The Morning Call
$1.3B of relief funds to plug budget gap
Restaurants, taverns others lose out in Pa. lawmakers’ vote
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.”
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.
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.