Legislators, trying to move quickly after a contentious showdown with Gov. Tate Reeves that affirmed their authority to appropriate $1.25 billion in stimulus funds, hope to have a bill passed next week to provide financial help to Mississippi’s small businesses.
House Speaker Philip Gunn, R-Clinton, said there is a possibility that legislators could vote Tuesday on a small business financial relief package when they return to the Capitol.
The House and Senate members met Friday to discuss where the stimulus money – intended in part to help pay for coronavirus-related expenses – should be spent.
“The two areas we hear the most about are unemployment (benefits) and small business help,” Gunn said.
Federal money already is available for the Mississippians who have lost their jobs because of the COVID-19 pandemic, but people are having a difficult time getting through to an overwhelmed Employment Security Agency to file their claims to receive benefits. Legislators are grappling with ways to speed up the process.
For about a week Reeves has been talking about using a portion of the federal money to provide grants to small businesses that in many cases have been closed because of safety precautions. He has particularly spoken of the need to help barbershops and hair salons.
This week legislators and Reeves engaged in a contentious argument over who had appropriating authority of the funds, setting up for what could have been a dramatic showdown. That showdown was averted when Reeves agreed to work through the legislative appropriations process to spend the money. He maintained that he could have more quickly and efficiently spent the funds, but said an ongoing fight would have taken the focus away from helping Mississippians.
But it became apparent Friday that Reeves – or agencies he controls – still will have significant say in how the funds are disbursed. During a meeting of the Senate Appropriations Committee, a tentative plan was put forth where initially $100 million would be put into a fund to provide grants of up to $25,000 to small businesses to pay the costs of salaries, rent and utilities if they were closed or impacted by the pandemic.
The Mississippi Development Authority, an agency controlled by the governor, would administer the funds and establish regulations for who would receive the funds under broad parameters established by the Legislature.
“Time is of the essence,” said Senate Finance Chair Josh Harkins, R-Flowood. “We are trying to make these funds available as soon as possible.”
He said there are businesses that need help to remain viable.
The funds would be available for companies with 50 or fewer employees. Sen. Angela Turner-Ford, D-West Point, pointed out that some companies might have fewer than 50 employees, but still be large in terms of their net worth and income. She and others said a focus should be on helping truly small companies, particularly sole proprietor companies that did not qualify for help under another federal program – the Payroll Protection Program (PPP).
The PPP program provided help to companies for payroll and other expenses during the pandemic.
Harkins said under the state program companies that did not receive other federal help would receive the first grants. After that, companies that received money through the PPP could apply for the state grants.
Sen. Chad McMahan, R-Guntown, also questioned leaving the authority to administer the program with the Mississippi Development Authority, especially since the agency does not have locations throughout the state and thus is not easily accessible for companies away from Jackson.
In the House, the speaker created various committees to deal with coronavirus-related issues. Some of those issues included help for local governments with coronavirus costs, distance learning issues and ways to make it safer to vote in November if the coronavirus is ongoing. Both the House and Senate held meetings to discuss those various issues with the intent of beginning to take up actual legislation next week.
Eric J. Shelton/Mississippi Today, Report For America
Construction on University of Southern Mississippi’s new $7 million volleyball facility was primarily funded by welfare dollars.
Many of the recipients of federal funds in a sprawling embezzlement scheme in Mississippi say they didn’t know the money a private nonprofit awarded them was intended to serve the poor.
But officials representing one of the largest welfare beneficiaries — the University of Southern Mississippi Athletic Foundation and, by extension, the University of Southern Mississippi — were aware that funding for construction of a new volleyball stadium on campus came from a Mississippi Department of Human Services block grant, according to board meeting minutes.
In a 104-page letter outlining massive misspending at Human Services, State Auditor Shad White questioned welfare purchases at several schools, including $5 million that Mississippi Community Education Center (MCEC), the nonprofit at the heart of the alleged scheme, paid to build a volleyball facility, Mississippi Today first reported.
Eric J. Shelton/Mississippi Today, Report For America
University of Southern Mississippi’s new volleyball facility, opened in December of 2019.
“IHL cannot claim ignorance of this fact. That assertion flies in the face of your own minutes,” White wrote in a letter to Commissioner of Higher Education Alfred Rankins Thursday after the commissioner challenged the auditor’s characterization of the deal. “If IHL objected to the arrangement with MCEC, then the time to voice that objection was when the matter came up for a vote, not after the State Auditor pointed it out.”
