Senate Committee on Finance Holds Hearing to Discuss Federal Funding

Senators evaluated the fiscal impact of the COVID-19 pandemic on state agencies, including costs incurred due to federal mandates, the use of 'one-time' federal funding sources and where federal funding will likely be significantly reduced in the future.

July 28, 2022

Legislative News

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The Senate Committee on Finance met July 11 to review the use of federal funding received by the state and to consider recommendations on the expenditure of unappropriated funds. The committee, led by Sen. Joan Huffman (R-Houston), took testimony from the 10 agencies that have received federal COVID-19 relief funds provided under the Coronavirus Aid, Relief and Economic Security Act; the Coronavirus Response and Relief Supplemental Appropriations Act; the American Rescue Plan Act; the Infrastructure Investment and Jobs Act; and similar federal legislation.

The American Rescue Plan Act (ARPA) awarded Texas $15.8 billion in federal COVID-19 relief funds. The Legislature appropriated $12.8 billion in Senate Bill 8 by Sen. Jane Nelson (R-Flower Mound) to cover costs incurred by COVID-19, replace lost revenue, address any negative economic impact and fund certain infrastructure projects. Committee members asked about how these federal funds are being spent and if they will be needed in the future.

Comptroller Glenn Hegar testified about the state's newly released broadband plan and the activities of the state's Broadband Development Office, including its 12 town hall-style forums conducted across the state and the ongoing public survey to gather feedback on the broadband needs of Texas communities.

Hegar reminded the committee that the $75 million they appropriated in SB 8 for pole replacement was not an eligible use under ARPA and requested they reappropriate those funds for broadband expansion.

Hegar said his office is hopeful the state will receive a significant amount of money from the federal Infrastructure Investment and Jobs Act (IIJA) and is monitoring requirements attached to the funding, especially for sub-recipients such as counties. IIJA requires a 25% match from local governments and Hegar stated the state should fund this match requirement.

Sarah Hicks, budget and policy director for the Office of the Governor, provided testimony on federal funds received by the state and where the money has gone. She said the Governor's Office relies on Councils of Government to determine how these federal funds best suit the needs of local governments.

Chief Nim Kidd of the Texas Division of Emergency Management (TDEM) testified about the federal funds spent on emergency services in response to the pandemic and TDEM's coordination with grant sub-recipients such as counties. Huffman asked if TDEM has tracked how local governments have spent their relief funds. Kidd said while TDEM has a really good relationship and partnership with counties, it has no way to see how these funds are spent without looking at individual county budgets or attending county commissioners court meetings.

Donna Sheppard, chief financial officer for the Texas Department of State Health Services (DSHS), testified about the federal funds that have been spent on mental health services. Sen. Royce West (D-Dallas) asked if there is a system in place to track funds going to counties for mental health services. Sheppard said the funds go through each local health department and for the rural areas that don't have one, DSHS serves as the local health department.

Marc Williams, executive director of the Texas Department of Transportation (TxDOT), testified about IIJA, stating that many grants will go directly to localities, bypassing TxDOT, with the U.S. Department of Transportation administering the funds.

For more information about this article, please contact Megan Molleur or Zelma Smith at (800) 456-5974.