1. Necessary expenditures due to the public health emergency… 2. [Expenditures] not accounted for in the budget most recently approved as of March 27, 2020… 3. [Expenditures] incurred during the period that begins March 1, 2020 and ends December 31, 2021. The guidance adds that: “Although a broad range of uses is allowed, revenue replacement is not a permissible use of Fund payments.” Due to the unique structure of tribal government funding sources, these and related restrictions affected tribes more heavily than other governmental entities subject to similar requirements. This is not intended as a criticism of the CARES act, but simply as a point of information regarding the degree to which the impact of the pandemic and associated mitigation efforts on tribal government funding far exceeded the additional support the CARES act provided. When a business closes or its revenue is severely reduced, expenses are cut as well. However, many expenses cannot be completely eliminated. In addition, many, if not most, tribes have made valiant attempts to maintain health insurance and other benefits for furloughed employees and even maintained their regular wages to at least some degree for considerable periods of times out of good will and a desire to have those employees available to be reinstated as soon as operations became possible again. As a result, the reduction in costs was much less than would normally occur and the negative effects of closures and restrictions on tribal government income was a much greater proportion of the full revenue losses at the businesses than would normally be true. The vaunted and effective, if uneven, PPP loan program was shown to be less effective in Indian country than in the rest of the United States in a working paper released by the Federal Reserve Bank of Minneapolis’s Center for Indian Country Development in November of last year. In the paper, the authors found that only approximately 19.7 percent of businesses in tribal areas and Oklahoma Tribal Statistical Areas [OTSA] received PPP loans, versus 21 percent of businesses in the rest of the country. The average loan size in tribal areas other than OTSA was 6.6 percent lower. The average loan size in OTSA was 23.5 percent lower. This information is shown in the graph on the following page. The cumulative impacts of major losses in key economic sectors, losses in sales and use tax revenue, attempts to retain employees or mitigate the effects of furloughs and the increased needs for health and social service supports for tribal members have far outstripped the support that tribes received from federal government relief/stimulus packages thus far. In order to estimate the full dollar impact on tribal budgets, the estimates of percentage losses in various sectors were combined with assumptions of cost savings, tribal government funding by source, known dollar volumes in key segments and our experience in working with over 250 tribes across the U.S. and Canada over the past 30 plus years.
∴ OTHER INDUSTRY SECTORS
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