New Castle County spends down CARES Act funds by contributing to state programs
New Castle County is sharing more than a third of its federal CARES Act funds with the state for various assistance programs.
The County has agreed to give the state up to $136 million of its more than $320 million in federal coronavirus relief funds.
The money will help pay for county residents’ portion of several assistance programs. The County is contributing up to $67.5 million to the unemployment insurance trust fund, up to $38 million to a state child care subsidy program and up to $20.6 million to the state’s COVID-19 testing program. The County is also contributing several million dollars to the state’s contract tracing program, rental and utility payment assistance, and an emergency loan program for hospitality-related businesses.
New Castle County Executive Matt Meyer says it made sense to support the state programs.
“The provision of childcare is absolutely critical to protecting the most vulnerable, so we want to invest in that,” he said. “We could start a new childcare program, or work through a nonprofit … When you look at the state program, none of what I’m saying makes sense. What makes sense is to invest in the pre-existing state program.”
New Castle County Council approved the cost share Tuesday.
“I always thought we should pay our fair share,” said County Councilman Dave Carter at a committee hearing earlier that day.
The state also announced Thursday an expansion of its small business relief program, paid for in part by New Castle County.
The County’s contribution to the unemployment insurance trust fund does not mean that Delawareans can receive more unemployment.
Unemployment Insurance Division Director Darryl Scott says the state has used some CARES Act funding to reimburse the unemployment insurance trust fund for COVID-related claims. But he says Delaware’s payment of claims was never in jeopardy during the pandemic, since the state took a loan from the U.S. Department of Labor to continue to pay them.
“The value of New Castle County and the State reimbursing the trust fund is employers who fund the trust fund won’t have to be taxed to make up those dollars,” Scott said.
County CFO Michael Smith said at Tuesday’s committee meeting negotiations over the cost share started in June after the state reached out to the County requesting funds.
The cost share helps the county spend down its significant pot of CARES Act funds before the deadline.
“One of the biggest issues we’re running into right now is, there’s been this hope—and it may come, but it may come too late—that the time to expend [CARES Act] money would be extended beyond Dec. 30, 2020” said Smith. “But as it stands right now, we have to continue forward as if that is the deadline to expend some money, and if it cannot be used for a legitimate purpose, then [it’ll] be sent back to the U.S. Dept. of Treasury.”
Smith also said the cost share benefits the county by reducing its administrative burden.
“Transfer to a governmental entity like the state alleviates our reporting requirements, alleviates our compliance requirements,” said Smith. “If [the State] makes a mistake, they in fact are responsible for the mistake. If the U.S. Treasury comes back on us, we’ll go back on the state.”
Meyer says the County has “preliminary” plans that will enable it to spend the rest of its CARES Act money by the December 30 deadline.
“We are watching Washington and we are hopeful that they will extend the deadline,” he said. “And if not, we do have some preliminary plans we’re working on to make sure we are able to expend every dollar in a way that’s beneficial to taxpayers.”