PACARES
PROVIDING RELIEF FOR WORKING PEOPLE IN A TIME OF CRISIS
Pennsylvania Coronavirus Aid, Relief & Economic Security Act of 2021
“PA CARES 21”
A State-Funded Stimulus Plan to Respond to the Coronavirus Pandemic
Aiming to stimulate Pennsylvania’s economy by providing direct aid to workers, families, small businesses and other vulnerable populations, the Pennsylvania Senate Democratic Caucus announced a bold, innovative $4 billion pandemic relief plan Friday morning.
The Pennsylvania Coronavirus Aid, Relief & Economic Security Act of 2021 (PA CARES 21) Plan would fund previously existing aid programs and establish new programs to help struggling Pennsylvanians and struggling areas of the commonwealth’s economy.
“Folks have not seen pandemic-specific relief from the state or federal government since last spring, yet thousands remain unemployed, underemployed and struggle with their housing and utility bills. This cannot go on any longer,” said Senate Democratic Leader Jay Costa. “There are immediate needs in communities across this state that must be addressed immediately. We are in the middle of another surge in COVID cases, hospitalizations and deaths. We need help to recover, personally and financially; the state must play an active role in that recovery and that is what our plan today does.”
Highlights
Frequently Asked Questions
What are we announcing?
PA CARES 21 authorizes the commonwealth to issue $4 billion in emergency debt to (1) recapitalize programs previously funded with federal CARES funds pursuant to Acts 2A, 24 and 30 of 2020 and (2) establish new programs that provide targeted assistance to struggling Pennsylvanians and struggling sectors of the Pennsylvania economy.
Why are we announcing this proposal now?
Time is of the essence. COVID-19 is surging in Pennsylvania with cases rising daily. People continue to get sick, workers continue to lose their jobs, businesses continue to close, and our educational system continues to be disrupted. Pennsylvania and Pennsylvanians are suffering and need support now.
The 2021-2022 legislative session does not officially begin until January 5, 2021. How do you reconcile that fact with your belief that “time is of the essence.”
Wouldn’t a new federal stimulus package be preferable to a state-solution?
The recently enacted FY 2020-21 General Fund Budget was balanced in part by using $1.3B in federal CARES funds despite the fact those funds were intended to be used to help Pennsylvanians mitigate the impact of the pandemic. Was that decisions wrong? If so, why did some Senate Democrats support it?
What if the federal government reaches agreement on a new federal plan in the next few weeks? Do you believe this plan is still necessary?
Q: Do you think the Republican-controlled General Assembly will entertain a $4 billion bond issue considering their historic aversion to borrowing?
Besides the federal government, the Commonwealth of Pennsylvania is the only entity that has the capacity to provide substantial resources to help our citizens. One of the core functions of government is to protect the health, safety and welfare of its citizens. If we can’t come together at this moment in the face of this unprecedented crisis and harness the power of state government to provide the financial relief that our citizens are desperately crying out for, then we have failed not only ourselves but those who we were sent to Harrisburg to represent.
How much does your proposal spend? What areas do you focus on?
Unemployment Compensation Protection $1.069 billion
Business Assistance $800 million
Local Government Assistance $595 million
Education (Pre-K thru Higher Ed) $411 million
DHS Programs $318.4 million
Transportation $180.4 million
Hazard Pay $135 million
Hospital Assistance $100 million
Housing Assistance $100 million
Utility Assistance $100 million
Child Care $75 million
Food Security $50 million
Public Safety $25 million
PPE/Vaccine Issues $25 million
Mental Health Programs $15 million
What is included under each of your categories?
Unemployment Compensation Protection: Covers 509,000 individuals currently collecting federal PEUC and PUA benefits that are set to expire on December 26 unless extended by Congress. Claimants would receive $350/wk. for six weeks.
Business Assistance: Targeted funding for bars/restaurants/hospitality industry; additional funding for the current DCED/CDFI program for Main St. and Historically Disadvantaged Businesses; targeted funding for barbers/salons/personal care businesses, nonprofit organizations, and tourism/arts and culture organizations.
Local Government Assistance: Funds for counties and municipalities that have seen reduced local revenues due to the pandemic.
Education: Additional funding to address the needs of the Pre-k thru 12 and Higher Education system.
DHS Programs: A second round of funding for certain DHS programs funded in Act 2A of 2020. Funding would be at 40% of the Act 2A amount.
Transportation Systems: New funding for mass transit and commonwealth airports based on a percentage of that received from the federal government under the CARES Act.
