Rescue funds raise hackles

COEUR d’ALENE — Kootenai County residents voiced concerns about “strings” attached to federal funds for COVID-19 relief, some of which did not appear to be based in fact.

Kootenai County has been allocated a $32 million share of federal funds through the American Rescue Plan Act (ARPA).

The funds are to be used for the direct or indirect response to the COVID-19 public health emergency.

Eligible uses of the funds include:

• Revenue replacement for the provision of government services to the extent of the reduction in revenue due to the COVID-19 public health emergency

• COVID-19 expenditures or negative economic impacts of COVID-19, including assistance to small businesses, households and hard-hit industries, and economic recovery

• Premium pay for essential workers

• Investments in water, sewer and broadband infrastructure

Restrictions on the uses of these funds include:

• Funds allocated to states cannot be used directly or indirectly to offset tax reductions or delay a tax or tax increase

• Funds cannot be deposited into any pension fund

The Kootenai County ARPA Task Force is responsible for the review of all project and program requests presented to the county.

So far, the county has received about $98 million in requests for funding — more than three times what the rescue funds can cover.

These requests come from the Kootenai County Sheriff’s Office, local water and sewer districts, the Kootenai County Fairgrounds and many other bodies and organizations.

Requests for ARPA funding are undergoing evaluation.

During the public comment portion of the Kootenai County Board of Commissioners’ regular monthly business meeting on Wednesday, some residents expressed concern that inflation will increase if the county accepts its share of ARPA dollars.

Kootenai County Treasurer Steve Matheson said the funds allocated to the county make up approximately 0.00168% of all ARPA funds, which total $1.9 trillion.

“It’s almost incomprehensible for me to accept an argument that the county accepting $32 million will create any kind of inflationary impact,” Matheson said.

The county accepting or refusing ARPA funds will neither increase nor mitigate inflation, he said.

Rathdrum resident Rachelle Ottosen, who last year was elected as a Community Library Network trustee, described ARPA funds as a “Trojan horse.”

“There are always strings attached to money,” she said. “Requiring compliance with unspecified future federal laws, mandates, executive orders, et cetera, is extremely dangerous and massively reduces our local autonomy.”

Kootenai County must administer ARPA funds in a manner that complies with the regulations attached to those funds. For example, ARPA dollars may not be deposited into any pension fund.

Accepting ARPA funds does not obligate the county to do anything beyond that, according to Resource Management Office director Jody Bieze.

A memorandum from the Idaho Legislative Services Office, which reflects the opinion of the Idaho Attorney General, reportedly indicates that the federal government cannot retroactively impose new conditions on the funds.

Federal laws apply to state, local and municipal governments whether they accept ARPA funding or not.

Several residents said they fear accepting ARPA funds would obligate Kootenai County to adhere to executive orders issued by the president of the United States.

However, executive orders pertain to the federal government, particularly the executive branch and its agencies.

Such orders do not apply to state, local and municipal governments. Accepting ARPA funds does not change this.

Randy Neal of Coeur d’Alene told commissioners he believes Kootenai County should reject ARPA funds because they’re unnecessary.

“Idaho currently has a tax surplus in the range of $1 billion,” he said. “I find that we don’t actually need this (ARPA) money.”

Indeed, Idaho’s surplus is the highest it’s ever been — about $1.9 billion.

Gov. Brad Little has proposed using the money to pay off state building debt, clearing out backlogged infrastructure repairs and setting some aside for the state’s rainy day accounts.

The details and plans for the surplus funds will be hammered out by Idaho legislators during the 2022 session, not by county commissioners.

If the county refuses the $32 million, Matheson pointed out, Kootenai County taxpayers will instead foot the bill for needed infrastructure that would’ve been covered by ARPA funds.

“To load another $32 million of obligations of things that need to be done onto the backs of property taxpayers is unacceptable to me,” he said.

Liz Wooster of Post Falls objected to that reasoning.

“That comes across as a threat to raise our property taxes,” she said. “I don’t agree with that. I think whoever comes up with the budgets should come up with an alternative.”

Several residents echoed the sentiment that Kootenai County should fund infrastructure without using ARPA funds or increasing property taxes.

One person suggested the community could “do a fundraiser” to pay for projects such as paving roads.

The federal funding allocated to Kootenai County through ARPA will be released in two installments and assigned to projects by the end of 2024.

Use of the $32 million is available through Dec. 31, 2026.

The Kootenai County Board of Commissioners will receive additional public input about ARPA funds at future meetings.