$64B in coronavirus aid flows to NY, with some strings attached

WASHINGTON — About a week ago, $133 million showed up in the Town of Hempstead’s bank account, deposited by a federal coronavirus aid program for state and local governments, and Town Supervisor Donald Clavin wasn’t sure how to spend it.

He wasn’t alone. New York state is still working out how to use its $5.2 billion from that fund, New York City is working on plans for its $1.5 billion, Nassau County is weighing what to do with its $103 million and Suffolk County won’t even talk about its $257 million.

It’s not that those officials don’t need or want the money, it’s just that they are not sure what the U.S. Treasury Department will allow them to spend it on under its rule that it must be used in connection with the COVID-19 pandemic.

“At the end of the day, if we make an expenditure and it's not approved, well, that means the Town of Hempstead is going to be on the hook for that money,” Clavin said.

Uncertainty about the strings attached and the method and timing of the federal government’s distribution pervades much of the $2.5 trillion in the four coronavirus relief and rescue packages enacted in the past two months.

The federal government has awarded about $64 billion in coronavirus aid to New York, an amount that could nearly double over time and with the potential passage of another $1 trillion-plus relief package, according to a review of federal records and accounts by the White House accounting and Sen. Chuck Schumer (D-N.Y.).

Long Island governments, hospitals and health providers, and schools and colleges have been awarded about $1 billion, including $493 million in cash that already has been wired to the bank accounts of Nassau and Suffolk counties and Hempstead Town.

“Long Island and New York as the epicenter had massive needs, and so we’ve really had to look at so many different areas where people needed help,” said Schumer, the Senate Democratic leader and a key player in negotiating the four coronavirus relief bills.

“There will be $112 billion when all the money is allocated,” Schumer said in a phone interview. “A lot of money has gone to New York and more will come.”

But New York still trails California and Texas in the amount of money it gets from the biggest aid funds so far: the $1,200 cash stimulus checks, the Paycheck Protection Program, $52 billion for hospitals and health care providers, and higher education grants.

That’s largely because federal officials say that to speed delivery of funds they used existing formulas based on population or other metrics rather than COVID-19 cases to determine who gets what, to the detriment of New York, which has the largest coronavirus burden.

But the Trump administration said it also provided millions of surgical and procedural masks, eye and face shields, isolation and surgical gowns, surgical and exam gloves and ventilators. It also said it helped set up temporary hospitals and sent the USNS Comfort naval hospital ship. But it placed no dollar value on this assistance — making it impossible to add to the state's total aid.

Gov. Andrew M. Cuomo complains New York state did not get enough money. The Long Island delegation attacked the way some of the administration’s funding formulas shortchange New York. 

Schumer touts the funding he won for New York but also acknowledges New York needs much more money as he criticizes the Trump administration for how it has handled the aid.

 “One of our big problems is we can pass good laws,” Schumer said, “but if the administration doesn’t implement them, that’s not going to help.”

Small business loans abound

The biggest flow of money into New York so far has been the $20.3 billion in loans to 81,000 companies in the state under the small business Paycheck Protection Program, which offers forgivable loans to small businesses that retain their employees, the Newsday analysis found.

Small businesses also snapped up cash advances and low-interest loans from the SBA’s $10 billion economic injury disaster loan program — about 51,400 New York companies won $211 million in advances and 1,100 New York firms took out $242 million in loans.

Thirty-two publicly traded companies, including 11 on Long Island, won $110 million worth of those small business loans, the Washington Post reported. Four of the companies returned the money after being criticized.

Meanwhile, Jet Blue, based in Long Island City, won a $658 million grant to cover payroll and took out a $250 million loan from the CARES Act $28 billion airline fund.

Many of the smallest businesses felt excluded, but the interim $484 billion bill passed in mid-April added $310 billion to the Paycheck Protection Program and $60 billion for economic injury disaster loans.

Providing for health care

New York hospitals and health care providers are in line for about $16.5 billion in direct payments to health care providers, grant programs and temporary savings for hospitals.

The U.S. Department of Health and Human Services boosted New York’s share by awarding 90 New York hospitals with a high number of COVID-19 and low-income and uninsured patients with $5 billion.

It previously had split $1.86 billion among 26,282 New York health care providers in the first tranche of $30 billion from its $100 billion CARES Act money. It has added a second tranche of $20 billion whose awards are still pending.

Hospitals will see temporary savings of about $7.7 billion from formula changes in Medicare and Medicaid funding, according to the Healthcare Association of New York, which represents hospitals.

Meanwhile, the interim spending package includes another $75 billion for health care providers that has yet to be divvied up.

State and local governments

About $16 billion of federal coronavirus aid goes through state and local governments.

Nearly that amount is the $7.5 billion from the CARES Act's state and local government fund, which has a catch — the money must be used for COVID-19-related expenses, not for shortfalls in revenues because of the shutdown.

During negotiations over the interim spending bill, Schumer said, the president and Treasury Secretary Steven Mnuchin promised to ease that restriction, but they haven’t yet. Last week Schumer said it will be in the next bill and “it'll be retroactive for all the COVID money.”

New York’s state government so far has gotten $5.2 billion in direct funds, $1.1 billion to pass-through funding for school districts, $1.45 billion in Medicaid savings and $1.36 billion in FEMA disaster funds, for which the state is seeking a waiver of its 25% share.

About $296 million in community development grants have been awarded to counties, towns and cities — including $18.8 million on Long Island.

After hearing Schumer announce that Nassau County would get $235 million in state and local government funds, County Executive Laura Curran said she learned of a “strange anomaly” — Hempstead Town, because of its large population, would be getting “a nice chunk of change.”

To Curran's surprise, of that $235 million, Hempstead will get $133 million and Nassau $102 million. Clavin, Hempstead Town’s supervisor, said his comptroller just applied for the money and didn’t ask for that amount.

Curran and Clavin said they each are assembling committees to decide how to use the money. “I’ve been speaking with the supervisor and my goal is to make sure that all of the money is spent regionally are spent in Nassau County for COVID-related expenses,” Curran said.

In the meantime, Clavin said his comptroller told him she was putting that $133 million, which amounts to about a quarter of the town’s budget, into an interest-bearing account.

“Then she reached out saying, ‘Am I allowed to?’” Clavin said. “And we couldn’t even get an answer.”