The sublease, attached to the lease in university records, according to a Mississippi Today public records request, showed Mississippi Community Education Center agreed to pay $5 million dollars — which was used to pay for most of the $7 million construction.
In October of 2017, the IHL board approved the university-foundation lease, meeting minutes reveal, with the understanding that the foundation would sublease the property to Mississippi Community Education Center for $5 million and construct the new volleyball stadium called the Wellness Center.
“MCEC’s funding for this project is via a Block Grant from the Mississippi Department of Human Services,” the minutes state. “The funding from MCEC shall be prepaid rent to the Foundation in the amount of Five Million Dollars ($5,000,000) for the leasing of certain USM athletic facilities including but not limited to the to be constructed Wellness Center, Reed Green Coliseum and additional athletic space as agreed upon by USM and the Foundation.”
Human Services is most well known for administering federal grants, such as Temporary Assistance for Needy Families (TANF) and the Community Services Block Grant and Social Services Block Grant, to help low-income folks.
Commissioner Rankins argued in a Wednesday letter to the auditor that IHL trustees “did not approve” the $5 million lease — only the lease between the university and the foundation — and asked White to correct what he called inaccuracies in the report.
“This lease agreement was reviewed by a Special Assistant to the Attorney General and recommended by the Attorney General’s Office for approval by the Board of Trustees,” Rankins wrote.
Specifically, the audit said the foundation’s lease with the nonprofit was “transferred” to the university and IHL approved the “transfer of the lease;” White denied Rankins’ request to amend the report.
The foundation’s lease said the nonprofit would use the university’s athletic facilities to conduct programming to “benefit the area’s underserved population.” Since they penned the five-year lease in 2017, the nonprofit has utilized the property it rented exactly one time: for a Healthy Teens Rally in 2018.
“Instead of quibbling, perhaps your time could be better spent providing the public with a plan for the Wellness Center to be used by the at-risk community in Hattiesburg and providing that to me in a letter,” White wrote. “This way, the TANF money that was paid for the Center might be used to benefit the community it was intended to benefit.”
IHL spokesperson Caron Blanton refused to explain to Mississippi Today why the board approved the university’s lease with the foundation, knowing the foundation planned to sublease the university’s property to a federally-funded nonprofit for $5 million, or if $5 million is the going rate for such a lease.
Blanton did not dispute that IHL and the university knew the money came from Human Services. When asked for an interview, university spokesperson James Coll said officials would not make further comment.
Athletic Foundation President Leigh Breal, who signed the lease with Mississippi Community Education Center, did not returned several Facebook messages and calls to her family trucking business. The auditor said the foundation’s reports to the IRS don’t appear to list the funds as rent revenue and that while the entities did enter a lease, the exchange was really a donation in substance.
The nonprofit founder Nancy New, who also signed the lease and is awaiting trial for her role in the embezzlement scheme, to which she pleaded not guilty, has not returned repeated calls.
Mississippi Community Education Center also contracted with University of Southern Mississippi to fund nearly $600,000 worth of “externships” that allowed psychology students “to study in a real-world work environment,” the audit said.
The externships were positions at New Summit School, the private school owned by New, “therefore, MCEC used TANF funds to pay for temporary workers at (New Summit School),” the audit said.
The nonprofit transferred more than $6.5 million in TANF funds to New’s private school operation called New Learning Resources Inc.
University of Southern Mississippi is not the only Mississippi school to benefit from welfare dollars doled out by Mississippi Community Education Center, which had received roughly $65 million from Human Services since former Director John Davis took control of the agency. A Hinds County grand jury also indicted Davis and he pleaded not guilty.
Mississippi State University received $816,282 between 2018 and 2019 on three programs the auditor said did not meet allowable cost guidelines: recruitment of students into the college of education, augmentative communication therapy and dyslexia therapy at T.K. Martin Center for Technology and Disability.
“First and foremost we stand behind the validity and value of the services in those programs,” said Mississippi State University spokesperson Sid Salter.
T.K. Martin Center does not specifically target its programs to low-income children, yet it publicized that it received a grant from Families First for Mississippi, the statewide program funded by TANF, in 2017 to start its dyslexia program.
The nonprofit also paid to advertise and sponsor — and in some cases purchased tickets for — football, basketball and baseball games at Mississippi State University. Payments to the university’s advertising contractor totaled nearly $317,000. “That’s arms length from the university proper,” Salter said.