Hazard Pay: Additional funding for hazard pay for frontline workers. Over 100,000 frontline workers could benefit.
Hospital Assistance: Funding for hospitals that serve our Medicaid population.
Housing: New funds for housing and rental assistance Utility Assistance: Funds to help individuals in arrears on utility payments
Child Care: Additional funding for child-care providers to continue operating.
Food Security: Additional funding for food banks, anti-hunger programs, and the agriculture industry.
Public Safety: Additional funding for EMS and Volunteer Fire Companies that have been impacted by the pandemic.
PPE/Vaccine Issues: Funds to create a commonwealth PPE stockpile and to cover costs associated with uninsured individuals receiving the vaccine.
Mental Health Programs: Funding to ensure adequate programs exist to address the mental health impacts the pandemic is having on Pennsylvanians.
How did you determine priorities for funding?
Pennsylvanians continue to bear the brunt of the pandemic. With federal CARES funds, we focused on getting money into people’s pockets, protecting our health care system and frontline workers, ensuring the viability of our education system, and assisting our small businesses. We continue that commitment with PA CARES 21, while expanding to areas that have shown a real need for assistance.
Will you use existing programs or create new programs to drive out the funds?
Where appropriate, this proposal utilizes the programs created under Act 24 of 2020 to drive out the funds. If proposed funding does not fit into an existing program (e.g., utility assistance), a new program will be created.
Additionally, we support fixing programs created by Act 24 (e.g., PHFA’s rental assistance program) as requested by stakeholders to maximize program effectiveness.
What form will the financial assistance take?
The funds will be allocated as grants to entities that are providing the goods and services we need. Funds will not need to be repaid.
Are there restrictions on the use of these funds like the federal CARES Act.
PA CARES 21 funds are designed to be flexible. However, they must be used for costs incurred due to the COVID-19 pandemic. Unlike federal CARES funds, counties and municipalities may use these funds to replace local revenue lost due to the pandemic.
What are the specifics of the bond issue?
Amount: $4,000,000,000
Issuer: Commonwealth Financing Authority
Proposed Term: 25 years
Estimated Debt Service: $190,000,000/yr.
How did you settle on $4 billion?
This is the approximate amount the commonwealth received under the federal CARES Act. We wanted to match that amount to provide substantial relief to Pennsylvanians.
How will debt service be paid?
Annual debt service can be paid from any of the following sources:
- Liquor Control Board revenues
- Gaming revenues
- Dedication of Personal Income Tax or Sales Tax revenues
- The recently enacted budget included a one-time transfer of $200M in PIT revenue to the Property Tax Relief Fund. Beginning next year, that same amount can easily be shifted to debt service payments for this program
Does the bond issuance require voter approval via referendum?
No. We do not believe a referendum is required based on the purpose and structure of the proposed bond issue.
PA CARES
PROVIDING RELIEF FOR WORKING PEOPLE IN A TIME OF CRISIS
Round 2 • October 16
Today, Senate Democrats are announcing our caucus priorities for spending the remaining $1.3 billion of Pennsylvania’s federal CARES funding. This announcement follows the release of our original PA CARES plan in April of this year. That plan was largely included in the first round of funding passed by the General Assembly and signed by Governor Wolf in May. (Act 2A and Act 24 of 2020)
Highlights
Frequently Asked Questions
What are we announcing?
Why wasn’t all the money spent in May?
In May, the Senate, House of Representatives, and Governor Wolf worked together to drive out more $2.6 billion in federal CARES funds to help Pennsylvanians deal with the impacts of the coronavirus.
Acting quickly, we provided a lifeline to families, small businesses, counties, and others struggling through the pandemic. Our work reflected the best of bipartisanship as we came together to produce results for Pennsylvanians.
At that time, we also made the collective decision to retain some of the CARES funds (approximately $1.3 billion) to address unanticipated costs that could arise through the summer and fall. This was the right decision in May. However, circumstances have changed.
Why now? What circumstances have changed to prompt this announcement?
First, Pennsylvanians can’t wait any longer for the financial assistance provided through the CARES Act. People continue to suffer. Businesses continue to close. Pennsylvania’s COVID case numbers are rising again. The end of the pandemic is nowhere in sight. We need to act now.
Second, the Trump Administration and Mitch McConnell have failed Pennsylvania and Pennsylvanians. Today marks 155 days since House Democrats passed the HEROES Act, which provides close to $1 trillion to assist state and local governments. Trump and McConnell have done nothing but offer inadequate half-measures that effectively punish state and local governments for the Trump Administration’s inept response to the pandemic.
