Almost a year ago, lawmakers in Pennsylvania hashed out a plan to spend billions of dollars on public health, conservation, and housing as a stimulus for COVID-19.
A Spotlight PA examination reveals that since then, grant programs concentrated on violence prevention and the environment are only just beginning. The state has effectively distributed millions of dollars to nursing homes, child care providers, and other recipients.
Pennsylvania received $7.3 billion in pandemic relief funding from the American Rescue Plan Act, which stipulates that any unused funds must be returned to the federal government by a specified deadline. The money came with an expiration date, requiring it to be spent by 2026 and allocated by 2024.
The general fund of the state was utilized for a significant portion of that, as approximately $4.6 billion, the overwhelming majority, was employed to substitute the lost revenue. Based on the information provided to the federal government, by March, the state had expended nearly $5.6 billion of the COVID-19 stimulus funds.
The Pennsylvania Office of Budget has filed a report with the U.S. Treasury, stating that nearly 30 new projects have been spent on this year, with detailed information also provided.
Funding for acid mine drainage includes loan forgiveness for nurses to allocate their federal funds. These cover a range of professions such as healthcare facility staff, long-term care facilities, and other government health services. However, certain programs have been more delayed in distributing the majority or all of their finances, while a few of these initiatives have already distributed their funds.
Typically, the state legislature should allocate the entire $7.3 billion, but if the money is not designated for a specific purpose, it should not be spent.
For example, the House agreed to spend $100 million on mental health services during last year’s budget negotiations, but the Treasury’s report in March does not reflect how the funds should be spent earlier this month.
The state legislature gave $412 million in pandemic relief funds to the governor’s office, and the U.S. Treasury Department’s Budget Office also received a report on how the money was spent.
As per a public records inquiry initiated by Spotlight PA, almost all of the funds, except for $2 million, were utilized for providing bonuses to state employees, offering student loan assistance to nurses, and disbursing numerous grants to medical facilities, cultural organizations, local administrations, and charitable organizations up until March 2023.
Here’s a summary of the current status of Pennsylvania’s stimulus expenditure:
Public health
The remaining projects mentioned in the Budget Office’s report received significantly lower funding.
The second-highest allotment was given to nursing facilities and assisted living facilities, which were granted $282 million.
As per the report from the state, these are the sole programs that have been “finished.” The state’s previous plan also allocated $12 million in grants funded by the federal government to three programs specifically aimed at providing assistance for elder care and nursing homes.
Another dedicated program, the Agency for Higher Education Assistance in Pennsylvania, allows licensed nurses living in Pennsylvania who worked during the COVID-19 pandemic to apply for a relief student loan of up to $7,500 over the course of three years.
According to the U.S. Treasury report, the program had only utilized $3.5 million after one year. The application process concluded in March 2022.
Housing
The Whole-Home Repairs Program, which was funded by the highest-profile stimulus money, received $125 million. This program helps eligible homeowners afford weatherization and repairs to make their houses more energy efficient and livable.
The program is supported by state Sen. Nikil Saval (D., Philadelphia) and provides grants to counties, which then distribute funding, for homeowners with a household income that is below 80% of the median income in the area and landlords who own a maximum of 15 rental units.
“We are informed that the demand is immense in numerous counties,” stated Saval.
The program has only used about half of its total allocation, which amounts to $68 million, as previously reported by PA Spotlight. This includes the participation of three declined counties out of the 67 states.
The recently passed state budget bill in the House includes $200 million for the Whole-Home Repairs Program, which is a state-funded initiative. The Democrats in the House now want to ensure that the program receives continued funding through state resources, even though it was initially funded with federal money.
Programs supported by federal funds, such as initiatives for curbing violence and preventing it, as well as grants aimed at stabilizing child care costs, will persist with $400 million in state tax revenue assigned by Governor Josh Shapiro in his budget plan. The endeavor has garnered his backing for its promotion and expansion.
Revenue replacement
State officials stated in the document submitted to the U.S. Treasury that $4.6 billion was utilized to offset the decrease in revenue within the General Fund and support the delivery of government services. Upon initially obtaining the federal funds in 2021, the state legislature consented to allocating more than 50% of the complete $7.3 billion towards replacing lost revenue.
A budgetary allocation for the remaining $2.7 billion was negotiated as part of the 2022 spending plan.
According to Marquette University political science, it is a widely adopted practice for local governments across the country to utilize ARPA funds in order to compensate for lost revenue, as observed by Professor Philip Rocco’s extensive research.
Rocco stated that the main reason for this practice is the ease with which cash can be incorporated into the budget and allocated to new projects without the need to put replacement funds into revenue.
“There is no need for any additional work apart from simply allocating that money to the state and local budget,” stated Rocco.
Pennsylvania remains the state with the highest percentage of dedicated revenue replacement funds towards spending, even though some states are still deciding how to allocate the money they received from the stimulus, with only six other states having a greater percentage at the end of last year.
Money left to spend
The state reported that over $13.2 million has been allocated to those programs. Four projects, three of which prioritize conservation and involve activities such as mine reclamation and enhancing water quality, have not incurred any expenses.
The grants for the Keystone Tree Fund have already been awarded, and they are used to support the planting and maintenance of public trees. There are two additional rounds of grants available until December 2023, with a maximum of $10 million available for each application. However, the first round of grant applications for mine reclamation ended in April.
According to the Pennsylvania Commission on Crime and Delinquency, which distributes the funds in the form of grants, all of the funds have been committed. The fourth initiative is a $50 million endeavor aimed at addressing gun violence, providing grants to county district attorneys’ offices and local law enforcement agencies to enable them to investigate and bring charges against individuals involved in firearm-related crimes.
The program has not yet disclosed any costs, which is why recipients will spend funds and then request reimbursement from the commission. Twenty-nine police departments and district attorneys’ offices were chosen to participate in the program.
The Philadelphia District Attorney’s Office received the largest grant worth $20 million, which will be used to expand staff-time, hire new employees, and enhance digital surveillance capabilities.
Lawmakers have allocated millions of dollars from the stimulus money for a broad purpose of funding research transfers in the field of biotechnology, beyond just those four projects.
For instance, legislators allocated $100 million for mental well-being last July without specifying its intended use.
Instead, the General Assembly established a commission to hash out a plan, which released its recommendations, including expanding walk-in crisis centers and providing higher pay for behavioral health workers treating substance abuse and mental health disorders.
The passing of a bipartisan bill in early June resulted in the adoption of recommendations by the state House, which would create new funding for crisis stabilization units, walk-in crisis centers, and crisis mobile teams as part of suicide prevention efforts. The bill would also expand public safety programs and provide grants for the development of the behavioral health workforce in the field.
(D., Lehigh) Mike Schlossberg, a representative and advocate for mental health, stated that he supports the bill and believes that the plan has received widespread support for several months now.
The legislation now heads to the state Senate, which is controlled by the Republican party, for its final approval.