The audit questioned the “unreasonableness of providing advertising for programs designed for the needy at college sporting events, lack of adherence to stipulations in
the grant agreement, and the lack of any correlation to how the advertising
benefited the programmatic nature of the TANF program.”
Mississippi Community Education Center also paid $236,000 in TANF to Belhaven University for “leadership development” and $563,600 to Delta State University — costs the auditor questioned. Delta State University President William LaForge said it used the grant to pay the salaries of academic counselors for primarily student-athletes and did so “without any knowledge whatsoever that it might have been improperly channeled welfare funds.”
The auditor similarly questioned grant payments from Mississippi Community Education Center and another nonprofit Family Resource Center of North Mississippi to three public K-12 school districts totaling $645,394.
TANF may be used for four broad purposes: provide cash assistance to poor families, promote employment, prevent out-of-wedlock pregnancies and encourage two-parent families.
TANF may not be used for public K-12 costs (doing so “would be passing on to the TANF program the costs of the State’s public education system,” the federal agency Office of Family Assistance wrote in 2005), to construct buildings or purchase real estate, the auditor noted.
Some of the organizations Mississippi TANF funded — possibly some programs questioned in the report — offered legitimate public services. But if the entities didn’t retain documentation showing who they served or that their clients were income eligible, the auditor could not determine the funds were spent legally.
The TANF scandal is under ongoing investigation by the FBI. The auditor’s office presented its report to the U.S. Department of Health and Human Services, which will use the information to determine which, if any, payments must be refunded. One recipient, Brett Favre, who got $1.1 million for speaking engagements he never attended, according to the audit, voluntarily began repaying the state. White said others have contacted him indicating their intent to also return the funds.
Attached you’ll find the Guidelines for a phased reopening of the City of Tupelo. According to the accompanying documentation, these proposals were crafted with both state and federal guidelines as sources.
Some of this information may be subject to change as new guidelines were announced from the Govoner’s office as this article was being written.
Good Friday morning everyone! We will see periods of showers throughout the day with a high near 66. Chance of precipitation is 90%. It will be breezy today with south winds shifting to the northwest at 15-25 mph with gusts up to 40 mph possible! There is a Wind Advisory in effect for North Mississippi from 7 am – 7 pm. You will want to secure any outdoor furniture, sun umbrellas, plants, etc that can be blown around and damaged. Tonight will be mostly clear with a low near 41…Brrrrrr in May?!..Grab the umbrella as you head out the door this morning and have a pleasant Friday everyone!
House Speaker Philip Gunn, left, Gov. Tate Reeves and Lt. Gov. Delbert Hosemann address the media at a press conference on Thursday.
After days of bickering over who should control the spending of $1.2 billion in federal coronavirus relief, legislative leaders joined Gov. Tate Reeves at his Thursday press briefing to announce they would control the spending and listen to the governor’s advice.
Reeves for weeks insisted he had sole spending authority over the federal stimulus funds. But Lt. Gov. Delbert Hosemann and House Speaker Philip Gunn abruptly called lawmakers back to Jackson last week to pass a bill that shored up their spending authority over the funds. Reeves then threatened to veto the bill, and Capitol politicos scrambled to whip votes for a possible veto override.
But just hours before Reeves’ deadline to sign or veto the bill, the leaders announced on Thursday they would try to work together on the federal spending authority after discussing it Wednesday evening at the Governor’s Mansion.
“I want to thank the governor for working with us to reach an agreement in this matter because as you know we’ve had some disagreements,” Gunn said. “The conclusion that we’ve reached is the Legislature will appropriate those dollars while working in conjunction with the governor administering those dollars.”
Gunn and Hosemann said the funds would work through the normal legislative appropriations process.
Reeves, who insisted on Thursday that he “didn’t care who gets to spend the money,” said he believes the most important thing was to get the federal funds to Mississippians who need it. But Reeves suggested that his involvement in the leaders’ understanding could change.
“I have made a determination that the best way, at this time, to get money to the people that need it is to reach out to the lieutenant governor and speaker and find a solution,” Reeves said. “Let me be clear: That is the best path forward for Mississippi today. If that changes, so be it.”
Reeves continued: “I am committed to working with legislative leadership as long as we can reach resolutions that are best for Mississippians. I believe (Hosemann and Gunn) are well-intentioned and want to do right. Now it’s time to execute.”
In Reeves’ daily news conferences the past four days, the governor said legislators taking action to try to take control of the funds could put people’s lives in jeopardy and accused legislators of engaging in “petty politics.”