Third, some Republicans in Washington oppose more federal funding because they claim state and local governments have not spent their CARES funding. Refusing to support more federal funding for Pennsylvania because we used a bipartisan approach and were cautious in spending our CARES funds is both ridiculous and disgraceful.
However, if that argument continues to hold sway and we are being punished for being both bipartisan and prudent, then Pennsylvania needs to spend the remaining funds now so Washington has no excuse for not doing its job.
What did we learn from the first round of CARES funding?
We learned a lot.
First, the financial pain people are suffering was crystallized. We see this from the sheer volume of requests received in programs created with CARES dollars:
- $225 million small/historically disadvantaged business program received over $850 million in funding requests;
- $50 million essential worker hazard pay program received over $900 million in requests;
- $25 million cultural and museum grant program received over $50 million in requests.
Second, more pain is on the horizon. Thousands of Pennsylvanians currently protected by moratoriums on evictions, foreclosures, and utility shutoffs due to loss of work face dire consequences when the moratoriums are lifted if there is no safety net in place.
Third, Act 2A and Act 24 left out many in need. Our small, historically disadvantaged businesses and the restaurant, tavern and hospitality industry have been devastated. Barbers, hair salons, personal care businesses, nonprofits and arts and culture organizations have closed or are on the verge of shutting their doors for good. Childcare providers and our emergency medical services community are suffering. The list is large; the need is great.
How much does your proposal spend? What areas do you focus on?
Our proposal allocates approximately $1.3 billion from the Coronavirus Relief Fund in the following areas:
Business Assistance $575 million
Child Care $75 million
Food Security $15 million
General Fund Reimbursement $150 million
Hazard Pay $100 million
Higher Education $141 million
Hospital Assistance $125 million
Public Safety $25 million
Utility Assistance $125 million
How did you determine priorities for funding?
Pennsylvanians continue to bear the brunt of the pandemic. In Round 1 we focused on getting money into people’s pockets, protecting our health care system and frontline workers, ensuring the viability of our education system, and assisting our small businesses. We continue that commitment in Round 2 while expanding to areas that have shown a real need for assistance.
What is included under each of your categories?
Business Assistance: Targeted funding for bars/restaurants/hospitality industry; additional funding for the current DCED/CDFI program for Main St. and Historically Disadvantaged Businesses; targeted funding for barbers/salons/personal care businesses, nonprofit organizations, and tourism/arts and culture organizations.
Child Care: Additional funding for child-care providers to continue operating.
Food Security: Additional funding for food banks and anti-hunger programs.
General Fund Reimbursements: Funding for Covid-19-related costs to free up General Fund dollars, which will be used to replace lost gaming revenues used for school district property tax relief
Hazard Pay: Additional funding for hazard pay for frontline workers
Higher Education: Funding for higher education institutions for COVID-related expenses
Hospital Assistance: Funding for hospitals that serve our Medicaid population.
Public Safety: Additional funding for EMS and Volunteer Fire Companies that have been impacted by the pandemic.
Will you use existing programs or create new programs to drive out the funds?
For the most part, this proposal utilizes the programs created under Act 24 to drive out the funds. If proposed funding does not fit into an existing program (e.g., utility assistance), a new program will be created.
Additionally, we support fixing programs created by Act 24 (e.g., PHFA’s rental assistance program) as requested by stakeholders to maximize program effectiveness.
What form will the financial assistance take?
Like Round 1, the funds will be allocated as grants to entities that are providing the goods and services we need. Funds will not need to be repaid.
Is this remaining $1.3 billion enough to keep Pennsylvania and Pennsylvanians afloat?
No. This money is not nearly enough. It will help some people only temporarily, and it most cases not fully. It is insufficient to address big issues like K-12 education and local government financial struggles. We need more help from the federal government. State and local governments cannot respond to the pandemic and the needs of our citizens on our own. The financial challenges are too large and state and local resources too limited.
Do you believe federal stimulus talks are dead?
We don’t know but we can’t wait any longer for them to act. If another round of stimulus funding comes at some point in the future, we will address it.
Have you discussed these priorities with the Wolf Administration or the other caucuses?
We’ve had preliminary conversations at the senior staff level about allocating the remaining funds. Some bills have moved out of the Senate Appropriations Committee. Conversations are ongoing.
