Fiscal Earmarks Reduce State Budget Transparency

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  • The 2021–2022 Fiscal Code contains at least $5.5 billion in federal and state funds earmarked for special projects across the state, up from $120 million last year. Most of this increase is due to one-time funding through federal COVID-19 bills.
  • When solely accounting for state money—and excluding $2.7 billion in transfers to other state funds—this year's $193.5 million in earmarks represent a 62% increase from the 2020–2021 Fiscal Code.
  • Regardless of the worthiness of earmarks recipients, it is the spending process for these funds that diminishes and clouds government accountability.


The Pennsylvania Legislature passes an annual Fiscal Code instructing executive departments and commissions on how to implement the year’s state operating budget appropriations.[i] Included in the Fiscal Code are earmarks directing money to individual corporations, bureaucracies, and other organizations—often in convoluted language that obscures how taxpayer money is spent. While recipients may be deserving and serving the public interest, it is the spending process that diminishes government accountability.

  • Pennsylvania’s Fiscal Code exacerbates unsustainable state spending. With revenue forecast to decline $2.2 billion next year,[ii] the special Fiscal Code earmarks within this budget decrease the transparency necessary to make state budgeting solvent and accountable long-term.
  • The 2021–2022 Fiscal Code allocates $5.5 billion in both federal and state money through 108 earmarks. Though this increase compared to prior years is driven largely by federal money and Rainy Day fund transfers, state money earmarks are also at a high, according to data collected since fiscal year 2016.
    • Federal American Rescue Plan (ARP) aid totals $2.6 billion.
    • Including the five earmarks transferring $2.7 billion to special state funds, over $2.9 billion in state taxpayer dollars went to 90 earmarks.
  • With one exception, legislators have increased earmark spending in each subsequent budget since fiscal year 2016.
    • The 2020–2021 Fiscal Code included $120 million in 80 earmarks (plus 24 fund transfers and two earmarks explicitly allocating federal COVID-19 funds), double the previous year’s total earmarked spending. These earmarks aggravated the problem of redirecting taxpayer funds to privileged projects in a year that Coronavirus Aid, Relief, and Economic Security Act (CARES Act) funds filled budget holes but left intact the budget’s structural funding imbalance.
    • In the 2019–2020 Fiscal Code, legislators allocated $61 million across more than 70 earmarks.
    • Breaking the trend in 2018–2019, legislators reduced the total to $35 million within just 50 earmarks.
    • The 2017–2018 Fiscal Code contained $65 million in hidden expenses within 73 earmarks.
    • The 2016–2017 Fiscal Code housed $40 million across 45 earmarks.


  • The Fiscal Code allocates $2.6 billion in federal relief funds.
    • More than $1 billion is set to help renters and homeowners through grant programs such as utility and water assistance.
    • Another $728 million distributes through the state Department of Human Services’ Child Care Stabilization Program to childcare providers.
    • A total $500 million of ARP Elementary and Secondary School Emergency Relief (ESSER) funds are allocated, with $350 million to address learning loss and summer and after-school enrichment programs and another $150 million to support education institutions through Department of Education grant programs.
    • An additional $282 million is for long-term living programs such as nursing homes, assisted living communities, and personal care homes, including $5 million in grants to improve facility ventilation.
  • Dozens of earmarks outline procedures for dispersing federal and state money that, while not directly allocating funds to named recipients, nonetheless have policy implications and costs. For instance:
    • The Fiscal Code extends a deadline for the use of the CARES Act/ARP funding and requires transferring any unappropriated ARP funds in the COVID-19 Response Restricted Account to the General Fund for fiscal years beginning after July 31, 2022.
    • Public education entities can waive Bureau of Occupational and Industrial Safety fees, reducing bureau collections by $788,000.
    • The bill reverses the $59.5 million in special fund transfers to the General Fund (transfers originally made to balance the 2020–2021 state budget).
  • The number of transfers between state funds declined from previous years to just five earmarks. Notably:
    • Over $2.5 billion moves from the General Fund surpluses to the Rainy Day Fund.
    • Approximately $12.3 million in Personal Income Tax revenue transfers to the Environmental Stewardship Fund for debt service on the Growing Greener bonds.
    • The Race Horse Development Fund receives weekly transfers totaling $19.7 million, in addition to a second $10.1 million transfer for regulation enforcement.
    • The Tobacco Settlement Fund gets $115.3 million from Cigarette Tax revenue to pay the debt service for the Tobacco Fund borrowing used to fill the 2017–2018 budget gap.


