How federal pandemic aid helped Texas pay for Greg Abbott’s border mission

Sign up for The Brief, our daily newsletter that keeps readers up to speed on the most essential Texas news.

Texas Gov. Greg Abbott and top state lawmakers shifted around roughly $1 billion in federal coronavirus aid to help pay for their campaign to arrest migrants at the U.S.-Mexico border, exposing gaps in a law meant to bolster the country’s response to the ongoing pandemic.

Relying on the availability of generous federal relief funds, Texas repeatedly in recent months rerouted state money toward its controversial immigration crackdown — all without leaving a massive hole in its budget. But critics say the money would have been put to better use tending to a public health crisis that has killed more than 86,000 people in the state.

The trouble centers on Operation Lone Star, an initiative announced by Abbott last year, when he promised that law enforcement would “start arresting everybody” crossing the U.S.-Mexico border illegally. The campaign, which detains migrants on state trespassing and other charges, relies on extensive and expensive deployments of National Guard troops.

Civil rights groups have widely derided the effort as discriminatory — and some have urged the Biden administration to intervene — calling it a harmful political stunt by a Republican governor who harbors aspirations for the presidency. The operation even has seen Texas send buses of arrested migrants to other cities, including Washington, as Abbott argues his state “should not have to bear the burden” at the border.

But the program also has been expensive, and to help pay for it, Texas has eased the financial burden using money received under a 2020 law meant to help states battle the coronavirus. The state did so through a series of little-noticed “swaps,” in the words of one aide to the governor, who explained the setup to state lawmakers at a hearing in early April.

Essentially, Texas this year transferred money away from its public health and safety agencies and to the governor’s office to administer Operation Lone Star. That cash, totaling nearly $1 billion, was available because the state had backfilled those same public health and safety agencies with stimulus funds it received from Washington, according to interviews with local officials, submissions to the Texas legislature and missives from the governor’s office itself.

The moves appear to be legal under the stimulus law known as the Cares Act, enacted in March 2020. Congress never prohibited states from rejiggering their budgets to take full advantage of a program called the Coronavirus Relief Fund, which aimed to help cities and states pay front-line workers, purchase supplies and tend to other pandemic needs. The approach helped states save their money, which some local governments later reinvested in their efforts to arrest the spread of the virus. Others, like Texas, however, seized on the federal program to redirect their newly found savings for unrelated uses — including immigration enforcement.

Congress initially had considered barring such a practice, prohibiting states from “supplanting” their own spending with generous federal aid, according to an early version of the Cares Act obtained by The Post. But lawmakers opted against including any such restrictions in the bill they sent to then-President Donald Trump that spring. More than two years later, the result has frustrated local advocates, who say that Texas should have spent its savings far differently — helping Americans who were out of work, at risk of losing their homes or facing unprecedented financial constraints.

“At this point, they’re just trying to go back and refinance state payroll expenses to come up with general revenue that can be spent today,” said Eva DeLuna Castro, a program director overseeing fiscal and budget policy for Every Texan, a left-leaning advocacy group that has argued for more health-care and education spending. “When we get federal money and there’s any flexibility attached to it,” she added, “the first instinct is, ‘How can I use this dollar instead of a state tax dollar?’”

Asked about the funding, Renae Eze, a spokeswoman for Abbott, attacked the Biden administration for creating “an ongoing crisis along our southern border and throughout Texas, with millions of illegal immigrants from over 150 countries surging across the border.” Without addressing the funding, she added in a statement: “The President continues turning a blind eye to the suffering of Texans, as his administration dumps migrants in our border communities that are already overwhelmed and overrun by the historic level of illegal crossings.”

The White House did not respond to a request for comment. The Treasury Department said it is reviewing the spending in Texas — as well as every other state — as part of its normal diligence over such stimulus expenses.

For Washington, the windfall that federal lawmakers granted to states over the past two years has proved to be one of its most vexing fiscal challenges in the still-simmering pandemic.

Dating back to the earliest days of the crisis, Congress approved a series of rescue packages that in total set aside about $500 billion for local governments believed to be in financial peril. The money complemented the trillions of dollars in direct housing, education, health-care and nutrition assistance that lawmakers asked states to manage and disburse with record speed.

The wellspring of local aid marked an attempt to stave off a deeper recession, as lawmakers came to fear a repeat of the financial crisis more than a decade ago — when the downturn cleaved deeply into local governments’ revenue, sparking massive layoffs that devastated local economies. Congress imposed few restrictions on how the money could be spent, hoping to give cities, counties and states great flexibility to address needs as they saw fit.

States’ finances proved more stable than some in Washington had anticipated, thanks in part to a historic burst of roughly $6 trillion in total stimulus spending. In the wake of the improvements, some local governments began to eye the federal aid as an enticing pool of cash that could free up scarce budgetary resources and pave the way for long-stalled pet projects, according to an earlier Post analysis of federal data.

Alabama devoted some of its funding toward the construction of a new prison. A Florida town channeled some toward helping to equip a forthcoming golf course. Others refurbished parks and trails, expanded airports and constructed gas pipelines — backfilling projects stalled amid the pandemic downturn even though many were not related to public health. Many of those investments came about after the adoption of the American Rescue Plan in March 2021, which allowed governments to put their cash toward projects stalled as a result of the pandemic.

