How Pa. has (and hasn’t) spent billions of COVID-19 stimulus dollars

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Story by Spotlight PA’s Kate Huangpu and Spotlight PA’s Stephen Caruso

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HARRISBURG Nearly a year ago, lawmakers in Pennsylvania hatched a plan to spend billions in COVID-19 stimulus funds on housing, conservation and public health.

Since then, the state has managed to funnel millions of dollars to nursing homes, child care providers, and more, as a Spotlight PA review shows. Grant programs focused on violence prevention and the environment are just getting started.

Pennsylvania received $7.3 billion in state and local pandemic relief funds from the American Rescue Plan Act. This money came with an expiration date: funds must be allocated by 2024 and spent by 2026. Any funds that remain unused by this deadline will be returned to the federal government.

The state had spent nearly $5.6 billion in COVID-19 stimulus funds as of March, according to information submitted to the federal government. The vast majority, about $4.6 billion, was used to replace lost revenue; much of this sum went to the state’s general fund.

In a report the Pennsylvania Budget Office filed with the US Treasury earlier this year, state officials also detailed the amount spent on nearly 30 new projects.

Some of these programs have already paid out all or most of their funds and include grants for hospital workers, nursing homes and other public health services. But others have been slower to distribute their federal money. These run the gamut, from student loan relief for nurses to grants for acid mine drainage.

The state legislature appropriated how the $7.3 billion should be spent generally, but it didn’t earmark all the money for a specific purpose.

For example, the State House agreed to spend $100 million on mental health services during budget negotiations last year, but only adopted guidelines on how the funds should be spent at the start. of the month, which means the money is not reflected in the March report to the US Treasury.

The report from the Office of Budgets to the US Treasury also does not detail how the $412 million the state legislature gave the governor’s office for discretionary pandemic aid was spent.

By March 2023, all but $2 million had been spent on bonuses for state employees, student loan relief for nurses, and hundreds of grants to medical centers, cultural institutions, local governments, and communities. charities, according to an open records request filed by Spotlight PA.

Here’s a look at the state of Pennsylvania’s stimulus spending:

Income Replacement

When federal funds were first received in 2021, the state legislature agreed to spend more than half of the total $7.3 billion in revenue replacement. In the document filed with the US Treasury, state officials said $4.6 billion was used to counter loss of revenue in the General Fund and to help deliver government services.

A spending plan for the remaining $2.7 billion has been negotiated as part of the 2022 budget.

Using stimulus funds to replace lost revenue is an extremely common practice, according to Philip Rocco, a professor of political science at Marquette University, who has studied how local governments across the country have used ARPA funds.

Rocco said the main reason for this practice is ease. Funds invested in income replacement do not need to be allocated to new projects. Instead, they can be incorporated into budget baselines, making it easier to disburse the money.

No work needs to be done beyond just putting that money into the state and local budget, Rocco said.

Still, Pennsylvania is among the states that have dedicated the largest percentage of their funds to income replacement, with 76% of its stimulus spending going to that category. Although some states still decide how to spend their money, as of the end of last year, only six other states had dedicated a higher percentage of their funds to income replacement.

Public health

The other projects listed in the Office of Budgets report received significantly less funding.

The second-highest allocation went to nursing facilities and personal care homes, which received $282 million.

Last year, the states plan also awarded $12 million in federally funded grants to three programs dedicated to supporting senior care and nursing homes. These are the only programs that have been completed, according to the states report.

Another program dedicated $55 million to student loan relief for nurses. Registered nurses living in Pennsylvania who have worked during the COVID-19 pandemic have applied to the Pennsylvania Higher Education Assistance Agency for up to $7,500 over three years to reduce their student loan debt.

The application process ended in March 2022. According to the US Treasury report, the program had spent only $3.5 million a year later.

Accommodation

One of the most high-profile programs funded by the stimulus funds was the whole-home repair program, which received $125 million. The program helps eligible homeowners pay for repairs and weatherization to keep their home livable and more energy efficient.

The program, championed by progressive Sen. Nikil Saval (D., Philadelphia), distributes funds to counties which, in turn, provide grants to homeowners and landlords. Subsidies are reserved for landlords whose household income is less than 80% of the area’s median income and for landlords who have no more than 15 rental units.

We hear that from county to county the demand is huge, said Saval.

The program has so far used just under $68 million of its funding, about half of its total allocation. As Spotlight PA previously reported, three of the states’ 67 counties declined to participate.

The whole-house repair program is one of many originally paid for with federal money that Democratic Gov. Josh Shapiro now wants to continue funding through state resources. In Shapiros’ budget proposal this year, he suggested continuing the whole-house repair program using $200 million in state revenue.

In total, the governors’ proposal allocates $400 in state tax revenue to continue these programs, which also include violence intervention and prevention programs and grants to stabilize child care rates.

The money is left to spend

The state said no spending was made on four projects, three of which focus on conservation and include mine rehabilitation and water quality improvement. These programs received more than $13.2 million.

The first round of mine reclamation grant applications closed in April, but two more rounds are open through December 2023, with up to $10 million available for a single application. Grants from the Keystone Tree Fund, intended for the planting and management of public trees, have already been awarded.

The fourth project is a $50 million gun violence response effort that provides grants to county attorneys’ offices and local law enforcement agencies so they can investigate and prosecute crimes related to fire arms. According to the Pennsylvania Commission on Crime and Delinquency, which administers the grant funds, all of the money has been committed.

Twenty-nine police departments and district attorneys’ offices were selected to participate in the program. Recipients will spend money and then request reimbursement from the commission, which is why the program has not yet reported any expenses.

The Philadelphia district attorney’s office received the largest grant, worth $20 million, which will be used to expand digital surveillance capabilities and hire new full-time staff.

Beyond those four projects, there are hundreds of millions of stimulus money that lawmakers have appropriated for a broad purpose ranging from biotech research to transfers to existing grant programs still waiting to be made. implemented.

For example, lawmakers earmarked $100 million for mental health last July without earmarking it for a specific purpose.

Instead, the General Assembly created a commission to develop a plan, which published its recommendations in October. They included expanding walk-in crisis centers and treatment for substance abuse disorders, and providing higher pay for behavioral health workers.

The State House adopted those recommendations in a bipartisan vote in early June, passing a bill that would provide behavioral health workforce development grants and expand public safety programs. . The measure would also create new funds for mobile crisis teams, walk-in crisis centers and crisis stabilization units as part of suicide prevention efforts.

The plan has broad support, frankly as it should, said the bill’s sponsor and mental health advocate, State Rep. Mike Schlossberg (D., Lehigh). I wish we had gotten this money months ago.

The bill is now going to the Republican-controlled state Senate for final approval.

We have had talks with the Senate since we started last year. And I think there were concerns that those talks should definitely be restarted, Schlossberg said.

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