We don’t consider this a partisan issue. The Senate, the House, and the Governor must come together like we did in May and again produce results for the people of Pennsylvania. Time is of the essence.
Round 1 • April 29
The Pennsylvania CARES Plan offers a set of spending priorities to best use the $3.9 billion in federal CARES ACT funding the commonwealth is set to receive. A major focus of the PA CARES Plan is funding initiatives that help individuals and families, such as housing assistance programs, student debt relief, veterans’ assistance, utility assistance, and food bank support.
Other aspects of the proposal include allocating additional assistance to frontline workers, funding for the health care industry and its workers, small business grants, and much-needed support communities disparately impacted by the COVID-19 pandemic. School districts and local governments would also receive support to help offset pandemic-related expenses.
The Senate Democrats’ response to the COVID-19 pandemic remains focused on helping working people, families and Pennsylvania’s small businesses. Members of the caucus have a number of proposals to address COVID-19 relief and recovery efforts in Pennsylvania.
Highlights
Frequently Asked Questions
What are we announcing?
What are the restrictions on the use of CARES Act Fund?
Can Coronavirus Relief Fund dollars be used to close the looming budget deficit?
How much does your proposal spend? What areas do you focus on?
Our proposal allocates approximately $3.9 billion from the Coronavirus Relief Fund over the following 10 areas:
Individuals/Families $1.1 billion
School Districts/Local Government $750 million
Health Care, First Responder & Frontline Workers $650 million
Small Business $425 million
Historically Disadvantaged Communities $300 million
Higher Education $250 million
Child Care/Early Education $150 million
State Government Infrastructure $100 million
Agriculture $25 million
Election Security $25 million
The proposal also allocates $100 million from education-related funds for K-12 schools for expenses related to shifting to distance learning, including costs of equipment.
How did you determine priorities for funding?
What form will the financial assistance take?
Have other federal funds been allocated in the areas you have prioritized?
What is included under each of your 10 categories?
Individuals/Families: Funding for housing assistance (including, homelessness, domestic violence, mortgage assistance, landlords, and legal services), student debt assistance, utility bill assistance, veterans assistance, and food banks
School Districts/Local Government: Funding for school district costs, including special education, and county and municipal government costs related to COVID-19.
Health Care: Funding for our safety net, including high Medicaid hospitals, Long-term Care facilities, and Community Health Centers. Funding is also provided for comprehensive testing, tracing and tracking of COVID-19 and for our frontline workers, including hazard pay, post-traumatic stress treatment. First responders also receive funding.
Small Business: Grants to small business, nonprofits and specific sectors of the small business economy that have been hit particularly hard by the COVID-19 pandemic.
Historically Disadvantaged Communities: Black and brown communities are being ravaged by COVID-19. Education, testing and tracing are need in these communities. In addition, businesses in these communities have been largely unsuccessful in securing federal small business funds. Funding to address nutrition and access to fresh foods and vegetables will be provided along with emergency funding for the commonwealth’s two (2) Historically Black Colleges and Universities
Child Care/Early Education: Our child-care and Pre-K operators are struggling to maintain operations. These stresses will only increase as the economy starts to gradually re-open and parents go back to work.
State Government Infrastructure: Clearly there have been some issues with agency responses to COVID-19. We need to upgrade our infrastructure to address COVID-19 and future events that may strain our systems.
Agriculture: Grants to ensure that our food supply chain can continue to function.
Election Security: Funding to ensure that the June 2 primary election and the November general election are conducted in a safe and secure manner.
Have you discussed these priorities with the Wolf Administration or the other caucuses?
Yea, what about the FY 20-21 budget?
Good question. Appropriations Committee staffs and the Budget Office have had preliminary discussions. No decisions have been made or timelines for action set. Certainly, a lot will depend on revenue collections. As mentioned, The Trump Administration for the most part has prohibited Coronavirus Relief Funds from being used to replace state and local tax revenues.
Even if Coronavirus Relief Funds could be used to fill our budget hole, or if another round of federal stimulus funding for state and local governments comes from Washington D.C., these are one-time funds. The IFO has projected that the permanent revenue loss in tax revenue for the commonwealth to be approximately $2.7 billion for FY 20-21 and 21-22. We need to be careful of using one-time revenues to plug recurring revenue holes. We also should not repeat the mistakes of the past by relying on massive budget cuts to fix our problems. That was the route taken coming out of the Great Recession in 2011 and the impacts were devastating on the commonwealth and its residents.