The majority of the $193 million in earmarks allocating state tax dollars via state departments, agencies, commissions, and special funds are either available to entities across the state or lack enough detail to determine a recipient. The excerpts below demonstrate the convoluted language consistent throughout the current earmarks.

  • About 30 earmarks make funding available for statewide systems.
    • For example, “From money appropriated for mental health services or from federal money, $580,000 shall be used for the following: the operation and maintenance of a network of web portals that provide comprehensive referral services, support and information relating to early intervention, prevention and support for individuals with mental health or substance abuse issues, county mental health offices, providers and others.”
    • Other earmarks perpetuate past spending, such as this $2 million program: “Subject to the availability of Federal funds and eligibility under Federal TANFBG rules, grantees who operated within the PA WorkWear program in fiscal year 2019–2020 shall be offered a grant for the fiscal year to continue service delivery under substantially similar terms as previous PA WorkWear grants.”
    • Several earmarks provide money directly to state department operations, such as the Department of Community and Economic Development (DCD) receiving over $4 million to fund its tourism office activities. 
  • Approximately 14 earmarks, indicate specific recipients, yet the wording does not provide the details to identify the locations or beneficiaries. For instance:
    •  “Notwithstanding any other provision of law, funds set aside under section 2509.8 of the Public School Code of 1949 shall include an allocation of $1,000,000 for an approved private school which received a payment under section 1722-F(3).” An analysis of past Fiscal Codes reveals this is a private school located in one of these counties: Beaver, Butler, Cambria, Centre, Fayette, Franklin, Monroe, Schuylkill, or Washington.
    • The Department of Health (DOH) shall distribute $5 million “to a nonpublic nursing home located in a county of the eighth class with more than 119 beds and a Medicaid acuity of 1.02 as of August 1, 2017, to ensure access to necessary nursing home care in that county.” This could be for the Grandview Nursing and Rehabilitation in Montour County, the Sweden Valley Manor in Potter County, or the Highlands Healthcare and Rehabilitation Center in Sullivan County.
    •  “No less than the amount used in the 2014–2015 fiscal year shall be used for blueprint mentoring programs that address reducing youth violence in cities of the first, second and third class also receiving a proportionate share of $50,000.” At least 58 cities qualify receiving $450,000, an amount identified from previous Fiscal Codes.


An analysis of identifiable, taxpayer-funded earmarks reveals the budgetary priorities of elected officials as well as the uneven playing field due to favoritism. In addition to the millions of dollars accessible to counties across the state, $35 million in decoded earmarks primarily benefit just five counties.

  • Three state departments have more than 10 earmarks apiece. Approximately 80% of these dollars go to education, health, and human services.
    • The Department of Education (PDE) gets at least $104 million to distribute across the state.
      • The bulk of this funding is from the $100 million sent to 100 qualifying school districts. This money is in addition to the increased funding for basic education in the Appropriations Bill.
    • The Department of Human Services (DHS) has at least $47 million to allocate to health and social services.
      • Approximately $13 million goes to hospitals or physician practice plans, primarily in Philadelphia and Pittsburgh, but the Fiscal Code fails to clearly state this. Instead, it uses language such as, “No less than $2,500,000 shall be distributed to an acute care hospital in a city of the third class with a population between 14,000 and 15,000 according to the most recent Federal decennial census in a county of the third class with a population between 360,000 and 370,000 according to the most recent Federal decennial census.”
    • The Department of Health (DOH) directly receives at least $3.8 million. Furthermore, the Fiscal Code outlines the formula by which health-related programs receive $355.6 million through grants funded by the Tobacco Settlement Fund.
      • Hospitals, foundations, institutes, and university affiliated labs principally will benefit from DOH funds.
      • Recipients are not clearly identified; rather, research reveals likely benefiting entities, such as: “From the appropriation for leukemia and lymphoma, $200,000 shall be allocated to a branch of an eastern Pennsylvania chapter of a nonprofit organization, where the branch is located within a city of the third class that is located in two counties of the third class, dedicated to understanding, preventing, diagnosing and treating blood cancer and caring for patients diagnosed with blood cancer.”
        • The Lehigh Valley Cancer Institute is the probable recipient, as Bethlehem is the only qualifying city.
    • Notably, the Department of Community and Economic Development (DCED) receives six earmarks worth $20 million. This is a likely undercount as numerous earmarks do not have specific dollar amounts.
      • The largest earmark requires the disbursement of $8 million through DCED’s Pennsylvania First Program to fund “the Workforce and Economic Development Network of Pennsylvania (WEDnetPA) for workforce training grants provided through an alliance of educational providers including, but not limited to, Pennsylvania State System of Higher Education universities, the Pennsylvania College of Technology and community colleges located in this Commonwealth.”



