Senators question Governor Ricketts’ decision to deny $120 million in rental assistance | Local
Gov. Pete Ricketts’ decision to reject $120 million from the federal government for rent and utility assistance drew criticism from some Omaha-area senators on Friday.
State Budget Director Lee Will answered questions from lawmakers and explained Rickett’s rationale in rejecting American Rescue Plan Act money during an appropriations committee hearing. Will noted that Nebraska hasn’t spent its first emergency rental assistance payment and there are concerns about potential fraud.
This contrasted with the message from defenders, who said there was an urgent need for help. They’d like the governor to reconsider his decision not to claim the second round — which Will says puts Nebraska alongside Arkansas as the only two states to leave money on the table.
This fact did not please some on Friday.
“The Governor’s Budget (proposal) calls for funds for commercial landlords,” said State Sen. Justin Wayne of Omaha. “We can’t continue to put profits before people. If it’s irresponsible to help residential landlords, it must also be irresponsible to help commercial landlords.”
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Under the state’s current program, struggling tenants were able to get up to a year of back rent plus three additional months for a total of 15 months. Funds are sent directly to landlords and utility providers on behalf of tenants. The state, Omaha, Lincoln, Douglas County and Lancaster County have all received money under the program.
Nebraska received $200 million from the US Treasury for the first round, according to Will: $22.2 million for the city of Omaha, $13.5 million for the city of Lincoln, $4.3 million for Douglas County, $1.4 million for Lancaster County and $158.6 million for the state. for help in the rest of Nebraska.
The state used marketing efforts and other outreach to promote the program, Will said. With $44 million still available to Nebraskanians outside of those four other jurisdictions, the state opted not to take the additional $120 million.
Erin Feichtinger with Together Omaha brought the situation to the committee’s attention earlier this week.
Through his work, Feichtinger learned that Douglas State and County had no plans to seek second-round funding. (Spokeswoman Leia Baez confirmed to the World-Herald that Douglas County did not apply for the second round of funding, saying it had enough funding in the first round to help county residents in outside the Omaha city limits.)
When the U.S. Treasury extended the deadline for applying for second-round funding until the end of March, Feichtinger saw an opportunity to raise the issue.
“These emergency rent assistance funds have been an absolutely essential lifeline not just for tenants, but also for landlords and for entire communities to stay afloat in really tough times,” he said. she declared. “Of course there have been problems with the operation of the program. It has been difficult to access funds. These are all problems we can solve. But we can’t do any of this – we can’t solve any problem problems — if we don’t ask for this funding.
After finding that allocations didn’t necessarily match needs, Will said the state reallocated some of its funding, sending a total of $84.7 million to other localities. The state has only used $14.2 million in tenant assistance so far, he said, for 3,000 unique rental units.
“It shows that the amount awarded was clearly disproportionate to the demonstrated need,” Will said. He also said that 10% of claims have been flagged as potentially fraudulent and are being investigated further.
The $44 million still available for rent assistance in the first round, combined with potential fraud, makes running in the second round “an unfavorable idea for hard-working taxpayers in the state,” Will said. .
He also said second-round money should no longer be tied to an impact of COVID-19 and called it “discouraging”.
The Treasury did not respond to multiple requests to confirm whether this is the case.
Even if that’s the case, Feichtinger said the state could impose its own funding requirements. A spokesman for the governor did not respond when The World-Herald asked about the possibility.
In a prepared statement explaining his decision, Ricketts cited inflation, the national debt and the state’s low unemployment rate.
“The federal government has said you no longer need any COVID impacts to qualify for funding that was specifically allocated to address COVID impacts,” he said. “We shouldn’t be using taxpayers’ money to pay people’s rent without a good reason. It’s irresponsible spending like this that has led to record inflation and a rising national debt, and in this case, the Nebraska chose not to participate.”
But some senators questioned Ricketts’ reasoning, particularly when any unused money would be redistributed to other states and not to taxpayers.
“Why wouldn’t we request these funds, to ensure that we have the flexibility to meet the needs of our state, when these funds will simply flow to the rest of the other states if we don’t request the funds?” asked the Senator Tony Vargas of Omaha.
The current program is expected to help tenants through the end of this year, while the second round could be spent over the next four years.
“Philosophically, I think we have to ask ourselves in Nebraska: when we have an unemployment rate of 1.7%, should we be paying housing assistance for the next four years?” said Will.
Vargas suggested that if people are not using the program, the state should reach out to the hardest-hit communities to assess needs.
While Will said the state has tried to raise awareness, others said the program was not easy to use and education was lacking.
Tanya Gifford, executive director of Lift Up Sarpy County, said she believes the millions weren’t used because few people knew about the program or had other issues, such as lack of internet access.
State data shows the first round of funding resulted in 2,019 awards in Sarpy County totaling approximately $4.9 million. Meanwhile, Gifford said Sarpy County agencies received 1,757 calls in January from people seeking help with rent and utilities.
Comparing rental and utility assistance distributed by five Sarpy County agencies and the state program, Gifford said 15% came from local and private donors and 85% came from federal aid to state emergency rental. If that goes away, they would be left with an unrealistic burden.
“There’s no way we can financially cover that,” Gifford said. “And so, so, I mean, we’re going to be in a state of disaster in Sarpy County, specifically, because we don’t have shelters.”
Karen Rathke, president and professional director of Grand Island-based Heartland United Way, said she applauds Ricketts for getting the federal CARES Act money so quickly in 2020 and trying to streamline that application process.
In 2020, the state released CARES Act money to the Department of Health and Human Services, and his organization applied for and received funding. That year, Rathke said his office helped 664 households in Hall, Hamilton and Merrick counties with a total of $429,235 for rent, mortgage payments or utility assistance.
In 2021, this has dropped significantly. He helped 322 households with $157,588. She estimated they had gone from being able to help around 75% of those eligible for assistance in 2020, to around 30 or 40% in 2021 and not even 20% so far this year.
The process for people to access ARPA funds through the state system comes with additional challenges, she said, one of which is requiring owners to complete the application process. Rathke said some owners found it cumbersome.
There’s still a “tremendous need for funding,” Rathke said. On Friday alone, she said she had received eight requests for help. She sees an opportunity to take best practices and create a system that could meet Ricketts’ goals and local needs, she said, and they would be grateful to partner with her office on this.
“Across the state, whether you’re a community action agency, whether you’re a United Way, whether you’re a homeless shelter or a domestic violence shelter, or many other providers: there are 120 millions of reasons to apply for these funds, and trust in dedicated service providers to do what it takes to meet the need that exists.”
Senator Anna Wishart of Lincoln asked Friday if the administration would be willing to reconsider her candidacy, if enough senators are able to articulate a good reason to do so.
Will said Ricketts would want data showing the state would not sit on the $120 million in the event of potential fraud. Not all senators were convinced by the logic of the office.
“At the end of the day, if 48 more states were able to figure this out and make sure it meets the needs of their people, and we could offset the costs and it’s the taxpayer funds that won’t come back because the treasury going to redistribute it to all the other states – I don’t see why we don’t apply and then figure out how to make it work and improve our processes to make sure there’s no fraud,” Vargas said.