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Big COVID bucks are only temporary

Editor’s note: This guest essay was first published in Crain’s New York Business.

The new state budget reflects robust tax revenue growth and an unprecedented infusion of federal money.

Federal aid stabilized state finances, enabling New York to contend with the Covid-19 pandemic’s impacts and preserve key services while providing an opportunity to emerge stronger than before. A recent report from my office found that all states received more money than they sent to Washington, D.C., in taxes in federal fiscal year 2020. It was true even for New York, which has been among the largest net tax-dollar losers.

But the extraordinary federal aid is temporary and should be targeted for programs that alleviate the pains of the pandemic and improve the lives of all New Yorkers.

Developing a clear plan and ensuring the funds are used efficiently, effectively and equitably must be top priorities. Unfortunately, the new budget falls short in providing the transparency and accountability essential to such efforts.

The state continues to rely on broad, lump-sum appropriations for some federal funds, giving the Division of the Budget control over the timing and purpose of billions of dollars. Detailed appropriations would allow for greater visibility into the intended use of the funds, more precise reporting and assurance that the state has a well-thought-out plan for the money.

Federal guidance for American Rescue Plan fiscal recovery funds — totaling $12.7 billion for New York–requires reporting on plans to address inequities, including how projects will benefit communities disproportionately impacted by the pandemic, as well as specifics on expenditures, performance and provisions to ensure outcomes are achieved.

WANTED: SPECIFICS

New York’s initial plan affirmed broad principles, but it didn’t contain specific dollar amounts or detailed information about how goals would be achieved. Other states are doing a better job, enacting stand-alone allocation bills, fostering public engagement and issuing comprehensive plans for the federal aid.

The National Conference of State Legislatures’ state-by-state comparison of ARP state fiscal recovery-fund allocations shows spending descriptions for eligible categories, including access to broadband, economic relief and development, education, housing, water infrastructure and workforce development. New York’s allocation shows only one category: state operation and administration.

No other large state disclosed less on its use of the funds. New York has not demonstrated how it will deploy money to improve equity, measure the success of its efforts or ensure that funding reaches the individuals, families and businesses most hurt by the pandemic.

We must do better.

I’ve released reports on key relief initiatives, including the federal Paycheck Protection Program for small businesses and the Emergency Rental Assistance Program. I’ve also developed a Covid-19 Relief Funds Tracker to provide monthly updates on major initiatives. My office’s ability to shed light on the use of the funds is limited, however. Money has gone out slowly for some programs and has been difficult to track for others. Information on outcomes is minimal, and assessing performance is difficult.

Perhaps a silver lining to the pandemic is that we have an opportunity to create the foundation for a brighter economic future and more equitable outcomes. We must step up our efforts to achieve this. I am committed to doing my part to keep the public and stakeholders informed of our progress.

Thomas DiNapoli is New York state’s comptroller.

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