Before City Council meets to approve the $3.4 billion fiscal year 2023 budget this Thursday, a 2 p.m. Tuesday work session and public hearing will give citizens one more opportunity to be heard.
Among the items council members will discuss is how to use the $75 million windfall paid to the city in CPS Energy’s annual revenue distribution, which this year ballooned from an anticipated $361.2 million to $430 million, thanks to extreme summer weather and rising energy costs.
Meanwhile, the 2023 budget will include $195.5 million in American Rescue Plan Act (ARPA) funds drawn from the $326,919,408 in state and local recovery funds received by the city.
Of the $195.5 million, $119.9 million will be distributed to San Antonio nonprofits, small businesses, arts organizations, and housing and infrastructure projects; $29.6 million will cover lost revenue in the Hotel Occupancy Tax Fund and General Fund; $26.4 million will be used to fund Metro Health’s continuing response to COVID-19; and $19.6 million will go to airport operations and capital projects.
Click here for a deeper dive into the city’s use of federal coronavirus relief. Since April 2020, the city has received more than $1.2 billion in federal and state relief funding, while it lost nearly $1 billion in anticipated revenues during that same time period.
By month’s end, the city will have spent $852.17 million of that $1.2 billion. The 2023 budget is set to include $195.5 million more, which leaves $162.3 million to be spent in FY 2024 and FY 2025.
Budget articles and columns bore most readers, but like school board elections, budgets matter enormously, and in this instance, the pandemic relief funds have proven to be, literally, a lifeline. Without such funding, San Antonio and every other U.S. city (and county) would have fallen off a fiscal cliff and into deep unemployment and recession.
Yet a complaint I hear with growing frequency is that the $5 trillion in federal COVID-19 relief and stimulus funding ($3.9 trillion under the Trump administration and $1.9 trillion under the Biden administration) distributed to states, cities and counties was excessive and wasteful and has contributed to the inflationary economy. People are grumping about the growth in the federal deficit.
The complaints are legitimate if the target is the much-abused $800 billion Paycheck Protection Program (PPP) approved by Congress and the Trump administration and managed by the U.S. Small Business Administration. Billionaires, dishonest business owners and outright con artists siphoned off tens of billions of dollars in loans from the program, according to the Justice Department and other federal investigative agencies. Most of those loans were forgiven.
A total of 1,500 individuals or entities have been charged criminally, and 450 people have been convicted. A staggering total of 39,000 PPP fraud cases are under investigation, according to the New York Times. Bexar County businesses received more than $2.3 billion in PPP funds meant to protect jobs and keep small businesses from failing.
Individuals who made false claims face prosecution, but don’t expect most of their ill-gotten gains to be recovered.
The so-called PPP relied on the honor system, which, in retrospect, may be one of the most ridiculously naive decisions by the federal government in memory. The U.S. Treasury Department, on the other hand, has put in much stricter guidelines controlling how local government entities allocate ARPA funds.
The city’s allocation of ARPA funds was preceded by numerous public meetings, council workshops and online outreach and feedback opportunities. The allocations were made carefully in order to avoid future budget years with funding gaps.
Bexar County has not yet allocated all of its ARPA funding, but the city process was carried out transparently and without political meddling. The city’s most vulnerable citizens, who suffered the most during the pandemic, will be the primary beneficiaries of ARPA-funded programs and projects.
That is as it should be. Too many people took advantage of the pandemic to pocket federal relief funds they neither needed nor deserved.
