Harrisburg Capitol

The U.S. Treasury Department gives states broad discretion to use aid funding to pick up payroll costs for state employees who spend substantial time responding to the pandemic.

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HARRISBURG — Despite the pleas of restaurant owners, service providers, and other industries, Republican leaders in the House have put forth a plan to use all $1.3 billion in remaining coronavirus relief aid to pay for the state budget.

Details were just beginning to emerge around noon Thursday, but the nearly $35.5 billion plan calls for using the money to fund state-employed public health and safety front-line workers, according to summary materials provided to House Republican members.

The funds would go to agencies including the Department of Corrections, Pennsylvania State Police, and the Department of Health, a spokesperson for the Republican chair of the House Appropriations Committee told Spotlight PA.

The plan also relies on transferring $531 million from special funds — such as $185 million from a worker’s compensation security fund and $100 million from the state’s rainy day fund — to make up lost revenue without increasing taxes or borrowing.

The transfers are needed to make up for an estimated $1.8 billion budget deficit. Lawmakers could vote today on the plan, which reduces spending by roughly 2.2%.

The action comes after outside groups like restaurants, hospitals, social service providers, and public utilities for months have urged Pennsylvania lawmakers to use more of the relief funds to support them and prevent small businesses from shuttering.

Guidance from the federal government says states can’t use CARES Act money as a way of filling in lost revenue. But the U.S. Treasury Department does give states broad discretion to use this funding to pick up payroll costs for state employees who spend substantial time responding to the pandemic. That, in turn, frees up revenues to pay for other expenses.

The list includes public safety, public health, health care, human services, and similar employees.

This story will be updated.

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