The American Rescue Plan Bailed Out Unprofitable Government-Owned Golf Courses

“An unnecessary federal bailout of state and local governments has given an undeserved mulligan to some money-losing government-owned golf courses.

That’s despite the fact that some of those same courses reported an increase in customers during the COVID-19 pandemic. According to reports submitted to the Treasury Department and reviewed by Reason, Union County, New Jersey, has committed $929,000 of its federal COVID funds to a pair of county-owned golf courses: Galloping Hill and Ash Brook. That spending will help the courses cover “costs associated with increased use” as a result of “an increase in play at county golf courses due to the COVID-19 pandemic.”

That’s the sort of problem that many private businesses would probably love to have. Either as the result of government-imposed lockdowns or changes in consumer behavior during the pandemic, recreational spending on restaurants, bars, concert venues, and theaters plummeted. If that made golfing—an outdoor, socially distanced activity—more popular, why should taxpayers now have to bail out a business that got more successful?”

“In a report published earlier this year, the Reason Foundation (the nonprofit that publishes this website) found that 155 local governments lost a combined $61 million by running golf courses during their 2020 fiscal years. One of the biggest losers was Thousand Oaks, California, which lost a staggering $800,023 on a single city-owned golf course in 2020.

Naturally, that course got a piece of the federal bailout too. The Treasury Department’s tracker of American Rescue Plan spending shows that Thousand Oaks plans to spend more than $14 million on “revenue replacement” on a variety of items, including “city-owned theatres and golf course.” It’s not clear from the data provided to the Treasury Department how much of that money will be spent on the golf course (nor is it clear why the city owns multiple theaters, but that’s for another day).”

“”Congress really put taxpayers in the rough,” says Tom Schatz, president of Citizens Against Government Waste, a fiscally conservative nonprofit. He says Congress should have placed stricter limits on how the $350 billion state and local government bailout could be used.

Those funds were included in the $1.9 trillion American Rescue Plan, passed by Congress in March 2021, and were ostensibly meant to cover pandemic-related public health costs or to offset lost tax revenue due to the economic consequences of COVID-19. Even before the law was passed, there were questions about whether such a large bailout of state and local tax coffers was necessary or prudent.

It seems to have been neither, as most governments did not experience a significant revenue shortfall due to the pandemic. Now flush with extra cash from Washington and few restrictions on how to use it, some state and local governments are blowing the money on pet projects like government-owned golf courses and bonuses for government workers”

“Other obviously vital public health costs being covered by the American Rescue Plan’s local government bailout fund include the planting of new trees “including ash, spruce, maple, pine, [and] cherry” and the installation of a new irrigation system at a government-owned golf course in Elmira, New York, according to Treasury Department data. That’ll burn through $1.2 million of federal funds.

In Lexington, Kentucky, a government-owned course that brags about containing “the longest par-5” hole in the state, will be getting a new irrigation system with the help of more than $1.3 million from the federal bailout. The course is already “a local favorite and an attraction to visitors,” the county wrote in its project summary submitted to the Treasury Department, but the desired upgrades haven’t been made due to a lack of funding from the local government.”

Were The Stimulus Checks A Mistake?

“According to the U.S. Census Bureau’s supplemental poverty measure, the stimulus payments moved 11.7 million people out of poverty in 2020 — a drop in the poverty rate from 11.8 to 9.1 percent. And the 2021 poverty rate was estimated to fall even further to 7.7 percent, per a July 2021 report from the Urban Institute. We don’t know yet whether this came to fruition, but Laura Wheaton, a senior fellow at the Urban Institute and one of the analysts behind the 2021 numbers, told us that it was clear from their analysis that the stimulus checks were driving a dramatic decline in poverty.

More broadly, the stimulus checks also cushioned workers during one of the worst economic crises in modern history, which likely helped the economy bounce back in record time. In April 2020, when Americans were receiving the first round of checks — up to $1,200 with the CARES Act — the unemployment rate was at a disastrous 14.7 percent. But two years later, it’s almost returned to its pre-pandemic levels, with many job openings. “I hope we don’t forget how awesome it was that we supported people so well, and that we recovered as quickly as we did,” said Tara Sinclair, a professor of economics at George Washington University.

However, there is also evidence that the stimulus, especially the last round, likely stoked higher and higher prices for the very people it was intended to help. Though global supply chain issues (and, more recently, the war in Ukraine) have been significant drivers of inflation, the divergence between U.S. and European inflation suggests there’s more to it than that. In fact, a recent analysis from researchers at the Federal Reserve Bank of San Francisco found that the stimulus may have raised U.S. inflation by about 3 percentage points by the end of 2021.”

