Is it safe?

Commissioners evaluate CARES funding

As the deadline for the Kootenai County budget draws near, the Board of County Commissioners questions whether to include a possible $10 million in CARES Act funding or steer clear due to a lack of U.S. guidance.

In early June, Gov. Brad Little announced a property tax relief program that would use $200 million of Idaho’s $1.25 billion cut of the CARES Act. This piece of the federal pie would potentially cover the payroll of public safety and public health employees such as firefighters, law enforcement, and EMTs.

To apply this program and give residents some relief, areas like Kootenai County would need to cut or lower their property tax value.

While there has been no confirmation from the U.S. Treasury, Little assured residents the White House positively reinforced Idaho’s plan during a meeting in Washington, D.C., on July 16.

In an earlier interview, Kootenai County finance director Dena Darrow pointed out the CARES Act can only be used for items the U.S. Treasury has permitted. These items must be things directly attributed to or a result from the mitigation of COVID-19.

“What the state is doing is using the CARES Act for tax relief, well it specifically says in the U.S. Treasury guidelines that you can’t use it for tax relief,” Darrow said.

Question No. 26 on the U.S. Treasury frequently asked questions document pertaining to the assistance of property tax says CARES Act funding “may not be used for government revenue replacement, including the provision of assistance to meet tax obligations.”

“Our external auditors said if this use of the CARES Act it’s not legal and it gets audited, we’d have to pay it back,” Darrow said. “If we have to pay this $10 million back to the U.S. treasury with interest we are going to have to take all of our forgone saving balance to do it.”

Commissioner Leslie Duncan, who opened the discussion in Monday’s meeting, was hesitant to implement Gov. Little’s property tax program due to a lack of clarification by the U.S. treasury.

“This still gives me a little bit of concern that the treasury’s not willing to give us written confirmation that they’re OK with this,” Duncan said. “This $10 million that (Kootenai County) is slated to get would be all of our forgone balance, should they come back and say we did this wrong and they want us to repay the money.”

Steve Matheson, the Kootenai County treasurer, expressed similar uncertainty during the meeting. In a conference call earlier this summer with Little and his staff, Matheson said the governor acknowledged there would be no more guidance by the U.S. treasury.

“(Little and his staff) acknowledged that the U.S. Treasury and the White House will not come forth with any new guidance because any additional clarifications would create more questions and more concerns,” Matheson said. “The rationale for the governor was that even though Idaho is safe in their assumptions, the U.S. Treasury and White House are not going to support it in any kind of written form.”

Commissioner Bill Brooks was not as skeptical about accepting the CARES funding however, arguing there is no knowing what the future of the funding could hold.

“I’m comfortable, I don’t think with something like this there is a guarantee,” Brooks said. “I would like to know what we’re going to get is what I think we’re going to get and we’re not going to get less.”

While not expressing a definitive opinion to step in or out, Commissioner Chris Fillios echoed Duncan’s concern about a lack of validation by the U.S. Treasury.

“I guess it’s wait and see, my current thinking is that if we don’t get something bona fide that is in writing I would be leaning against this,” Fillios said. “Maybe they have a deal, maybe the governor has a special relationship with the president but boy I’d sure like to see it in writing because at least if we have that if it’s ever challenged we’d have some cover.”

The commissioners will make a decision on their plans for CARES Act funding before the final county budget is set on Aug. 26.