But after a scathing letter from the speaker criticizing the governor’s comments, Reeves toned down his rhetoric in more recent news conferences. As the process unfolded, it appeared more likely that the governor’s veto would be overridden — something that has not happened to a Mississippi governor since 2002. And it would be the first time in the modern era that a Republican governor’s veto was overridden by a Republican majority Legislature.
Hosemann said on Thursday that the Senate will hold the bill lawmakers passed last week so that the three leaders can nail down details about how they will work to spend the federal funds. This delays any potential veto decision from Reeves and a veto override vote in the Legislature.
One area where negotiations will continue is whether to contract with a “third party administrator” to help disburse the funds in accordance with strict federal guidelines. Reeves maintains such an administrator is needed to ensure the state is not later required to pay back any of the funds.
The federal funding in question is part of the $2 trillion Coronavirus, Aid, Relief and Economic Security (CARES) Act that Congress passed in late March. The bill provides funding in a litany of areas as a response to the COVID-19 pandemic, including help for individuals, businesses, educational entities, state public health agencies and various other aspects of state and local governments.
Lawmakers are in session only for the rest of this week to discuss legislation that would help unemployed Mississippians receive financial assistance. They plan to return indefinitely on May 18 to begin passing the state’s regular general fund budget and debate other typical state matters.
Eric J. Shelton/Mississippi Today, Report For America
Vicksburg Warren School District employees prepare to make food deliveries to students in the school district Wednesday, March 18, 2020.
The coronavirus pandemic has closed school buildings and forced educators to rethink how to deliver instruction. But a windfall of federal funds designated for Mississippi’s K-12 and higher education institutions may change the way schools offer classes and other resources.
On March 27 President Donald Trump signed the Coronavirus, Aid, Relief and Economic Security Act to provide much needed financial assistance to states affected by the coronavirus pandemic. It contains $2 trillion in aid, and $30.75 billion of that is designated to states for education.
The Education Stabilization Fund is split into categories: The Governor’s Emergency Education Relief Fund, the Elementary and Secondary School Emergency Relief Fund, and the Higher Education Emergency Relief Fund. A separate pot of money is designated for states with the highest coronavirus burden and for the Bureau of Indian Education.
How and when this money is spent may change, because the Legislature is currently in a political battle with the governor to strip him of his sole spending authority of stimulus dollars and have the funds flow through the appropriations process rather than be dispensed by the governor.
A letter from Secretary of Education Betsy DeVos to governors said this “extraordinarily flexible emergency block grant” allows governors to determine how to meet the needs of students and schools, postsecondary institutions and education organizations. The letter specifically stated charter and non-public schools are included.
“My Department will not micromanage how you spend these funds, but I encourage you, at a time when so many school boards, superintendents, and institutions of higher education have had to close their brick and mortar campuses for the balance of the school year, to focus these resources on ensuring that all students continue to learn most likely through some form of remote learning,” the letter read.
While these monies are to be spent at the governor’s discretion, the Mississippi Department of Education told Mississippi Today it is collaborating with the governor on the use of these funds.
Last week, Reeves said he intended to use some of the CARES Act funds to help with distance learning.
“We know that this virus could come back, and distance learning may become a more typical part of our education system. We also know that there are families without access to the tools that are necessary for distance learning,” Reeves said. “I have a plan to utilize CARES Act funds to help fix that, and it will be a top priority. Support for teachers, schools and especially parents will be a critical part of our recovery.”
Elementary and Secondary School Emergency Relief Fund (ESSER Fund)
These dollars go directly to the Mississippi Department of Education, which will then subgrant the funds to school districts. The funding amount the state received was calculated using the same formula used to determine Title I funding, which are federal dollars given to schools with a high number of low-income students enrolled.
The district by district allocation amounts are not available yet, according to a department spokesperson, but department officials are working on releasing guidance documents to schools on how to spend the money.
“I think all districts, particularly those that are struggling to provide distance learning really need to be thinking very carefully about how this money should be spent,” said State Superintendent Carey Wright. “The important aspect of this that we’re still working on is that there is a tremendous amount of reporting responsibility back to the federal government about how this money is spent.”
Higher Education Emergency Relief Fund (HEERF)
These funds go directly to colleges and universities. You can view the allocations to all colleges and universities here. Institutions are required to use at least half of the funds they receive to provide emergency financial aid grants for students who have been affected by the pandemic. This means the funds can be used to help students afford food, housing, course materials, technology, health care or child care. The other half of the funds can be used by and for the universities “to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus.”
