the steering committee — made up of nine Hutchinson administration officials and six state lawmakers — in May 2021 to recommend the best uses of $1.57 billion in American Rescue Plan state fiscal recovery funds and $158 million in American Rescue Plan capital project funds.
In March 2021, President Joe Biden signed the $1.9
trillion American Rescue Plan Act that’s designed to help the United States recover from the economic and health effects of the covid-19 pandemic.
The U.S. Treasury’s capital projects fund award to Arkansas specifies that it may be only used for broadband projects and related administrative expenses. Arkansas was allocated about $150.2 million for broadband projects with the balance to be used for broadband administrative expenses through 2026, state Department of Commerce Secretary Mike Preston said in a letter to steering committee Chairman Larry Walther.
The legislative panel on Tuesday recommended the Legislative Council authorize the state Department of Commerce to use $93.8 million for broadband grant awards for 14 projects. The 14 projects include two projects each in Montgomery and Pulaski counties and one apiece in Boone, Cleburne, Cross, Faulkner, Franklin, Garland, Jackson, Logan, Searcy and St. Francis counties.
Preston initially said in a letter Thursday to the panel’s co-chairs that the state Department of Commerce plans to award $135.8 million in broadband grants for 20 projects.
But state broadband office director Glen Howie said in a letter Monday to panel co-chairs Dismang and Rep. Michelle Gray, R-Melbourne, that “some questions have arisen concerning six of the proposed project awards” after the transmittal of Preston’s letter.
“To be certain that we have provided the committee with accurate information for the projects in question, we have removed these projects from the recommended project list so that they may be reviewed more closely by the state broadband office,” he said.
Thus, there is a revised list of 14 broadband projects totaling $93.8 million in requested grant funding, Howie said.
“I expect to submit the removed projects once the review is completed, likely in January or whenever the Joint Budget Committee desires to review the request.”
The Arkansas Rural Connect broadband grant program has handed out $396.5 million in grants to 163 projects across the state, Chelsea O’Kelley, a spokesman for the state Department of Commerce’s Arkansas Economic Development Commission, said two weeks ago.
The $20 million in American Rescue Plan funds for the state Administrative Office of the Courts to help fund a new case management system stems from an agreement that the finance department said has been reached with that office to partially fund the development of a new case management system and provide a path forward for the office to manage the courts and increase collections back to previous annual levels.
The Administration of Justice Fund, administered by the finance department, collects fines and fees paid through the courts in Arkansas and disburses them monthly to various entities under state law as money is available, according to the finance department. Collections of these funds have steadily declined from $38.3 million in fiscal 2009 to $22.9 million in fiscal 2021.
The finance department’s request for $6.25 million to assist the Sevier County Medical Center in opening comes after Sevier County has been without an acute care hospital since 2018.
The county’s residents approved a 1% sales tax to support construction and operation of a new hospital, and the new hospital needs additional financial help as it nears opening due to rising costs as a result of the pandemic, according to the finance department. The hospital will serve Sevier County and parts of Little River, Polk and Howard counties.
Without the $6.25 million in federal funds, the Sevier County Medical Center will be in a financial bind and might not be open parts of the hospital by the end of this year, according to Lori House, the medical center’s chief executive officer.
In other action Tuesday, a motion by Rep. Jeff Wardlaw, R-Hermitage, for the legislative panel to consider 12 other requests to use American Rescue Plan funds failed to clear the Senate side of the subcommittee.
The requests included projects at Arkansas Tech University, the University of Arkansas at Monticello, University of Arkansas at Pine Bluff, Northwest Technical Institute, Philander Smith College, Black River Technical College and Southeast Arkansas College.
Dismang said the state formerly distributed state General Improvement Funds for projects for particular lawmakers in their districts.
He said he’s asked, begged and pleaded to understand how state officials prioritize uses of American Rescue Plan funds, and he worries the state is opening the door for projects for favored lawmakers in their districts.
Sen. Missy Irvin, R-Mountain View, said, “I am disgusted by this process.”
The state moved away from General Improvement Fund projects, she said.
Afterward, Hutchinson said Tuesday in a written statement, “I share Senator Dismang’s concern since the legislature should not be approving specific local projects.
“The preferred practice is to create a grant program in which the appropriate agency has a competitive process,” the governor said. “The grant programs for infrastructure and broadband has worked well and should serve as a model for ARPA funding. It is risky for the legislature to require its approval on specific projects.”