EDITORIAL: Federal formula for sending virus aid to states is out of whack

Indiana has the 12th-highest COVID-19 death rate in the United States, but its share of federal money intended to help states battle the pandemic isn’t nearly so high.

And that’s a problem. Not just for Indiana but for every state fighting to keep from being overwhelmed by the virus but receiving a disproportionately small share of federal funding with which to do it.

Indiana is projected to receive $2.3 billion of the $150 billion Congress set aside to help states weather the crisis.

The money can be used only for virus-related costs, not already-budgeted expenses, even if (or, let’s face it, when) tax revenue falls short because of the closures prompted by the pandemic.

But despite the money’s intended purpose, the distribution is not based on the seriousness or the breadth of the pandemic in a state. Instead, Congress established a distribution formula based on population, with one big exception: No state can receive less than $1.25 billion.

That means states with fewer people—and generally fewer COVID-19 cases—are receiving a bigger relative share of the federal money than states with larger populations and more intense outbreaks.

The differences are not insignificant. They are outrageous.

Consider that Wyoming, with fewer than 600 confirmed cases of the virus, will receive $1.25 billion to help it cover pandemic-related costs. That equates to $2.1 million per positive test or $179 million per COVID-19 death, according to an analysis by the Associated Press.

Now consider New York, which has more than 316,000 confirmed cases and will receive $7.5 billion. That equates to less than $24,000 per confirmed case and just more than $300,000 per death.

At the time of the AP analysis, Indiana had nearly 20,000 confirmed cases. Its $2.3 billion allotment equaled $131,000 per positive case and $2.3 million per virus-related death.

So Wyoming will receive roughly 16 times as much per confirmed case as Indiana.

And it’s not just Wyoming. The AP analysis found that Alaska, Hawaii, Maine, Montana, North Dakota, Vermont and West Virginia will all receive more than $1 million per positive COVID-19 test.

Where is the logic?

Consider, too, that Wyoming’s $1.2 billion allocation equals about 80% of that state’s annual operating budget. Indiana’s $2.3 billion allocation represents 13% of its budget.

Lawmakers from states that are receiving larger relative shares say their communities have had to shut down, even with fewer cases. And representatives of Hawaii say its tourism industry has been devastated.

But as the AP points out, politics drove this ridiculous formula, not some recognition of the needs in each state. In the Senate, every state has two representatives, regardless of size.

New Jersey Sen. Robert Menendez acknowledged the problem in talking to the AP, when he said, “We need to get 60 votes in the Senate.”

That is politics at its worst—and it’s the places already suffering from the pandemic that will suffer more as a result.•

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