States Are Flush With Cash

“As state legislators kicked off their 2022 sessions this spring and started planning new budgets, many found that their tax coffers were overflowing. What lawmakers do with that extra money could have long-range consequences.
The excess revenue resulted from a convergence of two windfalls. State tax collections rose sharply in 2021 as the pandemic waned, businesses fully reopened, and consumers started spending again. And the federal government showered states with more than $360 billion as part of the $1.9 trillion American Rescue Plan, passed in March 2021. The passage of President Joe Biden’s $1 trillion infrastructure bill means even more federal taxpayer money for state treasuries in the near future.

All told, state revenues (including federal funds) increased by more than 12 percent in 2021, according to data from the Pew Charitable Trusts. Thirty-two states reported higher than expected revenue in 2021, according to the National Association of State Budget Officers.

As a result, many states now have significant year-over-year budget surpluses for the current year. California leads the way with a $31 billion surplus—an amount larger than many states’ entire annual budgets. Florida ($11.2 billion surplus), Maryland ($4.6 billion), Minnesota ($7.7 billion), and Virginia ($2.6 billion) also have large cash reserves. But state lawmakers should be careful about letting the extra dough burn a hole in their pockets.

“It’s understandable that there is all this pent-up demand for different kinds of new programs or tax cuts,” says Josh Goodman, a senior officer with Pew’s state fiscal health initiative. The impulse to use surpluses for pet projects, Goodman says, ignores data that suggest many states are running long-term structural deficits—largely due to pension obligations and health care costs in programs like Medicaid. “The question is not just what’s the budget situation this year,” Goodman says, “but what is the budget -situation going to be five or 10 years down the road.””

Prisons, Water Infrastructure And Broadband: Where States Are Spending Their Pandemic Relief Funding

“combined with previous coronavirus response bills and spending packages, the federal government has now spent almost $5 trillion addressing the pandemic”

“It’s not clear yet where all this money will go — states have an enormous amount of leeway as to how they’ll spend it and until 2026 to do so. (In total, $155 billion went out to states in 2021, with the rest due to be distributed later this year.) Most states have used the windfall of cash to address the budget problems caused by the economic downturn following the pandemic and to address the inequities thrown into sharp relief during the past two years. But while there are broad commonalities in how states have spent the money, it’s also true that how relief from the pandemic is defined varies widely — not necessarily across partisan lines but in ways that are still shaped by local conditions and ideology.”

“Almost every state that has allocated money so far has spent some on broadband, water and sewer infrastructure”

“Infrastructure has also been a big priority for states like Florida, which is spending money on highways and other transportation projects that had been long-planned but unfinished. Lazere said some of the need for infrastructure goes all the way back to the Great Recession, which began in 2007, and the long, slow recovery that followed. “These were areas of need that had not been addressed, [for which] there hadn’t been a dedicated state or federal funding source, so the rescue plan gave them the opportunity to tackle these problems that had been around for a long time,” he said.
Additionally, because the funds are a large, one-time payment, with no expectation that they’ll continue into the future, it encourages spending on infrastructure.

“It really starts with states doing that analysis, to be able to know what’s affordable over the long-term and what’s not,” said Josh Goodman, who is part of The Pew Charitable Trusts’s state fiscal health project.”

“In Alabama, $400 million will be used for building two new prisons.”

“the state has been under a court order to improve mental health care in its prisons since 2017, and advocates of the new law say using the recovery funds to build a new prison will address those problems, as well as overcrowding and inadequate staffing. They also say the new facilities will improve the overall health care and mental health care available to incarcerated individuals.”

“In more liberal states and localities, lawmakers are pursuing new financial assistance programs for local families. One idea that has picked up steam is funding guaranteed income pilot programs, with eligible residents receiving between $500 and $1,000 in cash assistance monthly. Support for these programs has been growing across the ideological spectrum, especially in the last few years.”

School Districts Are Using Their COVID-19 Relief Money on Vape Detectors, Tennis Courts

“Earlier this year, schools around the country received more than a hundred billion dollars from the federal government—American taxpayers, in truth—in order to recover from the pandemic and finally get back to the task of teaching kids.
The feds stipulated that 20 percent of that money be put toward addressing learning losses during the pandemic, but the bulk of it can be spent at schools’ discretion. Which means, of course, that many schools are using this sudden injection of cash to make improvements that have nothing to do with keeping COVID-19 at bay.

“Some districts are investing big money in initiatives that don’t appear at first glance strictly COVID-related,” notes Education Week. “Miami-Dade schools plan to spend $30 million, or $86 per student, on cybersecurity. Raleigh County schools in West Virginia lists a $9 million effort—more than $800 per student—to expand an elementary school, adding nine classrooms, upgrading the library, expanding the kitchen, and separating the cafeteria and the gym. The Newport News school district in Virginia is spending $840,000 for a new student information system to help teachers catalog students’ academic progress.”

