Wisconsin has received less than most states in federal Covid funding for the government
MADISON, Wisconsin — In a trend that began decades ago, Wisconsin’s state and local governments received less federal pandemic assistance than most other states in the country, according to a new report from the bipartisan Wisconsin Policy Forum.
Less state aid than other states is not new to Wisconsin: The report notes that research measuring federal revenue per capita — dating back to at least 2006 — has placed Wisconsin in the bottom ten states nationally for state aid.
Still, there is a positive reason for the lower federal pandemic aid compared to other states: The federal government used unemployment rates to calculate how much each state would receive for its governments, and Wisconsin had a lower-than-average rate at the end of 2020. according to the report.
The state has also used these funds differently than others, said Jason Stein, research director for the Wisconsin Policy Forum.
“Many other states have chosen or felt compelled to use their ARPA fund dollars to fill gaps in state budgets,” Stein said. A study by the National Conference of State Legislatures found that states have used about 23% of their ARPA dollars to fund lost revenue or state operations. “So far, if you look at Wisconsin, more than half of those ARPA fund dollars have been allocated to the economy and economic relief.”
None of those totals include tens of billions more in other types of federal pandemic assistance to Wisconsin: to individuals, like the stimulus checks, or funds dedicated specifically to businesses, like under the Paycheck Protection Plan loan program. That money was initially aimed at stimulating local governments during the pandemic — but in Wisconsin, that stimulus wasn’t always needed in the state capital or its local communities.
“Federal tax revenues and our federal budget have held up remarkably well during the pandemic, so much so that we just made a $1 billion tax cut and are still building our federal surplus,” Stein said.
That’s different from how Wisconsin weathered the Great Recession more than a decade ago, he noted. The state used federal stimulus funds to plug gaps in the state budget in areas like Medicaid and K-12 education.
“When those funds ran out in 2011, the state was faced with a really big budget shortfall,” he said; The state responded by significantly cutting aid to local governments.
Based on the numbers
- Wisconsin has been allocated $4.86 billion in federal pandemic assistance to state and local governments through the American Rescue Plan Act
- About half of that $4.86 billion was received from the federal government, with the rest coming this May
- As of December 31, Wisconsin had about $1.8 billion in ARPA funds left to spend (including half that was due to be paid out this May). Most of these funds have been allocated
- As a percentage of annual state spending, Wisconsin received 8.7% of the aid, while some states received as much as 17% of their annual spending
- As a percentage of state spending, a separate report ranked Wisconsin last in federal payments directly to the state
- As of 2006, Wisconsin has largely ranked in the bottom 10 states in terms of federal funding
- States have until 2026 to use their ARPA funds
- Wisconsin has spent all of its CARES funding from the first round of federal assistance approved for states early in the pandemic
Read the full Wisconsin Policy Forum report here.
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