What COVID windfall? States have been slow to spend stimulus cash, report | Thursday Morning Coffee

At least 10 states haven’t spent any of the aid from the American Rescue Plan, according to a published report

August 19, 2021 7:16 am

Good Thursday Morning, Fellow Seekers.

missed opportunity.

That’s how Pennsylvania House Minority Leader Joanna McClinton, D-Philadelphia, characterized the decision by the Legislature’s Republican majority to bank $5 billion out of $7 billion in federal stimulus funds, instead of spending it on the most vulnerable Pennsylvanians.

“It’s always good to prevent tax hikes on working families, and we did manage to get more money to schools, seniors, violence prevention, and roads and bridges, but that’s just not enough,” McClinton said in a June statement as the Legislature passed this year’s $40.8 billion state budget.

“There are billions of dollars in surplus money that belongs to the people and should have been used to help fairly fund every school and maybe even cut property taxes for homeowners. I am determined to keep fighting to invest this funding into families across the commonwealth,” she concluded.

Democrats were justifiably outraged on the GOP’s decision to punt on spending on such critical programs as child care and paid sick leave.

But months after the Biden administration fire-hosed $350 billion in aid to states, municipalities, territories and tribal governments, lawmakers in at least 10 states have yet to spend any of it, according to a new analysis by Bloomberg’s CityLab.

In Michigan, for instance, officials had budgeted only 7 percent of the Wolverine State’s $6.5 billion allocation, and hadn’t spent any of it as of last week, CityLab reported.

In South Dakota, officials haven’t even asked for the relatively modest $974 million that they’ve been allocated, according to CityLab.

And in West Virginia, home of the U.S. Senate’s Dr. No, Democratic Sen. Joe Manchin, a state website promises that a detailed plan to spend the Mountain State’s $1.35 billion federal windfall is “COMING SOON,” CityLab reported.

Part of the problem — if you want to call it that — is that a post-pandemic economic rebound has left states sitting on healthier-than-expected tax revenues, CityLab noted. So states aren’t exactly in a rush to burn through their stimulus aid.

That was the case in Pennsylvania, where officials deposited $2.7 billion in surplus revenues into the state’s Rainy Day Fund, which acts as a hedge against future economic downturns.

In June, Democrats argued the robust surpluses should have provided even more of an impetus to spend far more of the federal stimulus money than the $2 billion included in the approved state budget.

“In a year when our rebounding economy delivered a $3 billion surplus and on top of more than $7 billion in American Rescue Plan money to help workers, businesses, schools, and so many more, it’s not enough to just say we passed a budget on time and with no tax increases,” Rep. Matt Bradford, of Montgomery County, the ranking Democrat on the House Appropriations Committee, said at the time. “The fight to implement the fair funding formula for our schools and use rescue dollars for their intended purposes must continue.”

Republicans countered that they wanted to avoid the fate of former GOP Gov. Tom Corbett, who had to cut hundreds of billions in spending from public education after federal stimulus money ran out in 2010.

Districts that had been flush with cash were forced to slash staff and programs as a result. The reductions were so unpopular that they were one of the factors that denied Corbett re-election in 2014.

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

At least two factors also are contributing to the hold-up: Bureaucratic snarls and the expected partisan pugilism.

In the case of the former, it took the U.S. Treasury Department until May to issue its interim guidance on how to spend the money — which was two months after the bill became law, CityLab reported. And the agency has yet to issue its final guidance. Under the current rules, states must spend the money by 2026, CityLab noted.

In the case of the latter, you’ll be shocked to learn that agreements have eluded lawmakers and governors of opposite parties. In Massachusetts, for instance, lawmakers rejected GOP Gov. Charlie Baker’s plan to spend $2.3 billion in stimulus funds, CityLab reported.

Back home in Harrisburg, Democrats were still banging the drum for spending the money even though the Capitol has largely been a ghost town this summer.

“We will continue our fight to #FreetheFunds to reward those who sacrificed and build a bold and equitable economy for all,” Sen. Vincent Hughes, of Philadelphia, the ranking Democrat on the Senate Appropriations Committeewrote in a recent blog post.