  • Five counties hold the bulk of targeted earmarks, though the Fiscal Code rarely explicitly names the counties themselves.
    • Philadelphia receives the most earmarks (12), amounting to more than $7 million. The bulk of decoded earmarks go to medical and human services organizations such as Children’s Hospital of Philadelphia, Temple University Hospital, and Thomas Jefferson University Hospital.
      • A unique earmark requires splitting at least $1.5 million with Delaware County for “a pilot program to offset costs incurred by a city of the first class and a county of the second class A that is also a home rule county in connection with hiring additional assistant district attorneys designated as a Special United States Attorney by a United States Attorney's office through participation in the Project Safe Neighborhoods program.”
    • Luzerne County receives $3.75 million through two earmarks, including the Luzerne County Redevelopment Authority (“a county redevelopment authority within a home rule county of the third class”) being permitted to utilize local gaming revenue to securitize debt.
    • Allegheny County gets $3.7 million via seven earmarks, five of which ($3.3 million) go specifically to Pittsburgh (“city of the second class in a county of the second class”) principally for medical purposes.
    • Centre County rounds out the top recipients list with $2.9 million for Penn State University. Line items utilize terms such as “agricultural resource center” and “animal diagnostic laboratory system laboratories located at a land grant university and at a school of veterinary medicine.”
    • Delaware County has the third greatest number of earmarks with a $2.7 million price tag.


The Fiscal Code earmark process—by using difficult to decipher language and avoiding the typical grant process or separate spending bills—allows lawmakers to spend money with less accountability. While many of recipients may be worth funding, it creates a hidden process of funneling money to lobbyists’ priorities, which may or may not represent taxpayers’ best interests.

Lawmakers should end the earmark process and instead use above-board legislation when appropriating money to select parties. All state money available to private entities should rely upon a competitive grant process and the same performance measurement that applies to other spending.

Moreover, reducing corporate welfare in the state budget can bring an added level of transparency while allowing for tax relief to all Pennsylvania institutions, not just the well-connected. Taxpayer-funded financial aid favoring one sector or business over others is projected to reach $864 million in 2021. Passing legislation to automatically sunset programs with negative returns would help reduce government waste, while taking the additional step of eliminating corporate giveaways could create a revenue-neutral corporate tax cut from the current 9.99% to between 6.93% and 7.2%.[iii]

Taken together, these reforms will help incentivize smart, efficient spending to address the state’s long-term financial woes and grant taxpayers the accountability and transparency they deserve.


[i] Act of Apr. 9, 1929, P.L. 343, No. 176, The Pennsylvania General Assembly.

[ii] “Official Revenue Estimate, FY 2021–22,” Independent Fiscal Office (June 2021),

[iii] Independent Fiscal Office, Initial Revenue Estimate, May, 2020, Calculation is based on total corporate welfare spending from the 2020-21 Governor’s Executive budget. The higher 7.2% rate is based upon pre-COVID revenue estimates from June 2019, instead of the 2020 IFO estimate, to avoid distorting the likely impact of this policy.