An unnamed school district will use some of its COVID-19 relief funds to install vape detection devices, purchase new student ID cards, and build a tennis court.

Indeed, many districts seem to be spending significant chunks of money on upgrading athletic facilities and expanding stadiums, according to Education Week. Athletics can be an important part of many students’ lives, and letting kids get back to sports was a good reason (among many) to move away from the soul-crushing farce of virtual learning and get everybody back in school. But a slightly nicer football field probably isn’t going to improve students’ test scores or make them safer from COVID-19, which after all are the two primary justifications for all the spending.”

What Did Public Schools Do With COVID Relief Money? Whatever They Wanted.

“The federal government sent around $190 billion in aid to public schools across the nation during the COVID-19 pandemic. That is a lot of money by any standards, but in terms of federal spending on primary education, it is a shockingly large amount: as Reason’s Matt Welch explained when surveying the Biden administration’s weak moves toward promoting public school reopening back in February, that’s more than four times as much as the federal government tended to push toward K-12 education a year in pre-COVID times.

Is the money being diligently used for its intended purpose? Of course not. A survey by ProPublica found, when examining some of the “provisional annual reports…by state education agencies” for about $3 billion worth of the aid from March to September of 2020, that “just over half of the $3 billion in aid was categorized as ‘other,’ providing no insight into how the funds were allocated.”

Over the last school year, 15 states constituting around a quarter of the total U.S. population didn’t even manage to achieve 50 percent effective in-person education, the alleged purpose of all that federal COVID money.”

“”The law places few restrictions on how districts can spend the federal aid, as long as the investments are loosely connected to the effects of the pandemic,” ProPublica explains, while noting that various districts, as reported by the Associated Press, are diverting the cash to athletics. The schools are supposed to spend all the money by 2024. The Associated Press reports that although schools “are required to tell states how they’re spending the money…some schools are using local funding for sports projects and then replacing it with the federal relief—a maneuver that skirts reporting requirements.””

Could Covid-19 finally end hunger in America?

“A peculiar thing happened last year during the Covid-19 pandemic: As large swaths of the U.S. economy shut down and unemployment skyrocketed, hunger rates held steady and poverty rates went down.

From the pandemic’s earliest days, Washington showed it had learned the lessons of past crises like the 2008 financial collapse, when policymakers responded with too little too late to help people get by and the economic recovery was hampered as a result. So as the country faced a once-in-a-century pandemic and the sharpest economic downturn since the Great Depression, Congress threw trillions at the double disaster, sending unprecedented levels of aid to American families and businesses.

Soon, a pattern was evident, thanks in part to real-time monitoring by the U.S. Census Bureau: When Washington doled out federal aid, hardship declined. When Washington let aid expire, hardship ticked back up.

In essence, the pandemic triggered a country-wide policy experiment aimed at keeping families fed and financially afloat. There have been big increases in food stamps and unemployment benefits. Three rounds of stimulus checks. Universal free meals at schools and new grocery benefits for kids who are learning virtually, or out of school during the summer. Hundreds of millions of food boxes flooded into churches and other nonprofits.

The latest tranche of aid may carry the biggest bang yet: six monthly child tax credit payments that will be dispersed through the end of the year. The first two rounds of payments that went out in July and August fueled a dramatic reduction in the rate of American households with kids who report sometimes or often not having enough to eat in the past week, according to the Census Bureau.

All that aid appears to have worked.

“Lo and behold, if you give people money, they are less poor,” said Elaine Waxman, an economist and senior fellow at the Urban Institute who has closely monitored how low-income households have fared throughout the crisis.”

“the U.S. has long been seen as an outlier for its comparatively limited safety net, and is sometimes referred to as “the reluctant welfare state.” Other wealthy countries, like Canada and the United Kingdom, have more generous unemployment programs and provide allowances to help with the costs of raising children, on top of providing health care and other benefits that are broadly available, even to middle-income households.

By contrast, in the United States, there has been a much greater focus on ensuring aid goes primarily to low-income households that have met strict eligibility and income requirements. America’s two biggest safety net programs, Medicaid and the Supplemental Nutrition Assistance Program, or SNAP, (still known to many as “food stamps”), have fairly low income caps and are squarely aimed at providing in-kind benefits like medical coverage and food — not giving people money to spend how they see fit.”

The Cuomo Pandemic Scandal No One Is Talking About

“The last two COVID relief bills passed by Congress in December 2020 and March 2021 collectively appropriated $46 billion to cover the massive amount of unpaid rent that tenants have accumulated during the pandemic.