The Pennsylvania Capitol building. (Capital-Star photo by Sarah Anne Hughes)

Our Stuff.
Changing demographics and redistricting may provide a path back to power for Pennsylvania’s legislative Democrats after a more than a decade in the wilderness, Stephen Caruso reports.

In a 7-4 party-line vote on Wednesday, the Senate Environmental Resources and Energy Committee approved a letter to the state’s Independent Regulatory Review Commission, asking it to oppose the Regional Greenhouse Gas Initiative, popularly known as RGGIMarley Parish has the details.

On the 101st anniversary of the ratification of the 19th Amendment on Wednesday, civic groups in Pennsylvania reflected on the occasion with a watchful eye on the deluge of voting rights reforms circulating the nation. Cassie Miller has the story.

COVID-19 booster shots will start rolling out next monthCapital-Star Washington Reporter Laura Olson writes.

From our partners at the Philadelphia Tribune: ‘This can’t be normal, this can’t be accepted’: Philly’s gun violence has left families in pain and fear.

From our partners at Pittsburgh City Paper, a question in search of an answer: Why are some Pittsburgh industries seeing persistent labor shortages?

On our Commentary Page this morning: Twenty-five years after welfare reform, state policymakers need to ensure a real safety net for Pennsylvania’s families, an attorney with Community Legal Services of Philadelphia writes. And life without parole has turned Pennsylvania’s prisons into hospices for the hopeless, a formerly incarcerated person, who now advocates for those behind bars, writes.

(Photo via Getty Images/Colorado Newsline.)

Philadelphia Mayor Jim Kenney has ‘firmly rejected’ calls to bring in the National Guard, as the city contends with an epidemic of violence, saying the soldiers are not trained to fight urban crime, the Inquirer reports.

And WHYY-FM looks at how the city’s schools are getting ready to resume classes amid the violence.

The Pittsburgh Public Schools will start classes on Sept. 3 instead of the planned Sept. 8, the Post-Gazette reports.

Putting years of toil and decades of experience to work, the Pa. Supreme Court will hear the case of a man … who got naked and high on his first day of workPennLive reports.

Remember that runaway kangaroo from the other day? Turns out it’s a wallaby. They caught it. But no one knows who owns it, the Lebanon Daily News reports (via the York Daily Record).

LancasterOnline talked to local Afghanistan veterans about the fall of the central Asian nation (paywall).

The state’s two teachers unions say the only way to guarantee in-person classes all year is to require masks, the Associated Press, with an assist from The Morning Call, reports.

Speaking of which, the Wyoming Area Schools in Luzerne County will mandate masks for students, the Citizens’ Voice reports.

Businessman Christian Nascimento has launched a Republican bid to unseat U.S. Rep. Madeleine Dean, D-4th DistrictPoliticsPA reports.

Former Nevada Attorney General Adam Laxalt, a Republican, says he’ll run for U.S. Senate in the Silver State, challenging Democratic U.S. Sen. Catherine Cortez Masto. Observers say the battleground state was just put in play for 2022. Roll Call has the details.

Here’s your #ValleyForge Instagram of the Day:


View this post on Instagram


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

What Goes On
10 am., G50 Irvis: House State Government Committee, subcommittee on pensions
11 a.m., 4409 Chestnut St., Philadelphia: Sen. Vincent HughesRep. Joanna McClinton, and others on using federal stimulus money to help businesses that were unable to operate remotely.
12 p.m., Soldiers & Sailors Grove: The ALS “CEO Soak,’ to raise money and awareness.

What Goes On (Nakedly Political Edition)
6 p.m.: Reception for Rep. Martina White, R-Philadelphia. Admission runs $50 to $1,000.

Gov. Tom Wolf has no public schedule today.

You Say It’s Your Birthday Dept.
This one was a request: Best wishes go out this morning to House Minority Leader Joanna McClinton, D-Philadelphia, who celebrates today. Congratulations and enjoy the day.

Heavy Rotation
We’ll get a little trance-y for this penultimate day of the working week. From Swedish singer-songwriter Jennie Abrahamson, here’s ‘Safe Tonight.’

Thursday’s Gratuitous Soccer Link
The former captain of Afghanistan’s women’s national soccer team has urged current players to burn their uniforms and delete social media photos to protect themselves as the Taliban take power, the Guardian reports.

And now you’re up to date.

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

John L. Micek

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