Federal virus money slow to trickle to local public health


As the novel coronavirus began to spread through Minneapolis this spring, Health Commissioner Gretchen Musicant tore up her budget to find money to combat the crisis. Money for test kits. Money for contact tracers. Money for a service to help communicate with residents in dozens of languages.

While Musicant diverted workers from violence prevention and other core programs, state officials debated how to distribute $1.87 billion Minnesota received in federal aid.

As she waited, the Minnesota Zoo got $6 million in federal money to continue operations, and a debt collection company outside Minneapolis received at least $5 million from the federal Paycheck Protection Program, according to federal data.

It was not until Aug. 5 — months after Congress approved coronavirus aid — that Musicant’s department finally received $1.7 million, the equivalent of $4 per Minneapolis resident.

Since the pandemic began, Congress has set aside trillions to ease the crisis. A joint Kaiser Health News and Associated Press investigation finds that many communities with big outbreaks have spent little of that federal money on local public health departments for work such as testing and contact tracing. Others, like Minnesota, were slow to do so.

For example, the states, territories and 154 large cities and counties that received allotments from the $150 billion Coronavirus Relief Fund reported spending only 25% of it through June 30, according to reports that recipients submitted to the U.S. Treasury Department.

Many localities have deployed more money since that June 30 reporting deadline, and both Republican and Democratic governors say they need more to avoid layoffs and cuts to vital state services. Still, as cases in the U.S. top 5 million and deaths soar past 165,000, Republicans in Congress are pointing to the slow spending to argue against sending more money to state and local governments to help with their pandemic response.

Senate Majority Leader Mitch McConnell said Tuesday that congressional Democrats’ efforts to get more money for states, “aren’t based on math. They aren’t based on the pandemic.”

Negotiations on a new relief bill broke down last week, in part because Democrats and Republicans couldn’t agree on funding for state and local governments.

KHN and the AP requested detailed spending breakdowns from recipients of money from the Coronavirus Relief Fund — created in March as part of the $1.9 trillion CARES Act — and received responses from 23 states and 62 cities and counties. Those entities dedicated 23% of their spending from the fund through June to public health and 7% to public health and safety payroll.

An additional 22% was transferred to local governments, some of which will eventually pass it down to health departments.

The slow aid is due to many reasons, including bureaucracy, politics and understaffing that makes it difficult for departments to navigate the system.

“It does not make sense to me how anyone thinks this is a way to do business,” said E. Oscar Alleyne, chief of programs and services at the National Association of County and City Health Officials.

Congress mandated that the Coronavirus Relief Fund be distributed to state and local governments based on population. Minneapolis, with 430,000 residents, missed the threshold of 500,000 people that would have allowed it to receive money directly.

The state of Minnesota received $1.87 billion, a portion of which was meant to be sent to local communities. Lawmakers initially sent some state money to tide communities over until the federal money came through. The Minneapolis health department got about $430,000 in state money.

When it came time to decide how to use the CARES Act money, however, Minnesota lawmakers were at loggerheads.

Then Minneapolis police killed George Floyd, and the city erupted in protests over racial injustice, making the situation even more challenging.

Finally, Democratic Gov. Tim Walz decided to divvy up the money using a population-based formula developed earlier by Republican and Democratic legislative leaders that did not take into account COVID-19 caseloads or racial disparities.

The state then sent hundreds of millions of dollars to local communities. Still, even after the money got to Minneapolis a month ago, Musicant waited as city leaders decided how to spend it.

A coalition including the National Governors Association has blamed delays in spending on the federal government, saying final guidance on how states could spend the money came late in June. The coalition said state and local governments had moved “expeditiously and responsibly” to use the money.

Some cities received large federal grants, including Louisville, Kentucky, whose health department was given $42 million by April, more than doubling its budget.

But as of mid-July in Missouri, at least 50 local health departments had yet to receive any of the federal money they requested, a state survey found. The money must first flow through local county commissioners, some of whom aren’t keen on sending money to public health agencies that closed businesses down.

Rural Saline County in Missouri received the same funding as counties of similar size, even though the virus hit the area particularly hard, with outbreaks at a meatpacking plant and factory.

It was late July when $250,000 in federal CARES Act money finally reached the 11-person health department – far too late to hire the army of contact tracers who might have slowed the virus in April, said Tara Brewer, Saline’s health department administrator.

Some local health officials say that the laborious process required to qualify for some of the federal aid is also a problem.

Lisa Harrison, public health director for Granville Vance Public Health in rural North Carolina, says it’s tough to watch major hospital systems such as Duke University receive tens of millions of dollars in direct deposits, while her department received only about $122,000 through three grants by the end of July. Her team filled out a 25-page application just to get one of them.

Back in Minneapolis, Musicant said the new money from CARES allowed the department to run free COVID-19 testing Saturday at a church about a mile from the site of Floyd’s killing.

It will take more money to do everything the community needs, she says, but with Congress deadlocked, she’s not sure they’ll get it anytime soon.


Smith is a writer for The Associated Press, and Weber, Recht and Ungar are writers for KHN. AP writers Camille Fassett and Steve Karnowski contributed to this report.

This story is a collaboration between The Associated Press and KHN, which is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation. KHN is not affiliated with Kaiser Permanente.


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