RALEIGH — Lawmakers in the N.C. Senate are pushing back after receiving an explanation by the Cooper administration as to why the governor redirected COVID-19 relief funds earmarked for rural broadband projects.
A Nov. 21 letter from Gov. Roy Cooper’s legislative director, Lee Lilley, claimed that the $30 million appropriation would “violate U.S. Treasury rules” because the projects in question would not be “realized in the statutory timeframe.”
Senators responded to Lilley’s claims, reiterating in a response letter that they had done due diligence on the spending.
“The legislature reviewed all relevant federal rules and concluded, in a supermajority vote, that appropriating CARES Act funding toward rural broadband is an eligible expense. Dozens of other states reached the same conclusion,” reads the letter from lawmakers.
Lilley’s letter is not specific about how the funding would violate federal rules and other states have used CARES Act funding for expanding broadband. In fact, the CARES Act has specific sections that address using funds for broadband — including distance learning, telemedicine, provider reimbursement and broadband expansion.
In July, Missouri’s governor announced $50 million in CARES Act funds would be used to expand broadband across the state, which will help support access to telehealth and remote education. The following month, New Hampshire also said it would spend upwards of $50 million to expand broadband.
In October, Idaho’s Broadband Grant Review Committee awarded $48.9 million in CARES Act funding related to broadband infrastructure, equipment and services.
Similarly, a November Pew Charitable Trust report details Tennessee and Vermont allocating CARES Act funding for rural broadband infrastructure. Tennessee allocated $61 million to support new infrastructure deployment, and Vermont dedicated $17.4 million to a COVID-Response Accelerated Broadband Connectivity Program. Also, on the last day in November, Augusta County in neighboring Virginia was given over $333,000 in CARES Act funds for the expansion of rural broadband.
One of the lawmakers leading the inquiry, Sen. Jim Perry (R-Wayne), told North State Journal that they have had some internet providers who have said they can increase capacity before the end of the year if that is what is needed.
“Absent a pure black and white ‘no’ on this, I just feel like our jobs are to advocate for our people,” said Perry.
“If we’re going to take an aggressive stance, I think we need to be aggressive on behalf of the people who need the services and not further burdening them,” Perry said, while calling the guidance on spending the CARES funds “vague.”
Lilley’s letter also says that the governor’s budget team only began discussions on the matter starting Nov. 19. It’s been over 75 days since the bill designating the funds for the GREAT Grants program was passed and subsequently signed by Cooper.
“That is something that absolutely cannot be defended in my opinion,” said Perry. He said there should have been immediate communication, instead nothing came from Cooper’s office for 75 days.
The long delay by the Cooper administration in communicating that the CARES Act broadband funds were being pulled may mean no funds get to rural areas at all. Broadband projects can take time, which is a critical issue in spending the funds before they expire on Dec. 30 of this year.
“People were expecting funding awards,” said Perry.
The latest letter from lawmakers also took issue with how long the governor’s office took to decide there was an issue, stating that “conversations could have occurred in September or October rather than the end of November.”
The letter also said that “for weeks” legislative staff had been asking governor’s staff if they planned to direct any money away from CARES Act-funded projects and for a list of potential recipients of any reallocated projects. Lawmakers said they did not receive that information from the governor’s office but said instead they “learned from providers in our own districts of your office’s decision.”
