How PA spent COVID stimulus money

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HARRISBURG — Almost a year ago, Pennsylvania lawmakers hashed out a plan to spend billions in COVID-19 stimulus money on housing, conservation, and public health.

Since then, the state has succeeded in getting millions of dollars out the door to nursing homes, child care providers, and more, a Spotlight PA review shows. Grant programs focused on violence prevention and the environment are just getting underway.

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

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

In a report the Pennsylvania Office of the Budget filed to the U.S. Treasury earlier this year, state officials also detailed how much has been spent on nearly 30 new projects.

Some of these programs have already disbursed 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 has appropriated how all $7.3 billion should be spent generally, but it has not assigned all the money to a specific purpose.

For example, the state House agreed to spend $100 million on mental health services during last year’s budget negotiations, but only passed guidelines on how the funds should be spent earlier this month — meaning the money is not reflected in the March report to the U.S. Treasury.

The Office of Budget’s report to the U.S. Treasury also does not break down how $412 million that the state legislature gave to the governor’s office for discretionary pandemic relief has been spent.

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

Here’s a rundown of where Pennsylvania’s stimulus spending stands:

Revenue replacement

Upon first receiving the federal funds in 2021, the state legislature agreed to spend over half of the total $7.3 billion on revenue replacement. In the document filed with the U.S. Treasury, state officials said $4.6 billion was used “to counteract revenue loss within the General Fund and to aid the provision of government services.”

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

Using stimulus money to replace lost revenue is an extremely common practice, according to Marquette University political science professor Philip Rocco, who has studied how local governments nationwide have used ARPA funds.

Rocco said that the main reason for this practice is ease. Funds put into revenue replacement don’t need to be allocated to new projects. Rather, they can be incorporated into the budget baselines, which makes it easy to get the cash out the door.

“No work has to be done beyond simply putting that money in the state and local budget,” Rocco said.

Still, Pennsylvania is among the states that dedicated the greatest percentage of their funds toward revenue replacement, with 76% of its stimulus spending going toward that category. Though some states are still deciding how to spend their money, at the end of last year only six other states had dedicated a greater percentage of their funds toward revenue replacement.

Public health

The other projects listed in the Office of Budget’s report got far less funding.

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

The state’s plan last year also gave $12 million in federally funded grants to three programs dedicated to supporting elder care and nursing homes. These are the only programs that have been “completed,” according to the state’s report.

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

The application process closed in March 2022. According to the U.S. Treasury report, the program had spent just $3.5 million a year later.

Housing

One of the highest-profile programs funded by the stimulus money was the Whole-Home Repairs Program, which received $125 million. The program helps eligible homeowners afford repairs and weatherization to keep their houses livable and make them more energy efficient.

The program, championed by progressive state Sen. Nikil Saval (D., Philadelphia), doles out funding to counties that in turn make grants available to homeowners and landlords. The grants are restricted to homeowners whose household income is less than 80% of the area’s median income and landlords who have no more than 15 rental units.

“We hear that from county after county, the demand is enormous,” Saval said.

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

The Whole-Home Repairs Program is one of several initially paid for with federal money that state House Democrats now want to keep funding through state resources. Along party lines, the state House recently passed a budget bill that would continue the Whole-Home Repairs Program using $200 million in state revenue.

Gov. Josh Shapiro has expressed his support for supporting and growing the initiative. His budget proposal allocates $400 million in state tax revenue to continue programs funded with federal money, including violence intervention and prevention programming and grants to stabilize child care rates.

Money left to spend

The state reported that no expenditures have been made on four projects, three of which focus on conservation and include mine reclamation and improving water quality. Those programs got over $13.2 million.

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

The fourth project is a $50 million gun violence intervention effort that awards grants to county district attorneys’ offices and local law enforcement agencies so they can investigate and prosecute crimes relating to firearms. According to the Pennsylvania Commission on Crime and Delinquency, which administers the funds in the form of grants, all of the money has been obligated.

Twenty-nine police departments and district attorneys’ offices were selected to participate in the program. Grantees will spend money and then seek reimbursement from the commission, which is why the program has yet to report any expenditures.

The Philadelphia Office of the District Attorney received the biggest grant, worth $20 million, which will be used to expand digital surveillance capabilities and hire new full-time staff.

Beyond those four projects, there’s hundreds of millions in stimulus money that lawmakers appropriated for a broad purpose — from biotechnology research to transfers to existing grant programs — that’s still waiting for action.

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

Instead, the General Assembly established a commission to hash out a plan, which released its recommendations in October. They included expanding walk-in crisis centers and substance abuse disorder treatment, and providing higher pay to behavioral health workers.

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

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

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

“We’ve had talks with the Senate since we started last year. And I think there were some concerns, and we’ll certainly be restarting those talks,” Schlossberg said.

Correction: This piece initially included incorrect information about what is in Gov. Josh Shapiro’s budget proposal regarding the Whole-Homes Repair Program.

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