Fiscal experts to states on stimulus cash: Don’t spend it all in one place | Thursday Morning Coffee

May 13, 2021 7:12 am

(Getty Images)

Good Thursday Morning, Fellow Seekers.

To be sure, the hundreds of billions of dollars in federal money headed to state, county, and local governments as a result of the Biden administration’s American Rescue Plan represents a remarkable opportunity for officials to redress longstanding challenges and inequities for their residents.

On Wednesday, for instance, Democrats in the majority-GOP Pennsylvania Senate rolled out a $6.15 billion plan to spend the money that they’re calling their “New Deal for Pennsylvania,” the Capital-Star’s Marley Parish reported. Democrats in the Republican-controlled state House have their own initiative, which they’ve christened the “PA Rescue Plan.”

In a new analysis, experts for the Pew Charitable Trusts offer their own prescriptions for how states can most effectively use their newfound fiscal windfalls. And while this might harsh the Democrats’ respective mellows, they’re advising some restraint.

“States should be cautious about using [American Rescue Plan Act] money to create new ongoing programs. However, if ongoing spending is below what a state is likely to be able to sustain, then using some of the federal dollars for ongoing expenses is a reasonable choice,” the study’s authors, Josh Goodman and Adam Levin write. “Governments could restore cuts to programs such as education or bring back furloughed employees—as long as multiyear forecasts indicate that the particular state’s revenue system can support those costs once the ARPA money expires. They could also boost funding temporarily for programs that are experiencing increased demand, such as Medicaid, so long as the demand is expected to abate as the economy reopens.

The Pennsylvania House (Capital-Star photo by Stephen Caruso)

It’s not as if this is exactly new territory for policymakers. Former Gov. Ed Rendell notoriously used federal stimulus money for public education during the closing years of his administration. That money  eventually expired, prompting the admittedly draconian cuts that also birthed one of the most enduring political myths in state history.

You will not be shocked to learn that the new Pew analysis makes note of that fiscal cliff from more than a decade ago, observing that it “created a new round of budget shortfalls and forced cuts that set back states’ efforts to recover from the recession.”

“In 2009, with state finances in distress as a result of the Great Recession, Congress offered them money through the American Reinvestment and Recovery Act (ARRA). The ARRA dollars provided critical immediate relief. But when most of the money ran out at the end of the 2011 fiscal year, states suddenly lacked the funds to support ongoing programs and services.”

Which is not to say, of course, that lawmakers shouldn’t find a way to intelligently spend the billions of dollars in federal aid in a way that does the most good for the most people. But as the president himself is so often wont to observe, while history rarely repeats itself, it does rhyme.

Pennsylvania State Capitol Building. (Capital-Star photo by Cassie Miller.)

Our Stuff.
The fight over ‘Second Amendment Sanctuary States‘ landed in Pennsylvania on Wednesday, as GOP Sens. Doug Mastriano and Cris Dush loaded their muskets and fired a few rhetorical salvoes in the direction of what they see as an overreaching federal government. While such laws tend to be largely symbolic (and serve as veto-bait for Democratic governors), they do make it harder for the feds to enforce gun laws. Experts say that’s the point, I report.

Here’s Capital-Star Staff Reporter Marley Parish’s full story on the more than $6 billion spending plan that state Senate Democrats rolled out on Wednesday.

With a judge’s order toppling the CDC’s eviction ban temporarily on hold, state officials are urging struggling renters to seek help while they canCassie Miller reports.

As expected, Republicans in the U.S. House voted to strip U.S. Rep. Liz Cheney, R-Wyo., of her leadership post. At least one Pa. GOP lawmaker, Rep. Mike Kelly, R-16th Districthas gone public to explain the reasons for his closed-door voteCapital-Star Washington Reporter Ariana Figueroa has the details.

Pennsylvania Attorney General Josh Shapiro joined with colleagues from Maryland as they appealed to a U.S. Senate panel for help fighting the scourge of untraceable ‘ghost guns,’ Capital-Star Washington Reporter Laura Olson reports.

Philadelphia Police Commissioner Danielle Outlaw has signaled her support for letting veteran cops live outside the city – netting her some pushback from City Council President Darrell Clarke, our partners at the Philadelphia Tribune report.

On our Commentary Page, two experts take a look at the way the partisan divide over COVID-19 pandemic responses played out in states across the nation.

This spring’s primary race for Philadelphia district attorney is ‘personal’ in those neighborhoods most impacted by crime and incarceration, the Inquirer reports.
Sparking confusion, Gov. Tom Wolf and the state Health Department differ on vaccination numbers, the Post-Gazette reports.
Is the current squabble between Gov. Tom Wolf and the Legislature over when to lift pandemic restrictions for real — or just pretend? PennLive’s John Baer takes up the question.
LancasterOnline has its local guide to the 2021 primary election.
St. Luke’s Hospital and LVHN in Allentown have started vaccinating 12-15 year olds, the Morning Call reports.
The four Democratic women running for mayor of Swoyersville, Pa., will try to make history, the Citizens’ Voice reports.

Here’s your #Pennsylvania Instagram of the Day:


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A post shared by ๓i¢hคēl (@moneymc91_)

In their final debate before the primary, Philly DA candidate Carlos Vega bragged about putting cops in prison; incumbent city prosecutor Larry Krasner says his opponent lied in court, WHYY-FM reports.
Local officials in Chambersburg are mulling the creation of a new anti-discrimination ordinance and a human relations commission, WITF-FM reports.
The Chambersburg Public Opinion takes a look at the debate over local school districts retiring Native American mascots (via GoErie, paywall).
Former Congressional candidate Sean Parnell, from western Pennsylvania, has launched his U.S. Senate campaign, PolitcsPA reports.
Critics tell that a proposed ban on menthol cigarettes could increase police focus on Black adults.
The Jan. 6 insurrection at the U.S. Capitol has shone a spotlight on the U.S. military’s extremism problems, Roll Call reports.

What Goes On.
9 a.m., Dickson City Municipal Building, Dickson City Pa.:
House Democratic Policy Committee
12 p.m., Online: First Lady Frances Wolf and physicians discuss COVID-19 vaccine facts for parents who want to get their kids vaccinated. You can watch online at:
2 p.m., Lehigh Valley Center for Independent Living, Allentown: Reps. Peter Schweyer and Mike Schlossberg, both D-Lehigh, joined by Democratic leaders plug the Dems’ PA Rescue Plan

What Goes On (Nakedly Political Edition).
11:30 a.m.: Reception for Sen. Pat Browne
6 p.m.: 
Reception for Sen. John Sabatina
6 p.m: 
Reception for the Senate Democratic Campaign Committee
6:30 p.m: 
Reception for Rep. Matthew Dowling
Ride the circuit, and give at the max, and you’re out at least $6,050 today. The SDCC reception for Rep. Marty Flynn, featuring, the ‘Fab Four‘ members of Congress did not include an ask.

Gov. Tom Wolf 
has no public schedule today.

You Say It’s Your Birthday Dept.
Best wishes go out this morning to veteran PennLive columnist Nancy Eshelman, who celebrates today. Congratulations and enjoy the day.

Heavy Rotation.
Here’s one from dance outfit Rüfus du Sol to get your Thursday morning off to a trance-y, dance-y start. It’s ‘Lost in My Mind.’

Thursday’s Gratuitous Baseball Link.
Baltimore dropped another one, losing 7-1 to the Mets on Wednesday night.

And now you’re up to date.

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John L. Micek

A three-decade veteran of the news business, John L. Micek is the Pennsylvania Capital-Star's former Editor-in-Chief.