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The Missouri House of Representatives on Wednesday approved setting aside $33 million in funds expected from the federal government to fight coronavirus over pleas from Democrats to give the governor more spending authority.
Originally scheduled to debate the full budget for fiscal year 2021 on Wednesday, the House pulled back on that plan Tuesday night after Cole and Boone counties reported their first positive tests of COVID-19.
Instead, it focused on a supplement to the 2020 budget, including giving Gov. Mike Parson the authority to spend up to $33 million in federal funds the state expects from relief packages currently being planned in Washington, D.C.
The House approved the supplement with a vote of 147-3 after voting down three amendments from Democratic lawmakers that would have set more money aside for the response. It also extended a tax on health care providers for another year, an annual measure to make sure the state doesn't miss out on $1 billion in revenue.
The Senate will still have to approve each of the measures. It has been out of session this week over coronavirus fears, and Senate leaders said they would return March 30 after their regularly scheduled break next week.
House Budget Chair Cody Smith, R-Carthage, said $33 million is based on what the administration expects will be coming as Congress considers major federal relief packages including funding for supplies to bolster the hospitals, and assistance for the potential economic consequences of COVID-19. That's on top of $7 million in state emergency funds Parson can use during his declared state of emergency.
House Democrats argued the governor should have more spending authority in case Congress sends more than $33 million to Missouri. Smith argued the Senate could add more authority when it takes up the supplemental budget and the House could approve it in a conference committee. Otherwise, the House and Senate could come back into session to add more authority, Smith said.
It's possible the Legislature wouldn't be able to come back into session to do that, state Rep. Peter Merideth, D-St. Louis, said. Smith said his goal was to pass something that would easily pass the Senate and be signed quickly by the governor. Meredith argued they should pass something that will have enough spending authority if the federal government approves more funding.
"Do we want to have to come back to this building, in tight quarters with a group of 163 people, when we're telling everybody else they're supposed to stay home, in order to pass it again, in order to then send it to the Senate again, in order to then go through this whole process again?" Meredith asked. "Or do we appropriate the authority now, very simply, and if it doesn't have to be spent, it doesn't have to be spent?"
In addition to planning for more federal money coming in, Democrats looked to set aside federal reimbursement funds for social programs to spend on responses to the coronavirus.
State Rep. Deb Lavender, D-Kirkwood, proposed pulling $20 million from what she said were excess funds budgeted for the Temporary Assistance for Needy Families program to be set aside for local health departments, which she said would be the front lines dealing with the virus in Missouri. Lavender also proposed setting aside $10 million from that fund for paid leave to state employees infected with the virus to ensure they can stay home when they're sick.
Smith and Budget Committee Co-Chair David Wood, R-Versailles, said it was questionable that the state could use those funds for health departments and that it could jeopardize the program's funding next year. Merideth insisted the money could be used and that the budget committee planned to put money from the same funds into the state's emergency cash fund in the 2021 budget.
State Rep. Jon Carpenter, D-Kansas City, proposed setting aside $78 million from four similar funds, including the TANF fund, which could be used on Missouri's health care infrastructure, including mobile testing centers, expanding intensive care units and purchasing additional equipment.
"The worst-case scenario, I guess, is that our governor misspends it, spends it poorly. I guess that's the gamble we're taking if we give him that authority today," Carpenter said.
The other side of that gamble is that the governor and health experts realize in a few weeks that they need more money, then they have to wait for the Legislature to come back and give them the authority to spend it, he said.
Smith said the $33 million is already going toward purchasing tests and protective equipment for health care workers. That only uses federal funds the state expects to receive and doesn't put the budget or essential government functions in jeopardy, he said.
The House voted down those amendments and ended debate before Democrats could bring up more amendments, including setting aside funds for mobile testing, community health centers and absentee ballots or a special election in the case Missouri's elections are disrupted. Parson announced Thursday that the April municipal elections will be postponed until June.
Minority Floor Leader Crystal Quade, D-Springfield, said the Democratic amendments were based on actions other states were already taking. Lawmakers don't know what will happen in the coming days, and they need to take action instead of passing responsibility to the federal and local governments, she said.
"Missouri is always the last to do things," Quade said. "This is not the time to wait."
Smith said the $33 million in expected federal money the House is giving the governor the authority to spend isn't nothing. Combined with the $7 million already available, the state would have the authority to spend $40 million on a response through the end of the fiscal year in June, and it could come back to give more authority, he said.
Speaker of the House Elijah Haahr, R-Springfield, said it's unlikely the House will return to session the first week after the scheduled spring break, but that it will come back into session and members will have 48 hours notice.
The House also agreed to extend the state's tax on health care providers, which is expected to generate $1.1 billion in direct revenue to the state, allowing it to pull in an additional $2.2 billion in federal matching funds. The Senate will still need to approve the bill before the tax is extended another year.
Smith, who sponsored the bill, said it's the single most important piece of legislation to the budget. The bill allows the state and Medicaid providers to take full advantage of the federal Medicaid cost sharing program and has a $1 billion impact on the state's budget, Smith said.
The Legislature has been renewing the tax on an annual basis, and it's currently set to expire Sept. 30. Smith's bill would extend the tax another year, to Sept. 30, 2021. State Rep. Kip Kendrick, D-Columbia, also urged the House to pass the bill.
"This is one of the most important pieces that we can get done today, that we have to get done today in order to ensure the drawdown of federal money," Kendrick said.
Health care providers, including hospitals, pharmacies and nursing facilities, all pay the provider tax to the state, which lets it draw down federal matching funds. The state keeps some of those matching funds and uses them as a major source of funding for the state's Medicaid program, MO HealthNet. The state also sends money back to the providers in the form of reimbursements of Medicaid-related expenses.