This story is part of TRACE (Toward Response and Community Equity), a year-long series that will track how and where the region’s government, philanthropic, civic and private sector is working toward a more just recovery.
The financial disaster that accompanied the COVID health crisis has been likened to putting the economy into a “medically induced coma.”
Now President Joe Biden is trying to revive the patient with the $1.9 trillion American Rescue Plan Act of 2021 (ARP), the country’s third federal COVID stimulus plan. The funding will go to a variety of needs including families, farmers, the homeless and schools.
About $350 billion of the funding was slated to go to state and local governments, the first payment of which was due to be paid out 60 days after the March 11 signing of the bill into law. Pennsylvania has just received that first payment — $7 billion of an expected $13.7 billion — but, as of yet, the state has provided little information on how it plans to infuse the cash into local economies.
The American Rescue Plan garnered bipartisan support among voters if not legislators. About 70% of Americans and 4 out of 10 Republicans, including a majority of low-income Republicans, are in favor of the stimulus plan according to a Pew Research Center survey taken in March.
However, the bill became law without a single Republican vote. In Pennsylvania, the Republican-controlled General Assembly has yet to determine how the funds will be distributed.
Some reluctance about the rescue plan, according to the Commonwealth Fund, is attributed to the fact Pennsylvania has now received $17 billion from the three rounds of COVID stimulus spending and but only lost $.07 billion because of the pandemic.
The ARP places broad limits on how state and local governments can use the funds including covering the expenses of first responders, providing premium pay for essential employees and undertaking local infrastructure improvements. But states are restricted from using the funds for pension costs or to reduce taxes.
The state Democrats have introduced their own ideas, dubbed the Pennsylvania Rescue Plan, which would distribute the $7.3 billion of federal help to people, projects and public health. They are recommending, for example, $500 million for job creation and $250 million each to promote affordable housing and to create a Paid Sick and Family Leave program
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While Harrisburg fiddles, local governments are not stymied.
ARP provides $130 billion to be divided equally between municipalities and counties — bypassing the capitol and flowing directly to local governments. The National of League of Cities called this an historic investment in local government and the largest direct infusion of money into local government.
This means the amount of ARP money pouring into Philadelphia and its surrounding counties alone is about $900 million dollars with half of that arriving now. All funds will have to be spent by December 2024.
Some argue this a recipe for fraud and abuse others see it as a chance for local collaboration and to move the needle on the disparities that has made COVID so devastating for BIPOC communities.
Brooking Institution Fellows Joseph Parilla and Brad Whitehead, both part of the Institution’s Metropolitan Policy Program, wrote that the ARP “represents an opportunity for state and local officials to ‘invest’ in their communities rather than simply ‘spend’ their significant allotments.”
“Despite scattered carping about the need for more ‘accountability,’ the most striking and under-discussed aspect of ARP is that it represents not only the largest positive fiscal jolt to state and local budgets in decades, but also the one most supportive of local discretion,” added Parilla and Whitehead. The authors are pushing elected officials and their networks to organize around a future vision that goes beyond fixing budget damage but includes developing a stronger regional economy.
Here’s what is happening in local counties thus far:
According to Bucks County Commission Chair Diane Ellis-Marseglia, rebuilding business is where the county is putting its attention. It will focus on rebuilding its pre COVID $1.1 billion tourist industry by providing economic assistance to county businesses. In addition, the county will also provide addition funds for the court systems and the corrections departments. The Bucks County government will receive $122 million and its 54 municipalities will share $74 million.
A total of $98 million will go to Camden County government. Another $112 million will go to the municipalities, with about $63 million to be distributed to the city of Camden — more than any other municipality in the county. Camden City School District will receive the highest amount of funding — $100 million — under the Elementary and Secondary School Emergency Relief Fund in the ARP Act.
An estimated $153 million will flow into Chester County and its 73 municipalities. Chester County government will receive $102 million. School districts in Chester County will receive more than $50 million in federal COVID-19 relief funding,
Delaware County Council Chair Brian Zidek said the county expects to receive $110 million in assistance. The county government has spent money on testing facilities and vaccine sites as well as grants to businesses, schools and daycare providers, he said. The influx of federal money, Zidek added, will also augment lost tax revenue from business closures.
“We think (COVID relief) is going to help us get back on our feet a lot quicker,” he said.
Montgomery County’s share amounts to approximately $161 million, according to Montgomery County’s Chief Financial Officer Dean Dortone. “I think that’s part of what we’ll understand more in the future as the Treasury releases guidance, but based on some of the preliminary reading of the information, it appears that the funding’s going to be able to be utilized for similar programs that we used the CARES Act for — driving the economy by supporting the local businesses with grants, supporting the not-for-profits, supporting our own operations,” he said.
“It gives us certainty for planning,” added Montgomery County Commission Vice Chairman Ken Lawrence Jr.
The city will receive about $1.4 billion dollars which Finance Director Robert Dubow said will go towards the city’s operating budget and closing a $450 million budget gap. Another $1.3 billion has been allocated to Philadelphia for K-12 education.-30-
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