Gov. Lee: Tennessee expected to see $3.66 billion in aid from federal COVID-19, economic relief measures

Staff Photo by Robin Rudd / Tennessee Gov. Bill Lee held a news briefing at the UTC University Center about the COVID-19 pandemic on April 3, 2020.

NASHVILLE - Tennessee is expected to receive some $3.66 billion in federal funding under the massive congressional responses to the nation's coronavirus pandemic and economic woes, according to Gov. Bill Lee's administration.

But in a number of areas, the state has little say or flexibility in how the money from the federal response is used, with Congress apportioning money in areas such as education under federal formulas.

That was the message Gov. Bill Lee and top staffers delivered Wednesday to members of Lee's recently created Financial Stimulus Accountability Group. The panel is comprised of top administration officials and state lawmakers, including Senate Finance Committee Chairman Bo Watson, R-Hixson.

"This federal funding presents us with an enormous opportunity to utilize these funds to spend on COVID-related impacts that have hit our state," Lee told the panel, saying the state bears a "strong responsibility to be good stewards" and "to make sure every Tennessean benefits."

State Budget Director David Thurman told the panel as it held its first meeting via video conferencing that the federal government earlier this week provided $1 billion directly to the state with another $1.3 billion expected Friday under the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act.

Thurman said in addition to the $2.3 billion, there's also about $1.3 billion more coming to the state. That includes $285.3 million for the state's TennCare Medicaid program for the poor. That money is projected to come into state accounts through a 6.2% increase in the federal government's matching formula for what states spend.

All told, Finance Commissioner Butch Ely and Thurman told the panel, the federal government is making 53 awards to the state that will be administered by 17 state agencies.

But with large sums of money in some areas such as education being apportioned under federal funding formulas, Tennessee Comptroller Justin Wilson, a member of the group, observed "we don't really determine how that money is ramping up."

Meanwhile, Tennessee hospitals are expected to share part of the $100 billion the CARES Act is providing to the health care industry nationwide. It was not immediately clear how much that is.

In response to a question posed by Watson about whether Tennessee's portion goes directly to hospitals, Lee policy adviser Tony Niknejad said, "Yes, it's separate."

The COVID relief fund contains "multiple buckets" of funding and that includes "direct relief to hospitals," Niknejad said.

Another example reported last week by the Times Free Press is the estimated $237 million in federal emergency grants coming to Tennessee public and private universities, colleges, trade and professional schools, as well as for students. That comes directly to the institutions and students by federal emergency grant formulas aimed at providing support during the coronavirus pandemic, which has effectively shut down higher education.

U.S. Sen. Lamar Alexander, R-Tennessee, and U.S. Rep. Chuck Fleischmann, an Ooltewah Republican, said back in late March that huge sums of money would come into the state under Congress' $2.2 trillion emergency COVID-19 economic rescue and aid package.

Lt. Gov. Randy McNally, the Republican Senate speaker who also is a member of the group, observed, "I think there are a lot of unknowns" about much of the federal response. He noted that none of the money can be used by state government to fill an expected plunge in state tax revenues as economic activity falls.

McNally also noted the state could be looking at an "accounting nightmare" as it seeks to prove to the federal government how the state is spending funds.

Administration officials said they intend to account for every expenditure that's under their control.

Contact Andy Sher at Follow him on Twitter @AndySher1.