“Power tends to corrupt, and absolute power corrupts absolutely” – Lord Acton.

Former Chicago Mayor Rahm Emanuel is known for saying, “You never want a serious crisis to go to waste. And what I mean by that, it’s an opportunity to do things you think you could not do before.” As President Joe Biden signs the $1.9 trillion COVID-19 relief bill, the $350 billion in direct grants to state, local, and tribal governments should not lead us to assume that the money will be effectively allocated. For many states, the federal government’s COVID-19 relief grants will be an opportunity for states to be just as reckless as the federal government. According to a recent study by the Alabama Policy Institute, for example, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, if Alabama’s CARES spending gives us a window into how states behave when flooded with cash, local residents may not see the relief promised by the Biden administration.

According to the study – titled “Alabama’s Use of CARES Act Funds: Grow Government or Help All Alabamians?” – the state misallocated more than half of the money given to the state. After the state received $1.9 billion from the federal government, like lions and hyenas at an animal kill, state politicians began to fight over the bounty. Both Gov. Kay Ivey and the legislature initially had plans to spend the money. However, the legislature hardly convened for multiple months during the pandemic. When they did meet, a proposal came out including hundreds of millions of dollars of the relief money for capital renovations and a new state house building. What did that have to do with the pandemic? The legislature eventually sent Gov. Ivey a better proposal, giving her control over a portion of the funds. In a move that undermines the concept of federalism, state legislators handed virtually all authority to determine how the money would be allocated to the governor and unaccountable, unelected state government agency bureaucrats.

As noted in the study, “much of the money has been used to grow government, not to help citizens and businesses within the state that have faced hardships as a result of the pandemic.” Only 23.7% of the funds went to the private sector, mostly toward grants where government bureaucrats decide who wins and who loses. Sadly, these grants were poorly publicized, not given to those most in need, and not large enough to make too much of a difference. (Maximum grants were $15,000.) Additionally, 29.5% ($389 million) reimbursed state and local governments. The legislature was reimbursed over $985,000 for equipment purchases, including a tablet system for socially distanced voting, even though officials only met for two weeks from the beginning of the pandemic to January 2021. Approximately $300 million was transferred to the state’s Unemployment Compensation Trust Fund. Again, what does that have to do with the pandemic? Overall, the proportion of funds used to “reimburse state government” rose to 52% ($689.7 million). That is, as the study rightly concludes, “over half of the money has thus far been used to support government, rather than citizens.” Never allow a serious crisis to waste the opportunity for more taxpayer money to balloon the scope of government.

It seems that Alabama failed the men and women of Alabama who needed the money the most. On March 1, 2020, Alabama’s unemployment rate was only 3.5%. A few weeks later on March 27, 2020, Gov. Ivey ordered what she determined to be non-essential businesses to close. By the end of April, unemployment rose to 13.8%, a nearly 300% increase, according to the study. Instead of the state using federal money to help taxpayers, the funds were used for government officials and bureaucrats to help themselves with little to no legislative input. In the final analysis, we see that we are not necessarily better off when power is decentralized and given over to the states, only for states to turn around and behave like the federal government.