Arizona uses federal COVID-19 money to reduce state spending
PHOENIX (AP) — Arizona Gov. Doug Ducey has funneled nearly $400 million of federal coronavirus relief funds to state agencies to help pay for operations, allowing them to return some of their original budget allocations to the state treasury.
Ducey's office touts that move as prudent budgeting that will help the state avoid a severe fiscal crunch but it stretches federal rules on how states can use the federal money, the Arizona Capitol Times reported.
Congress didn't allow states to use Coronavirus Aid, Relief, and Economic Security Act money to replace revenue lost because of the pandemic, and Jared Walczak, vice president of state projects at the Tax Foundation’s Center for State Tax Policy, said some states have chosen to liberally interpret guidance provided by the U.S. Treasury Department.
“Most states have avoided what might be interpreted as directly disregarding the guidance, but many have been flexible in the interpretation of that guidance in hopes that ultimately the Treasury will be similarly flexible in the accountability standards,” Walczak said. “Nonetheless, what’s being proposed in Arizona is a very aggressive interpretation.”
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