Spotlight PAis an independent, impartial newsroom powered by The Philadelphia Inquirer in partnership with PennLive/The Patriot-News, TribLIVE/Pittsburgh Tribune-Review, and WITF Public Media.
HARRISBURG, Pa. – Nearly a year ago, Pennsylvania lawmakers came up with a plan to spend billions in COVID-19 stimulus funds on housing, conservation and public health.
Since then, the state has managed to get millions of dollars out the door for nursing homes, daycare and more, according to a Spotlight PA review. Subsidy programs targeting violence prevention and the environment are about to begin.
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.
According to information provided to the federal government, the state had spent nearly $5.6 billion in COVID-19 stimulus money by March. The vast majority, about $4.6 billion, was used to replace lost revenue; much of it went to the state’s general fund.
In a report filed by the Pennsylvania Office of the Budget with the U.S. Treasury Department earlier this year, state officials also indicated how much has been spent on nearly 30 new projects.
Some of these programs have disbursed all or most of the money, and include grants for hospital staff, nursing homes and other public health services. But others have been slower in distributing their federal money. These range from student grants for nurses to grants for acid mine disposal.
The state legislature has appropriated how all $7.3 billion should be spent overall, but has not allocated all of 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 earlier this month only approved guidelines on how the money should be spent — meaning the money won’t be spent. reflected in the March report to the US Treasury Department.
The report from the Office of Budget to the U.S. Treasury Department also fails to detail how the $412 million the state legislature gave the governor’s office for discretionary pandemic assistance was spent.
By March 2023, all but $2 million had been spent on bonuses for state workers, student loan exemptions for nurses and hundreds of grants to medical centers, cultural institutions, local governments and charities, according to a public records request filed by Spotlight PA.
Here’s a breakdown of where Pennsylvania’s stimulus spending stands:
When the state legislature first received the federal funds in 2021, it agreed to spend more than half of the total $7.3 billion on revenue replacement. In the document filed with the U.S. Treasury Department, state officials said $4.6 billion was used “to mitigate revenue shortfalls within the General Fund and to support the delivery of government services.”
As part of the 2022 budget, a spending plan for the remaining $2.7 billion was negotiated.
Using stimulus funds to replace lost revenue is a very common practice, according to Philip Rocco, a political science professor 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 convenience. Funds put into revenue replacement need not be reallocated to new projects. Rather, they can be incorporated into the baselines of the budget, making it easy to get the money out the door.
“Nothing needs to be done except just put that money into the state and local budget,” Rocco said.
Still, Pennsylvania is one of the states that has spent the largest percentage of their money on revenue replacement, with 76% of stimulus spending going to that category. While some states are still deciding how to spend their money, at the end of last year only six other states had spent a greater percentage of their money on revenue replacement.
The other projects mentioned in the Office of Budget’s report received much less funding.
The second highest allocation went to nursing and care homes, receiving $282 million.
Last year’s state plan also gave $12 million in federally funded grants to three programs to support elder care and nursing homes. These are the only programs that are “completed” according to the state’s report.
Another program dedicated $55 million to student loans for nurses. Registered nurses living in Pennsylvania and working during the COVID-19 pandemic applied to the Pennsylvania Higher Education Assistance Agency to receive up to $7,500 over three years to reduce their outstanding student loan debt.
The application process closed in March 2022. According to the U.S. Treasury Department report, the program had spent just $3.5 million a year later.
One of the high-profile programs funded by the stimulus money was the Whole-Home Repairs Program, which received $125 million. The program helps eligible homeowners pay for repairs and weathering to keep their homes livable and more energy efficient.
The program, backed by Progressive Senator Nikil Saval (D., Philadelphia), distributes money to counties, which in turn make grants available to homeowners and landlords. The grants are limited to homeowners with household incomes less than 80% of the area’s median income and landlords with no more than 15 rental properties.
“We hear from province after province that the demand is huge,” said Saval.
The program has used just under $68 million of its funding to date, about half of 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 many initially paid for with federal money that state House Democrats now want to continue funding with state funds. Along party lines, the state House recently passed a budget bill that would continue the Whole-Home Repairs program with $200 million in state revenue.
Gov. Josh Shapiro has expressed his support for supporting and growing the initiative. His budget proposal allocates $400 million of state tax revenue to continue programs funded with federal money, including violence intervention and prevention programs and grants to stabilize childcare rates.
Money left to spend
The state reported no spending on four projects, three of which focus on conservation and include mining and water quality improvement. Those programs got over $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 for the Keystone Tree Fund, which is intended to plant and manage public trees, have already been awarded.
The fourth project is a $50 million gun violence intervention effort that awards grants to county attorneys and local law enforcement agencies so they can investigate and prosecute crimes related 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 mandated.
Twenty-nine police departments and prosecutors were selected to participate in the program, including the Bethlehem Police Department. Beneficiaries will spend money and then request reimbursement from the commission, which is why the program is yet to report expenses.
The Philadelphia Office of the District Attorney received the largest grant, worth $20 million, which will be used to expand digital surveillance capabilities and hire new full-time staff.
In addition to these four projects, there are hundreds of millions in stimulus money that lawmakers have appropriated for a broad purpose — from biotechnology research to transfers to existing grant programs — that are still awaiting action.
For example, in July last year, lawmakers earmarked $100 million for mental health without targeting it to any specific target.
Instead, the General Assembly set up a committee to work out a plan, which issued its recommendations in October. They include expanding walk-in crisis centers and addiction treatment services, as well as providing higher wages to behavioral health workers.
The state House approved those recommendations in a bipartisan vote in early June, passing a bill that would provide grants for behavioral health workforce development and expand public safety programs. The measure would also create new funding for mobile crisis teams, crisis drop-in centers and crisis stabilization units as part of suicide prevention efforts.
The plan “has broad support, frankly as it should be,” said law sponsor and mental health advocate, State Representative Mike Schlossberg (D., Lehigh). “I wish we had gotten this money months ago.”
The bill now goes to the Republican-controlled Senate for final approval.
“We have had discussions with the Senate since the start last year. And I think there were some concerns, and we’ll definitely resume those talks,” Schlossberg said.
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