Pa. has $1 billion in CARES aid left. Where should it go?

It’s time to step back and reevaluate Pennsylvania’s remaining needs for coronavirus relief. How can our state government ensure that the citizens and businesses who most need aid receive it—and not powerful special interests?

Through the CARES (Coronavirus Aid, Relief, and Economic Security) Act, the federal government has already distributed more than twice the aid included in the Great Recession stimulus bill a decade ago. Yet Pennsylvanians are still struggling as state government tries to balance protecting lives and livelihoods.

Our lawmakers were charged with distributing $3.9 billion in discretionary CARES funding. They’ve distributed about $2.9 billion in two pieces of legislation, SB 1108 and HB 2510. This is in addition to the roughly $2.8 billion in CARES funding applied to the state budget.

Meanwhile, other provisions of the CARES act sent aid directly to businesses or local communities. Health care providers, public schools, and businesses received the bulk of these distributions, about $30 billion across Pennsylvania.


Graph: CARES Aid Spending in Pennsylvania

Who Received Money?

Health care: Pennsylvania health care providers have received more than $4 billion from the U.S. Department of Health and Human Services in relief funds, this does not include PPP loans or advanced Medicare payments. For example, UPMC, the parent company of more than 20 hospitals across the state, received more than $300 million in direct federal grants. This is on top of $762 million allocated directly to health care providers in SB 1108, and an additional $11 million in CARES funding used for health care provider items in the 2020-21 budget.

Businesses: Pennsylvania Paycheck Protection loans for businesses currently stand at more than $20 billion. At least a dozen lobbying groups and labor unions received millions of dollars from this program. These well-connected special interests secured taxpayer-funded aid regardless of the pandemic’s impact on their business. Even the state’s initial $61 million small business loan program smacks of special interest bias with a first come, first serve approach through local economic development organizations. SB 1108 allocated another $225 million for small business grants.

Transit: The federal government provided $1.1 billion in grants to mass transit agencies in Pennsylvania.

K-12 education: Public schools received $1.4 billion in the first round of CARES funds, including about $600 million  from the Elementary and Secondary School Emergency Relief Fund (ESSER) and the Governor’s Emergency Education Relief Fund (GEER). Another $317 million came to schools through CARES state budget supplementals. The state legislature appropriated $150 million for safety in SB 1108, and $300 million for school property tax relief in HB 2510. Before the pandemic, school districts were sitting on a whopping $4.6 billion in reserve funds.

Higher education: Universities and colleges received approximately $500 million directly from the CARES act, with state lawmakers appropriating another $72 million to state system schools and student loan relief. The governor directing $28 million in GEER to post-secondary schools. This does not include the millions private and state system colleges (or their foundations) received in PPP loans.

Who hasn’t benefited?

Unlike the well-connected special interests, students and their parents are suffering serious consequences from COVID-19 with little relief in sight. From months of lost instruction time this spring to physical school closures this fall, families are facing hard choices. Major school districts like Philadelphia, Pittsburgh and Central Bucks are starting the year completely virtual. And teacher unions including AFT are threatening to strike unless districts do everything they deem necessary to protect teachers:

“But if the authorities don’t protect the safety and health of those we represent and those we serve, as our executive council voted last week, nothing is off the table — not advocacy or protests, negotiations, grievances or lawsuits, or, if necessary and authorized by a local union, as a last resort, safety strikes.”

Some parents are banding together in “pods” to hire certified teachers for their children in a modern-day “one-room schoolhouse.” But what about the parents who can’t afford that support? Some moms like Jessika Roche do not feel comfortable sending their children to school due to a health condition. However, Jessika’s income comes from driving for ridesharing companies and food delivery businesses.

In addition, private schools serving low-income kids are struggling to stay open after summer fundraisers were canceled and parents are unable to afford tuition.

At the Independence Mission Schools in Philadelphia, the median household income is less than $25,000. The schools serve 5,000 pre-K-8 low-income kids like Lilian, an energetic elementary student at St. Martin de Porres. She is reading three times above her grade level and can only afford a Catholic education through a scholarship.

Back on Track education scholarships could serve as a lifeline for these families. With about $1 billion left to spend from the first CARES Act package, it’s time to put students first.

Sen. Judy Ward’s SB 1230 and Rep. Clint Owlett’s HB 2696 would make $1,000 per child available to low-income families for approved education-related purchases. These scholarship accounts would initially be limited to families at or below 185% of the federal poverty level, which is $40,182 for a family of three. The Back on Track program would cost about $500 million, half of the remaining CARES aid.


Chart: CARES Act Distribution by Group

More aid for public schools, businesses, and healthcare providers is expected in the next federal package. Now it’s time to fund the kids—it’s critical that the students left behind get a lifeline too.