Officials urge using state’s aid to cover one-time costs

Marc Levy
The Associated Press

HARRISBURG — Pennsylvania state government is expected to receive more than $7 billion from the $1.9 trillion COVID-19 rescue package making its way through Congress, or almost one-fifth of its operating costs this year, with some warning that the one-time aid should be used only for one-time costs.

Many across state government were still trying to determine Tuesday exactly what sort of restrictions are on the money and suggested that they may not know for certain for days after the bill is signed into law.

The estimated $7.3 billion coming to Pennsylvania state government dwarfs the roughly $2.5 billion deficit projected for state government next year by the Independent Fiscal Office, a legislative agency. Rising demand for long-term nursing care for a growing number of elderly residents is a key cost driver.

“We are eagerly awaiting final passage of this relief package that will provide desperately needed aid for families, businesses, and communities in Pennsylvania,” Gov. Tom Wolf’s office said in a statement. “Following passage, the federal government will provide states with guidance as to how the funding can be used.”

Rep. Jesse Topper, R-Fulton, the vice chair of the House Appropriations Committee, said he and his colleagues are waiting to see precise restrictions that are attached to the money.

However, there is already a feeling across many members of the committee that the estimated $7.3 billion cannot be used to pay for recurring costs in a way that will create a cliff in the future, he said.

“It will go away,” Topper said. “If we’re talking about things that can be used to address a building project that was shelved because of COVID, things that can be used to address infrastructure issues because of COVID, that’s somewhere we can look ,but we can’t be in a position where we are using one-time money to fill recurring holes.”

Wolf plan: Wolf, a Democrat, has proposed wiping out the deficit and boosting public school aid by increasing the state’s personal income tax, but restructuring it so many households see a tax cut and the increase falls on households earning $84,000 or more.

Republican lawmakers have not floated a competing plan to fix the deficit but have shown little to no interest in Wolf’s plan.

It wasn’t immediately clear Tuesday if federal aid could entirely wipe out the state’s projected deficit.

In Monday testimony to the Senate Appropriations Committee, Brenda Warburton of the Independent Fiscal office said the money could be used to pay for specific impacts related to the pandemic, as well as to replace lost revenue from its effects.

Among the restrictions, she said, were that it cannot finance tax cuts or be deposited into pension funds.

The state Department of Revenue could not immediately give an estimate for revenue losses from the effects of the pandemic Tuesday.

Pennsylvania’s tax collections through February, the eighth month of the fiscal year, were slightly behind last year’s collections when adjusting for $1.8 billion that the Department of Revenue said was collected in this fiscal year because of delayed tax-filing deadlines last year.

Aid to local governments: Separately, about $5.7 billion in the bill will go to local governments in Pennsylvania, Warburton said.

U.S. Sen. Bob Casey’s office said Pennsylvania is expected to get another $670 million in emergency assistance for renters, almost $1.3 billion in aid for public transit agencies, $74 million for assistance to homelessness prevention programs and $60 million for programs that aid the elderly.

Another nearly $15 billion is expected in direct payments to households, Casey’s office said.

The bill passed the Senate on Saturday and is scheduled for a House vote this week. President Joe Biden supports it.