PA Senate receives plan to spend $6b of new federal funding

Pennsylvania Senate Democrats have unveiled the New Deal for PA – a $6.15 billion investment of federal funds coming to the Commonwealth pursuant to the American Rescue Plan.

The New Deal for PA focuses on Jobs, Opportunity, and Equity, according to a press release, with the following breakdown:

People — $2.470 billion

  • 21st Century Child Care
  • Business Assistance
  • Education/Community Supports
  • Job Training/Workforce Development
  • Utility Assistance

Projects — $2.493 billion

  • Economic Development
  • Infrastructure

Public Health — $1.185 billion

  • Public Health Equity/Vaccine Confidence
  • Rewarding Frontline Worker Service

“These funds give us a unique opportunity to not only plug the holes created by the past year, but to also set us on a trajectory that will prevent such devastation from happening again – particularly as it relates to the disproportionate impact some communities faced,” said Senate Democratic Leader Jay Costa. “We have to move beyond calls to simply ‘reopen’ and focus instead on rebuilding and recovering. Our businesses, workers and families need programs and support systems to get to a new normal.”

By making targeted investments in people, projects, and public health, the legislators say the state can use this once-in-a-lifetime infusion of federal funds into PA to make positive, long-lasting improvements that will lay the foundation to create transformative change across the Commonwealth.

“This plan which creates jobs and opportunity, and prioritizes equity, is the result of a long, difficult year of listening and learning,” Senate Democratic Appropriations Chair Hughes said. “Thousands of Pennsylvanians have taken time during the pandemic to tell us their stories, their challenges and their tragedies. We now have a historic opportunity to apply the lessons learned not just from the virus, but also from the decades of regressive public policy that left so many so vulnerable to it.  In short, this plan puts PA’s people first.”

The legislators say that the proposal uses a data-driven approach to respond to what has been learned during the pandemic.

The caucus looked at the current situation to determine where financial assistance is still necessary to help individuals, families, and small business recover from the devastating impacts of the pandemic, they said. Then, the caucus looked ahead and assessed how to best invest ARP funds to ensure that we come out of the pandemic better than we went in and build resiliency across the commonwealth in preparation for the next crisis.

Finally, the caucus compared its proposal with the U.S. Treasury guidance released on May 10, 2021, to ensure the are on solid footing in using the funds proposed, they said.

Federal guidance on allowable uses of the funds coming to Pennsylvania from the American Rescue Plan’s (“ARP”) State Fiscal Relief Fund was released on May 10, 2021. Pennsylvania will receive approximately $7.3 billion in flexible funding from the State Fiscal Relief Fund.  Senate Democrats believe it is time to begin the conversation on investing these funds so the state can allocate the monies with the FY 2021-2022 budget

The Senate Democrats’ proposal distributes $6.05 billion from the following sources:

  • State Fiscal Relief Fund — $4,797,500,000
  • Capital Projects Fund — $280,000,000
  • ESSER Fund — $505,000,000
  • Emergency Assistance for Nonpublic Schools — $150,000,000
  • Pandemic Response Fund — $25,000,000
  • Other Funds — $55,000,000
  • Local Matching Funds — $335,000,000

Counties and municipalities will receive approximately $6.1 billion from the American Rescue Plan’s Local Fiscal Relief Fund and school districts will receive approximately $4.5 billion from the ESSER Fund. If these local government units take advantage of these programs, state matching funds will average approximately $4 for every $1 of local funding.

Jason Thompson, a spokesperson for Senate President Pro Tempore Jake Corman, R-Centre, told the Pennsylvania Capital-Star the chamber’s majority Republicans want to ensure the funds are allocated “to provide the greatest benefit to all Pennsylvania communities and support our recovery from the pandemic.”

“The final package will most likely look somewhat different than what Senate Democrats proposed, but there are certainly areas of agreement that we can build on as well,” he added.