Report: Pennsylvania’s pandemic spending creates “fiscal break” | The state

(Central Square) – A new report warns that some states, including Pennsylvania, may be relying too heavily on short-term federal funds for long-term spending. This creates states for a “fiscal break” that causes budget problems in the future.

The report of the Volcker Alliance, a nonprofit group working to strengthen public service education and effective government, also expressed concern about the lack of transparency in how Pennsylvania spends its federal money on COVID-19. The U.S. Rescue Plan Act sent $ 7.3 billion to the Commonwealth, which was approved for projects related to health care, adverse economic impacts, some infrastructure and other areas.

However, not all states have spent their money wisely.

“The distribution of one-time income replacement payments could jeopardize budgets if federal funding is depleted,” wrote Beverly S. Bunch, a professor at the University of Illinois-Springfield. “In addition, reporting on the use of these funds is inconsistent. In many states, the lack of transparency of programs … will make it more difficult to assess the implications for the budget in the future and bring government officials and agencies to justice. ”

By July 2021, Pennsylvania had spent 63% ($ 4.6 billion) of its federal money sent to the state government. Of this money, $ 3.8 billion went to the general fund of the state to pay for health care and education. Another $ 372 million went to job creation and maintenance and other assistance, and $ 282 million went to nursing homes / subsistence / personal care.

Although the money was spent in accordance with federal guidelines, the money was a one-time increase. The state used it to fund health and education needs that require permanent rather than temporary funding. Walker’s alliance gave Pennsylvania a D rating for budgetary practice over the past five years and called the assessment “appropriate” to how the state government spent those funds on the pandemic.

Instead of climbing over its bad habits in the past, Pennsylvania continued on its old path.

The report encourages states to create spending plans to avoid fiscal breaches arising from too much reliance on one-time federal money infusions, making those plans publicly available and increasing transparency about how they spend money.

“The states themselves must ensure that the $ 195.3 billion in emergency assistance provided to them by Congress does not adjust them to future financial deficits after federal generosity ends,” Bunch wrote.

Back to top button