By the end of January 2021, the federal government had released close to $25 billion of that money—including about $1.2 billion to New York state’s ERAP. Subsequent federal grants and state money would fund the program to the tune of $2.7 billion, according to City Limits.

And yet by the end of June, New York had, per U.S. Treasury Department data, managed to spend $0 of its rent relief funds. A month later only $1.2 million had gone out the door.

A major reason for the slow dispersal of funds is that the state’s Office of Temporary and Disability Assistance (OTDA)—which is responsible for administering the program—took until June 2021 to start accepting applications. When it did get an online application portal up and running, tenants and landlords were met with crashing websites, and requests for documents they didn’t have.

Applications would take hours to complete, yet the online web portal lacked a feature allowing people to save their progress and try again later. People who called into a hotline to report problems said that staff often had no answers for them.”

“most state governments have done a pretty poor job of getting their rent relief programs off the ground. (The speed at which places like Virginia and Texas have managed to disperse funds shows that success wasn’t impossible.)

Nevertheless, New York has earned the distinction of being the slowest. As of Monday, the state has spent $100 million on rent relief, or about 4 percent of total ERAP funds.”

The big drop in American poverty during the pandemic, explained

“In March, researchers at Columbia led by Zachary Parolin estimated that as a result of President Joe Biden’s stimulus package, the American Rescue Plan, the US poverty rate would fall to 8.5 percent, the lowest figure on record and well below 2018’s figure of 12.8 percent. This past month, researchers at the Urban Institute, using a slightly different means of measuring poverty, found that 2021 poverty will be around 7.7 percent, almost a halving relative to 2018’s rate of 13.9 percent per their methodology. (Official US Census poverty statistics for 2020 have not yet been released.)

The Columbia authors find that if you compare 2021 to every year for which the census does have data, from 1967 to 2019, and use a consistent poverty line, 2021 is projected to have the lowest poverty rate on record.

Considering that the US endured a pandemic and economic shock in 2020, these numbers are remarkable.”

“If handing out cash led people to work dramatically fewer hours or to quit their jobs, then cash payments wouldn’t cut poverty by as much as they initially seem to.

Luckily, cash doesn’t seem to discourage work to that degree. In 2019, a group of economists and sociologists specializing in child poverty put together a major report for the National Academy of Sciences, and their estimate based on the research literature was that a cash benefit of $3,000 per year for all but the richest children would reduce work effort by about 1.15 hours a week on average — a fairly trivial amount that barely changes the antipoverty impact of such a program.

The effects of stimulus checks to adults, like those pursued in the past year, are surely different, but the evidence generally suggests that work disincentive effects of cash are small. University of Pennsylvania economist Ioana Marinescu, in a wide-ranging review of the effects of cash programs, concluded, “Our fear that people will quit their jobs en masse if provided with cash for free is false and misguided.””

“The US has been sending out a lot of cash during the pandemic. But that’s almost certainly coming to an end. The enhanced child tax credit is a policy many Democrats want to make permanent, or at least (as the Biden administration has proposed) extend for several more years. But the $1,200 and $600 and $1,400 stimulus checks were emergency measures, as were the $300/$600 weekly unemployment supplements.

All that implies that in 2022, when those measures are gone, poverty is likely to shoot back up again, even in a strong economy with robust job growth.”

Why a Debt Relief Program for Farmers Matters for Racial Equity in America

“In March, when Congress passed its $1.9 trillion Covid-19 stimulus package, the legislation included a $4 billion loan forgiveness program targeted at Black and other minority farmers. Based on strong evidence that the U.S. Department of Agriculture had perennially discriminated against certain groups, placing them at much higher risk of foreclosure than white farmers, the program offered a one-time emergency payout to alleviate debt for what it called “socially disadvantaged” farmers.

The policy represented a worthy and long-overdue attempt to redress historic and ongoing discrimination by USDA. But now the program is under legal siege.

Over the past few months, white farmers and ranchers have filed about a dozen lawsuits against USDA, alleging that they were victims of racial discrimination because, unlike several minority groups, white people did not automatically qualify for the emergency debt relief. While the lawsuits have been filed in multiple states, a class action has been certified in a case in Texas, where five farmers sued with backing from Stephen Miller, President Donald Trump’s former adviser. To the chagrin of Black and other minority farmers long awaiting relief, several federal courts have issued temporary injunctions blocking payments while these cases are decided.

Now, the Biden administration must decide whether to soldier on in court to defend the program or seek legislative fixes to inoculate it from legal challenges.”

“In the near term, the results of the white farmers’ lawsuits could have a significant impact on farmers of color across the country. In particular, without relief payments that USDA was supposed to begin distributing this summer, some Black-owned farms inevitably will collapse”