Candidates talk federal COVID relief money
SUBLETTE COUNTY – The Republican primaries are expected to determine Wyoming’s political future, and with Election Day closing in, the rhetoric is heating up.
An article published by WyoFile on Aug. 2 highlighted the use of federal COVID-19 relief funds to assist small businesses owned by Republican lawmakers and candidates despite the GOP’s fiscally conservative, anti-Washington spending platform.
Wyofile focused specifically on recently published records from the federal Paycheck Protection Program.
On Aug. 8, Cowboy State Daily zeroed in on the race for State House District 20, detailing Paycheck Protection Program (PPP) loans received by SOS Well Services, LLC. Mike Schmid, SOS’s majority owner, is vying against Bill Winney to unseat incumbent Albert Sommers in the Wyoming Legislature.
In light of the state press centered on federal pandemic relief money, the Roundup reached out to all three candidates to obtain their views on the complex topic.
The Centers for Disease Control confirmed the first U.S. case of COVID-19 on Jan. 20, 2020. The disease spread rapidly. Federal, state and local governments scrambled to respond to the unparalleled health crisis.
President Donald Trump issued a nationwide state of emergency on March 13. Wyoming Gov. Mark Gordon followed suit, signing executive orders that same day declaring a “public health emergency” in the state.
On March 27, Trump affixed his signature to the Coronavirus Aid, Relief and Economic Security, or CARES, Act, releasing approximately $2 trillion in federal aid “to provide emergency assistance and healthcare response for individuals, families and businesses affected by the 2020 coronavirus pandemic.”
A multitude of federal agencies administered the money. The U.S. Small Business Administration took charge of the PPP that offered loans to “provide a direct incentive for small businesses to keep their workers on payroll.”
Qualifying businesses were able to apply for loan forgiveness under the PPP.
Wyoming Newspapers, Inc., the company publishing both the Roundup and Examiner, received a $327,000 PPP loan for 93 employees. Wyoming Newspapers’ parent company, News Media Corporation in Illinois, was granted a $329,300 PPP loan with 366 employees reported. Both loans were forgiven.
The Biden administration expanded COVID-19 relief with the American Rescue Plan Act (ARPA) on March 11, 2021, pouring billions into the national economy.
The Wyoming Legislature passed Senate File 66 during the 2022 spring session, establishing parameters for ARPA funds to be spent on local and state infrastructure projects by a large majority.
PPP loans to save jobs
Schmid, majority owner, president and CEO of SOS Well Services, LLC, in LaBarge confirmed the company received approximately $1.5 in PPP loans, the full amount forgiven.
Throughout its 40-year history, SOS “never sought the benefit of government programs” until it accepted PPP loans in 2020 and 2021 as “a necessary step to keep the business operational and to make payroll,” Schmid said.
SOS employs around 55 people “who contribute substantially to the financial stability of our communities in (House District) 20,” Schmid wrote to the Roundup.
According to Schmid, “government mandated shutdowns” in the wake of the pandemic “resulted in a 45-percent decline in revenue” for SOS. The drop affected the business’s bottom line and threatened jobs of “treasured employees,” Schmid added.
Schmid described the process of telling employees layoffs appeared inevitable as “gut wrenching.” Many single employees or couples without children stepped up and “selflessly” offered their job to families with children.
“Without the ability to generate income, we could not continue to pay salaries, health insurance and employee-based taxes,” he stated. “PPP funds directly saved jobs in our company and the money received went specifically for that purpose.”
SOS’s payroll totaled $36 million over the past 10 years, Schmid replied, and PPP loans allowed SOS to retain employees who “continue to serve a vital function for our nation and local economy by facilitating energy production and keeping an annual payroll of $3.6 million in circulation.”
Schmid argued that obtaining PPP loans were consistent with his conservative values.
“The devastation caused to business across our nation and state was not of their making,” he explained. “Closures were required by the government, and a business cannot generate revenue unless the doors are open. Most businesses, including SOS, still lost money due to the pandemic. The PPP funds helped right a wrong to some extent, but not completely.”
Revitalizing the state – CARES and ARPA
Rep. Sommers joined a majority of his colleagues in bipartisan support of Wyoming Senate File 66. The bill appropriated federal ARPA funds to “help states recover from the effects of the pandemic,” Sommers told the Roundup.
Sommers Ranch, LLC, and Sommers Herefords, LLC, did not receive PPP loans or COVID-19 livestock producer relief dollars, Sommers said. Both companies received federal COVID-19 agriculture relief money “used for the general operation of the ranch.”
The CARES Act was a “necessary response to the economic repercussions of the pandemic,” Sommers wrote.
COVID-19 and the “government response” brought the state’s economy to a halt, he added. Small businesses, from hairdressers to daycares, were forced to close, Sommers said. Oil traded in negatively on markets early in the pandemic, “crippling Wyoming’s energy dependent economy.”
Despite “problems with implementation” and administration of COVID-19 relief money, “local businesses needed relief,” Sommers continued.
“I believe government supporting business in a time of unprecedented crisis was essential, regardless of who created the crisis,” he added.
In May 2020, Wyoming’s Consensus Revenue Estimating Group projected a billion-dollar deficit for the state. Sommers sat on the appropriations committee through the crisis as the legislature cut more than $900 million in general fund money to balance the budget.
“I call that fiscal conservatism,” he said.
In 2022, ARPA dollars provided the state additional relief.
The legislature “looked at how to strategically and wisely use the approximately $1.068-billion, one-time ARPA dollars” to “meet current needs” and “invest in Wyoming’s future,” Sommers explained.
The funds went to county and town entities to support health care, substance abuse programs, suicide prevention and elder care, Sommers said.
“Without the federal money provided to Wyoming’s highways, airports, wildlife, schools, nursing homes, hospitals and the disadvantaged, our state would have gravel roads for highways, not a single nursing home, few people and no economy,” Sommers wrote.
Federal relief also allowed the state to place approximately $200 million into investment-earning permanent savings for the future, Sommers added, “the fiscally conservative thing to do.”
Sommers cautioned diligence while researching the strings attached to federal dollars and emphasized the right for states to say no to Washington. In the case of ARPA money, however, if Wyoming refused, the money would “likely have been distributed to other states,” he said.
While CARES and ARPA were essential to America’s economic recovery, Sommers said the “subsequent (federal) infrastructure bill” and “another round of new federal funding” were contrary to fiscal conservatism.
“Too much federal money has overheated the economy, and is responsible for a large portion of the inflation we are seeing,” he said.
A brief final word
Candidate Bill Winney provided a short response to the Roundup’s queries about federal pandemic relief dollars and conservative values. Winney stressed that he had not received any federal COVID-19 relief money earmarked for small businesses or agriculture.
Winney stated COVID-19 funding “did not violate conservative values.”
“Use of COVID money to keep the gears turning through extraordinary times, whether state, county or small business, is important,” he added. “It is a duty of government to have money available for ‘rainy days’ to get people through disastrous times. Wyoming does this through its savings funds. At the federal level, the issue isn’t whether disaster spending occurs, it is that such funds are generated by printing money.”