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COVID Aid To Be Used for ‘Inclusive’ Development in West Virginia

CHARLESTON — When West Virginia starts to spend part of the $1.355 billion in COVID-19 relief and infrastructure funds, it will have to consider the needs of underrepresented regions of the state.

The Joint Standing Committee on Finance heard a presentation Monday morning from Ann Urling, deputy chief of staff to Gov. Jim Justice, on parameters the state plans to use for spending its portion of the American Rescue Plan funds.

The $1.9 trillion American Rescue Plan allocated $1.355 billion to West Virginia for coronavirus-related expenditures, water and wastewater infrastructure, and broadband expansion.

West Virginia has received half of the $1.355 billion, more than $677 million, with the remainder coming later. States have until Dec. 31, 2024, to appropriate the ARP funding. Projects must be completed by 2027.

Urling said the state wants to use a data-driven methodology for approving ARP projects, with listening sessions being planned across the state to give the public and stakeholders an opportunity to weigh in on ARP planning. The U.S. Treasury Department issued rules and guidelines for ARP spending, wanting state and local governments to develop strategic priorities for “Inclusive economic development” focused on historically underrepresented regions.

“According to the Treasury guidance, we are to be directing these funds to areas of the state with systemic issues most impacted by the pandemic,” Urling said. “We are being asked to promote inclusive economic development and regions of the state in the planning process, so that historically underrepresented communities are part of and are given a real voice in how these funds are used.”

According to Urling, many public and private programs are requiring spending requests to be weighted in favor of social justice initiatives, such as lifting up minority communities and other disadvantaged communities, or communities negatively affected by climate change or the fossil fuel industry. The White House Environmental Justice Advisory Council is working on an environmental justice formula, while the financial rating firm Moody’s also uses a separate rating formula for social justice projects.

“We need to develop a plan to reduce disparities and ensure that we target those most in need rather than just make an expenditure,” Urling said. “The overall plan needs to measure where we have reduced disparities, engaged, underrepresented populations, and targeted those most in need.”

Acceptable uses for ARP funds include public health expenditures, offsetting negative economic impacts due to pandemic, replacing lost public sector revenue due to pandemic, and providing premium pay for essential workers. Allowable infrastructure expenditures include water and sewer projects and broadband projects.

“The question is how can we get the best possible results and do it in such a way that we don’t get our federal dollars called back because we haven’t spent them appropriately,” Urling told lawmakers.

The state is using a third-party certified public accounting firm and a legal firm to guide officials through the U.S. Treasury Department’s guidance for ARP dollars. The state also wants to create a mapping system to help identify spending needs and document how funds are spent.

“I would say that developing strategic priorities is going to take time, especially where we need to connect the dots to show that we have documentation backed by the data as well as individuals’ testimonials at local levels on where the funding can best be used,” Urling said. “We need to be able to demonstrate that we have developed an objective assessment of needs and can map our funding streams to those needs and priorities.”

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