Stimulus may give Pa. $10 billion over 2 years

HARRISBURG - When federal stimulus aid begins rolling in to the states, Pennsylvania could collect as much as $10 billion over two years and potentially billions more in tax breaks, according to preliminary figures from some congressional offices.

Out of the total pot, Pennsylvania would get at least $4 billion for Medicaid; $1.5 billion for roads, bridges, mass transit, and other infrastructure investment; and $115 million for police officers and crime-fighting.

But members of Pennsylvania's congressional delegation said yesterday that the aid numbers were fluid. For example, they said the state would collect $2.3 billion for schools over two years. But the Congressional Research Office put that figure at $2.9 billion.

U.S. Rep. Allyson Y. Schwartz (D., Pa.) said it was impossible to determine exactly how much Pennsylvania would ultimately receive in certain areas because a large percentage of the money would be distributed in various forms, such as direct grants, bonds, and through complex funding formulas. She also said it was impossible to know how many people and businesses would take advantage of the array of tax credits and rebates in the proposal.

Pennsylvania could benefit from close to $9 billion in tax benefits, according to one independent estimate. They would include $2,500 tuition-tax credits for college students, $8,000 in tax credits for first-time home buyers, $100 in unemployment insurance benefits for one million unemployed people, $800 rebates for an estimated four million working families, and $250 for Social Security recipients and the disabled.

The compromise package cleared the House yesterday and received Senate approval last night.

Gov. Rendell said yesterday the legislation would include enough funding to help patch a $2.4 billion hole in this year's budget and avert deeper budget cuts and layoffs.

Congressional Democrats said swift passage of the stimulus measure was vital to help revive the state's economy, which lost at least 75,000 jobs in the last year.

"There is a grave threat to our economy," U.S. Sen. Bob Casey Jr. (D., Pa.) said in a conference call with reporters. "We're staring down a gun barrel and families don't have the luxury of waiting."

Casey and other Pennsylvania Democrats said the impact would be felt immediately across the state, with potentially thousands of government jobs saved and hundreds of people hired to work on the first wave of projects.

"This will slow the hemorrhaging of jobs," said U.S. Rep. Joe Sestak (D., Pa.), who cautioned that the jobless figures might continue to rise for six months before they improve. "The secondary impact is the creation of jobs."

Asked how she would measure whether the stimulus was working, Schwartz cited Rendell's warning last week that a smaller stimulus package could force thousands of more state layoffs and increase the prospect of higher local taxes.

"The state said it would have to lay off 2,000 we just saved," she said. "If doing heavy [construction] projects was off the table, that will now be getting done. We can count those jobs."