But every dollar spent this way has meant one fewer dollar available in the event of a worsening public health crisis. Sensing potential trouble, the Biden administration has urged Congress in recent weeks to approve as much as $22.5 billion in new coronavirus aid, hoping to shore up the country’s reserves in the event new variants emerge. Congress has struggled to provide less than half that amount — while state governments continue to shell out sizable sums toward seemingly unrelated causes — leaving some in the nation’s capital alarmed.

Under the first major coronavirus aid package, the Cares Act, Texas received more than $8 billion in direct aid. Like other states, it was required to put that money — awarded on the basis of population — specifically toward new pandemic-related expenses. Texas predominantly tapped its funds to provide excess medical capacity at hospitals, purchase tests and protective equipment and offer hazard pay to front-line workers, according to state data furnished to the federal government.

Error! Filename not specified.

None of the money under the program directly went toward the state’s newly enhanced campaign to find, detain and deport migrants. But state officials in recent months acknowledged that federal covid aid dollars did essentially free up other cash for the immigration crackdown, saving Texas from the need to tap its own reserves to ramp up operations at the border.

Two months after launching Operation Lone Star, the Texas legislature took a critical budgetary step that appeared to ease the cost burden of its new immigration program. Lawmakers in May 2021 approved a supplemental plan to tap $2.4 billion under the federal Coronavirus Relief Fund, which it put to use on salaries for public health and safety employees, according to state budget documents.

That approach returned money to the state’s vast, general pool of funds for use elsewhere. Lawmakers would soon tap that expanded pot in the fall: They approved an emergency spending bill in September 2021 that appropriated roughly $1.8 billion to a slew of agencies that oversee border crossings, state records show.

Most of the money went to Abbott’s office for a wide array of purposes, according to legislative documents, including improvements to local security, border-security grants, the hiring of more border officials and enhanced prosecutions of border-crossing crimes. But Operation Lone Star ultimately would prove even more expensive, requiring the state to continue to rearrange its budget with the help of federal aid. By this January, state officials had to act again: They transferred roughly $480 million from domestic agencies that had been backfilled with Cares Act money, invoking the governor’s special powers under state disaster laws.

The funding situation caught the eye of Texas lawmakers by early April, as they convened to consider Abbott’s program and the state of their border security operations generally. Pointing out that Operation Lone Star is “costing the state taxpayers about $2.5 million a week,” state Sen. Juan “Chuy” Hinojosa (D) questioned one of the governor’s top officials as to “what happens” when the latest tranche of funds runs dry.

Sarah Hicks, an adviser to Abbott on the budget, acknowledged the $480 million transfer and explained the governor’s strategy — an effort to “maximize that use” of federal funds on public health “to the benefit” of the state’s coffers.

“For the agency, it was a dollar for dollar,” Hicks said. “It was just a swap.”

Hicks would go on to fault the federal government for failing to provide direct border assistance to Texas, adding there is a “strong possibility next spring that Congress looks a little bit different” since “elections ultimately matter.”

Until then, though, she said there would be “funds available and salaries to do another $600 million-plus in salary swaps” in the months to come — potentially freeing up even greater sums for border operations.

“I don’t think we’re going to look up in April and say, oh shoot, there’s nothing possible to do here,” Hicks said. She did not respond to a request for comment.

About four weeks later, six Texas agencies put Hicks’s comments into motion. They transferred about $495 million to the governor in late April “to support the deployment of the National Guard” and other border-related operations, according to a letter from Abbott’s office. The missive only said that the transfer had been “fully funded with other sources,” without specifying any, adding that the move “will not affect any agency or program function.”

But a top official on the Legislative Budget Board, a fiscal advisory arm for state lawmakers, confirmed a week later that the governor had additional funds “available to it through the Cares Act” that it ultimately “gave to the agencies for public safety and public health employee salaries.” Testifying at a state House hearing in early May, Katy Fallon-Brown said the decision “freed up general revenue” that the governor’s office took over, putting it to use on its immigration enforcement campaign.

A related presentation, shared with lawmakers, in total details about $4 billion in border security appropriations over the past year. In a subsequent statement, the Legislative Budget Board confirmed that at least $975 million “are related to the general revenue freed up from the application of additional [stimulus] dollars.” Some experts, however, say the amount of federal aid involved reaches into the billions given the extent to which the key Cares Act program had allowed Texas to save money over the past year.

The entire arrangement has troubled civil rights advocates, who have asked the Justice Department in Washington to open an investigation into Operation Lone Star broadly. In a complaint filed last year, the ACLU of Texas has stressed that the crackdown on migrants violated federal civil rights laws. Such a finding would warrant a clawback of some of the state’s coronavirus aid, the group has argued, since federal law prohibits the government from providing help to state agencies engaging in abuse.

Kate Huddleston, a staff attorney at ACLU of Texas, said this week that the Biden administration has not provided a “substantive update” on the request. But she lamented the use of pandemic relief dollars as one of the problems in the state’s controversial immigration campaign.

“Gov. Abbott has poured money into Operation Lone Star that could be going toward literally anything actually productive for the state,” Huddleston said.