As COVID-19 continues to take its financial toll on the state, Missouri legislators are pushing to make $750 million available from federal coronavirus funds for “cash flow assistance” to the state general revenue.

“We have a lot of money in the state treasury right now but not a lot of money in the general revenue funding because the tax (filing) due date was pushed back from April 15 to July 15,” said State Treasurer Scott Fitzpatrick, who came up with the idea. “This would allow the governor’s office, the Office of Administration, to transfer funds from the federal stimulus fund into the general revenue fund for purposes of meeting cash flow need,” relating to that delay.

Fitzpatrick estimated the general revenue being short $860 million in terms of collections in April 2020 compared to April 2019. The transfers from the coronavirus funds would allow the state to continue to pay tax refunds as well.

Normally, the state would go to the budget reserve fund designated for situations like this, but the fund isn’t available from May 15 to June 30 because of constitutional guidelines. Any money borrowed before May 15 would have to be repaid by then, which isn’t practical, Fitzpatrick said. Therefore, his idea, which had its hearing Monday in the form of two bills, would be another “cash flow tool.”

The $750 million would be made available this fiscal year, with another bill extending that availability to next fiscal year, which begins July 1.

But some lawmakers expressed doubt about the validity of such an idea and noted the federal guidelines around its coronavirus relief fund states it cannot be used for making up budget shortfalls. The bills would allow the money to go directly to the general revenue.

“What we are doing right now violates the plain language of that prohibition,” said Rep. Peter Merideth, D-St. Louis.

Fitzpatrick said that wasn’t the case, as language in the bills states explicitly any amount of money taken from the federal stimulus fund must be returned by end of fiscal year 2021; therefore, it is not making up for any budget shortfalls. Fitzpatrick said, ideally, any amount taken would be given back as soon as possible.

He emphasized this was just an optional tool that can be used if needed. It’s important to note the bill does not demand any amount of federal money to go toward this cash flow assistance.

“Number one, it’s not 100% guaranteed that we will do that, and number two, if the federal government comes out with subsequent guidelines that this is not now allowed, we cannot do it,” the treasurer said.

Merideth pushed back and asked if Fitzpatrick had reached out to the federal government about this in the first place before presenting the bill, which he hadn’t. Merideth worried that if this wasn’t allowed, the punishment would be more than simply asking to pay the money back, such as penalties.

Ultimately, proponents pointed to the Friday constitutional deadline to pass a state budget as a reason why it would be better to make this option available now, and if such transfers to the general revenue are not allowed later, it can be scrapped. If the bills weren’t passed now, there would be no such option.

There are restrictions with the transfers, however. The money, if used, would need prior notification to the commissioner of the Office of Administration, the chair of the Senate Appropriations Committee and the chair of the House Budget Committee, partly to allow for clear documentation of what that money is being used for. Federal guidelines require the money be used for coronavirus-related expenses, which Fitzpatrick argues includes the delay of the tax filing deadline.

The bills passed out of committee with overwhelming support and will head to the House floor next.

For more COVID-19 related news, see our section dedicated to COVID-19 updates.
  • Titus was a state government reporter, copy editor and assistant city editor at the Missourian.

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