When the federal government goes on a runaway spending spree, as it did during the Covid era of the closing year of the Trump administration and then into the first years of the Biden administration, gobs and gobs of money flow through federal agencies, down to state governments, down to state agencies, sometimes down to county or local governments, and into nonprofits. The lesson of the past few years is that sometimes the money comes in so fast, and in such wildly large amounts, that those institutions can’t spend it fast enough.
Perhaps the paperwork and red tape for distributing the grants is extensive, or there aren’t enough institutions that work on the particular issue in that area. Or it’s just the natural inertia and slow movement that is inherent to government bureaucracy — and, increasingly, nonprofits, educational institutions, and health-care institutions as well. So the money just sits there in the accounts, sometimes for years.
Rhode Island found that it left tens of millions in Covid funds unspent for years: “A new state Senate report says more than $90 million in federal money sent to Rhode Island to fight COVID-19 remains unspent, and the status of hundreds of millions in aid meant for state housing programs is murky.”
California provides assistance to people with autism and other developmental disabilities through a system of nonprofits called regional centers, which are contracted with the California Department of Developmental Services. In the budget year that ended in summer 2022, more than $978 million was left unspent.
New Mexico has “more than $4.5 billion that’s unspent from previous years” across all programs.
In my neck of the woods, Fairfax County, Va., the Board of Supervisors carried over into the new fiscal year “$59.22 million in federal coronavirus state and local recovery funds.” Wait, you guys have nearly $60 million in coronavirus funding left over, years after the pandemic ended? Then why are my property taxes rising so quickly?
Vast sums sit around in government accounts year to year in red states, too. “The Louisiana Department of Insurance is preparing to launch its second year of the fortified roof grant program with at least $10 million leftover in unspent money.”
Tennessee began the year with “a surplus of $717 million in the federal Temporary Assistance for Needy Families (TANF) program.”
Earlier this month, the Cedar Rapids CBS affiliate reported that Iowa “has yet to allocate more than $47 million from its share of national opioid settlement funds, which were intended for prevention and treatment programs.”
As of August, school districts in Mississippi still hadn’t spent more than $422 million allocated to the state under the American Rescue Plan Elementary and Secondary School Emergency Relief fund, which President Biden signed into law in 2021.
You can also find cases of vast sums of unspent funds that precedes the gusher of funding that the pandemic triggered. Perhaps you heard about the hundreds of millions of dollars that the city of Houston never got around to spending for more than half a decade: “More than six years after Hurricane Harvey flooded thousands of homes and killed more than 80 people on the Texas Coast, the city of Houston has yet to allocate $200 million in federal relief funds to victims, according to the state’s General Land Office.”
You often hear conservatives rightly arguing that government, at almost all levels, spends too much, too quickly. But government, at almost all levels, spends too much, too slowly, too.