The Morning Call

$1.3B of re­lief funds to plug bud­get gap

Restau­rants, tav­erns oth­ers lose out in Pa. law­mak­ers’ vote

- By Ford Turner Business · US Elections · U.S. News · Politics · Infectious Diseases · US Politics · Health Conditions · United States Senate · Republican Party (United States) · Northampton Town F.C. · Pennsylvania · Tom Wolf · U.S. Chamber of Commerce · Lehigh Valley · Berks County · York County · Lehigh County · U.S. Treasury · United States of America · Dominion Voting Systems · Democratic Party (United States) · Harrisburg · Lisa Boscola · Northampton County · Judy Schwank · Carbon County · York County

HAR­RIS­BURG — Many law­mak­ers joined restau­rant and tav­ern in­dus­try of­fi­cials Fri­day in crit­i­ciz­ing the Leg­is­la­ture’s use of $1.3 bil­lion of fed­eral coro­n­avirus emer­gency funds orig­i­nally in­tended to be handed out to virus-rav­aged busi­nesses, or­ga­ni­za­tions and peo­ple to bal­ance the state bud­get.

The House and Se­nate voted to pass the roughly $11 bil­lion, no-new-taxes spend­ing plan Fri­day evening. The votes were 104-97 in the House and 31-18 in the Se­nate.

Up­dated fed­eral guid­ance made the use of the fed­eral money to sup­port the bud­get le­gal, ac­cord­ing to a com­mit­tee-lead­ing Repub­li­can law­maker.

“This bud­get is wrong,” said Demo­cratic state Sen. Lisa Boscola of Northamp­ton County, who cast a “no” vote. “I view a vote for this bud­get as a vote against small busi­nesses across Penn­syl­va­nia, espe­cially restau­rants, sa­lons, gyms, ho­tels and nonprofits that have done so much for our com­mu­ni­ties.”

The state spent most of the fed­eral coro­n­avirus emer­gency money it re­ceived ear­lier this year. About $1.3 bil­lion was set aside in a re­serve fund.

That money ul­ti­mately was

tapped by bud­get ne­go­tia­tors that in­cluded rep­re­sen­ta­tives of Gov. Tom Wolf.

John Longstreet, pres­i­dent and CEO of the Penn­syl­va­nia Restau­rant and Lodg­ing As­so­ci­a­tion, said it is pos­si­ble 17,000 Penn­syl­va­nia restau­rants may be forced out of busi­ness for­ever by the pan­demic.

Of us­ing the fed­eral emer­gency money in the bud­get, Longstreet said, “If it is le­gal, it is clearly not right.”

He con­tin­ued, “It is very dis­turb­ing that they would do that, par­tic­u­larly be­cause the gover­nor him­self, and leg­is­la­tors, have cried for help for the restau­rant in­dus­try.”

Tony Ian­nelli, pres­i­dent and CEO of the Greater Le­high Val­ley Cham­ber of Com­merce, said he had hoped for a “half­way” ap­proach putting some of the $1.3 bil­lion in the bud­get and dis­tribut­ing the rest to pan­demic-af­fected busi­nesses, or­ga­ni­za­tions and peo­ple.

He cited the pos­i­tive ef­fects of $10 mil­lion in fed­eral coro­n­avirus money dis­trib­uted via grants of up to $15,000 each in the Le­high Val­ley ear­lier this year.

At least one restau­rant owner, he said, was “brought to tears” by get­ting the money.

Penn­syl­va­nia Li­censed Bev­er­age/ Tav­ern As­so­ci­a­tion Ex­ec­u­tive Di­rec­tor Chuck Moran said his as­so­ci­a­tion mem­bers have an av­er­age of 16 em­ploy­ees each. As of Au­gust, an av­er­age of 13 of those em­ploy­ees were not work­ing be­cause of clo­sures or busi­ness cut­backs.

Putting the emer­gency money in the bud­get, he said, “just builds fur­ther dis­trust be­tween the in­dus­try and state gov­ern­ment.”

Law­mak­ers un­com­fort­able

Ahead of the bud­get votes, some law­mak­ers spoke of their dis­com­fort on us­ing the money that came to the state un­der the Coro­n­avirus Aid, Re­lies, and Eco­nomic Se­cu­rity, or CARES Act.

“I am pro­foundly dis­ap­pointed and I am em­bar­rassed. Those funds were to help peo­ple,” said Demo­cratic state Sen. Judy Sch­wank of Berks County. “The hos­pi­tal­ity in­dus­try has con­sis­tently in­di­cated they need help, and they need it now.”

