Pennsylvania to hold on to $5B in American Rescue Plan funds


The state of Pennsylvania received an additional $7.3 billion in its coffers from the American Rescue Plan Act but is holding on to the majority of the funds.

Pennsylvania ended the 2020-2021 budget year with a $3 billion surplus and lawmakers chose to save the surplus along with more than $5 billion from the American Rescue Plan. State lawmakers are allocating the remaining ARP dollars toward highway construction, nursing homes and housing construction.

The allocation represents 7.9% of the Commonwealth’s total budget allocation for fiscal year 2020, according to an analysis by The Pew Charitable Trusts. Pennsylvania is among 37 states that will receive between 5 and 10% of their fiscal 2020 budget through the American Rescue Plan.

Each state was given a piece of the $195 billion pie set aside in the $1.9 trillion American Rescue Plan Act based on how many workers in their states were unemployed in 2020. An additional $500 million was given to each state as well.

The deadline for determining how they want to spend the money is 2024, meaning states can save them for a rainy day and spend them on projects that include broadband, water or sewer infrastructure. The money can also save a state program from budget cuts. The funds must be spent by Dec. 31, 2026.

While Pennsylvania lawmakers chose to save the majority of their ARP funds, other states are spending it. Neighboring New Jersey is spending $600 million of its $6.2 billion allocation on special education and another $400 million for trauma centers, according to information from the National Conference of State Legislatures, which is compiling a data base showing how states are using their money.

Pennsylvania House Approporations Chairman Stan Saylor, R-Red Lion, defended the plan to save two-thirds of funds from the American Rescue Act. He cited the last time Pennysylvania received federal funding in 2008.

“Gov. Ed Rendell, with the help of the House Democrats who were in the majority at the time, went on a spending spree, using one-time federal funds to grow recurring expenditures,” Saylor said in a statement. “The move culminated in Gov. Tom Corbett facing a $4 billion deficit in his first year in office.”

Rep. Frank Burns, D-Cambria, wanted to use the ARP funds to reduce property taxes and offer rent stipends. Sen. Sharif Street said not using the ARP allocation was “leaving money on the table” that could be used to fund housing, public health and provide assistance for small businesses.

Gov. Tom Wolf signed the budget on June 30.

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