The Montana Department of Commerce on Monday told a legislative subcommittee it needs $44 million in rental assistance directed toward the state from the most recent round of federal coronavirus aid.
In January, a budgetary committee voted to cut the $200 million expected to be sent from the federal government to the state for rental aid to $17 million. To be able to spend the money from the aid package, the Legislature must appropriate it.
When the state got $1.25 billion from the federal government last spring through the Coronavirus Aid, Relief, and Economic Security Act, the Legislature was not in session so it fell to the former governor to decide how the funds would be spent. That was a source of great frustration to GOP lawmakers, who a little over a year ago called for more input. This winter several are bringing bills to allow for more involvement if federal aid flows to the state when the Legislature isn't in town.
In the first round of CARES money that funded a renter and mortgage assistance program from May to December 2020, the state awarded about $8.4 million to roughly 2,500 applicants. About 35% of those who received assistance were homeowners and the rest were renters.
GOP lawmakers cited that $8.4 million figure when trimming the initial $200 million last month, questioning if there was a need for the full amount and saying the state Department of Commerce, who administers the rental aid program, could come back and advocate for more. The $17 million was included in a supplemental funding bill that's passed the Legislature and has been transmitted to the governor.
On Monday, Cheryl Cohen, the Housing Division administrator for the Commerce department, said the agency estimates about 7,000-8,000 people will apply for aid under this round of funding approved by Congress in December. The average award is projected to be $5,600. That would include $1,200 for rent and $200 for utilities for four months. That’s how the $44 million was reached.
Cohen spoke to a joint meeting of two budget subcommittees that deal with general government agencies and the state Department of Public Health and Human Services. The same committee also heard a request Monday from the state Department of Labor and Industry to reinstate $5 million in federal aid for the unemployment program that was pulled back in the same manner as the rental aid last month.
Neither committee took any action Monday, but they both are expected to finalize their work setting the budgets for the agencies they oversee this week.
Cheryl said a recent study showed about 10,000 Montanans would be at risk of losing their homes if a federal eviction moratorium, now set to expire in March 31, were to end.
“Depending on how our economy is going, there may be a greater need out there that we don’t have our hands around yet,” Cohen said.
Rep. Carl Glimm, R-Kila, questioned if demand would be high enough to use the $44 million the department is asking for.
“We’re talking about from now until the end of June, so that’s a period of a couple of months, you’re thinking that you’ll be able to expend significantly more than double the money even though a third of the people that were eligible for last year’s program are now not eligible because they’re homeowners?” Glimm asked.
Cohen said like other states including Wyoming, Montana “unexpectedly received a lower number of applications” because of challenges to inform people about the assistance through press releases, TV and radio ads and public service announcements. Cohen also said people who received the then-$600 supplemental unemployment payments from the federal government may have had their incomes pushed above the threshold to qualify for assistance. Those payments are no longer being made.
Cohen added the department was aiming to streamline the application process for this iteration of the program and also will remove a co-pay component that was required before. Other changes would allow for payments to be made directly to a renter if the landlord or utility company does not respond to multiple outreach attempts.
The new program also has a more broad definition of a "hardship" that qualifies someone, moving from a direct nexus between COVID-19 and the financial hardship to a direct or indirect connection.
Sen. Pat Flowers, a Belgrade Democrat, asked if there would be an “inefficiency” by waiting to see if the $17 million would be spent and then later approving the $44 million.
“I would agree that inefficiency exists. It would also limit our ability to provide continued assistance for households if we are in a situation where we’re subject to additional appropriations,” Cohen said.
Montana has not received the funding for the assistance yet, but those who want information about how to apply can go to EmergencyRentalAssistance.mt.gov.