Repub­li­can Sen. Kristin Phillips-Hill of York County noted that the plan was for a ma­jor por­tion of the $1.3 bil­lion to be used in the bud­get for the Depart­ment of Cor­rec­tions, which has many front-line work­ers who deal with virus is­sues every day on the job.

“We are fac­ing re­ally sig­nif­i­cant fi­nan­cial chal­lenges,” Phillips-Hill said. “We do have a con­sti­tu­tional obli­ga­tion to make the bud­get.”

Sch­wank voted “no” and Phillips-Hill voted “yes.”

Other “no” votes in the House came from Demo­cratic state Reps. Mike Schlossber­g and Peter Sch­weyer, both of Le­high County.

Schlossber­g called use of the CARES money “a stick­ing point” and said, “It is a ter­ri­ble bud­get, but it is also a ter­ri­ble mo­ment.” Sch­weyer said he didn’t like the idea “of us­ing money that is sup­posed to go to peo­ple who are strug­gling.”

Car­bon County Repub­li­can state Rep. Doyle Hef­fley a “yes” vote called the pro­posed bud­get “a good com­pro­mise” that would cover the state’s fi­nan­cial obli­ga­tions.

He pointed out that no front-line work­ers would get a new hit fi­nan­cially from their tax bills.

A spokesper­son for Gov. Tom Wolf, Lyn­d­say Kensinger, said Wolf would sign the bud­get. She said that while COVID-19 has left Penn­syl­va­nia in a dif­fi­cult fi­nan­cial sit­u­a­tion, the bud­get pro­tects against fur­loughs and deep pro­gram cuts and fully funds ba­sic ed­u­ca­tion.

Kensinger said Wolf would con­tinue to ad­vo­cate for money to sup­port peo­ple in need of ad­di­tional sup­port due to COVID-19, in­clud­ing those in the restau­rant in­dus­try.

Spend­ing break­down

A break­down pro­vided by a state law­maker showed how the $1.3 bil­lion would be used to off­set de­creases in cer­tain state ap­pro­pri­a­tions:

„ State cor­rec­tions in­sti­tu­tions: $968 mil­lion

„ State po­lice gen­eral gov­ern­ment op­er­a­tions: $226 mil­lion

„ Cor­rec­tions med­i­cal care: $95 mil­lion „ Youth de­vel­op­ment cen­ters: $30 mil­lion

„ State health care cen­ters: $10 mil­lion „ Health gen­eral gov­ern­ment op­er­a­tions: $4 mil­lion

The pan­demic wreaked havoc on the state bud­get process, forc­ing the pas­sage in the spring of a bud­get cov­er­ing only five months. The plan un­der con­sid­er­a­tion would com­plete fis­cal year 2020-21.

A spokes­woman for Wolf, Lyn­d­say Kensinger, was not im­me­di­ately avail­able for com­ment af­ter the bud­get passed the Gen­eral As­sem­bly.

Be­fore­hand, she said, “The administra­tion is work­ing with the Gen­eral As­sem­bly to com­plete a bal­anced bud­get by the end of Novem­ber. It is crit­i­cal for us to fi­nal­ize the bud­get by Novem­ber to avoid fur­loughs and any stop­page of crit­i­cal pay­ments to providers and grantees.”

A sea change in state law­mak­ers’ think­ing about us­ing the emer­gency money came when the U.S. Trea­sury Depart­ment up­dated guid­ance on the fed­eral money that al­lowed state gov­ern­ments to use the money in ways that orig­i­nally were pro­hib­ited.

In other ac­tions at the Capi­tol on Fri­day:

„ Repub­li­can Rep. Seth Grove of York County was among Repub­li­cans who lashed out at Do­min­ion Vot­ing Sys­tems a com­pany they said han­dled elec­tion bal­lots for 1.3 mil­lion Penn­syl­va­ni­ans af­ter they said the com­pany backed away from a com­mit­ment to take part in a pub­lic hear­ing. “Last evening, Do­min­ion Vot­ing Sys­tems lawyered up and backed out of their com­mit­ment to the peo­ple of Penn­syl­va­nia,” Grove said. Do­min­ion, which makes soft­ware that lo­cal gov­ern­ments use to help run elec­tions, is at the cen­ter of Repub­li­can­backed claims about elec­tion soft­ware prob­lems that me­dia or­ga­ni­za­tions have de­scribed as base­less.

„ The Gen­eral As­sem­bly gave fi­nal ap­proval to a mea­sure that gives tem­po­rary pro­tec­tion from COVID-19 law­suits to small busi­nesses that have fol­lowed fed­eral and state health guide­lines. The fi­nal vote in the House, taken Fri­day, was 104-98, with all Democrats and five Repub­li­cans vot­ing “no” in the Repub­li­can-dom­i­nated cham­ber.

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