Pa. may turn down $273 million in stimulus aid

By Tom Infield

Inquirer Staff Writer

The federal government is offering $273 million in stimulus funding to help more Pennsylvanians qualify for cash unemployment benefits.

But four months after the offer was made, the legislature has not taken the money. And there is no certainty it ever will.

Republican leaders and business groups - in Pennsylvania and some other states - object that the funding would come with unacceptable strings attached.

Pennsylvania would have to slightly modify its law governing how long and how steadily a person must have worked to qualify for aid. When the stimulus money runs out, opponents say, the state would be left paying the more liberal benefits on its own - about $69 million a year, at current jobless rates.

To Democratic leaders and their allies in organized labor, it makes more sense to take the money now - when thousands of Pennsylvanians are losing their jobs each month - and worry later about the long-term cost.

They say the $69 million is a relatively minor amount, anyway, for an unemployment fund that spends $2 billion to $3 billion a year, depending on the economy.

Democratic State Rep. Marc J. Gergely, acting chairman of the House Labor Relations Committee, called the stimulus offer "free money."

Gergely said that, within a week or so, he would introduce a bill to take advantage of the funds. But he said he did not expect action soon.

"Why wouldn't we want $273 million for the families of Pennsylvania?" said Gergely, who represents an old steel area in the Monongahela Valley near Pittsburgh. "This isn't for luxuries. It's for basic necessities."

New Jersey, the first state to qualify for the money, received $207 million March 27 and is using it to help the unemployed.

So far, 31 states have qualified for at least a portion of the money, which totals $7 billion nationally.

(Additional stimulus funding has extended the period in which laid-off workers can collect benefits. The maximum is now 72 weeks.)

Some Republican governors said early on that they would not amend their eligibility rules. But as jobless rolls have grown, some have overcome their reservations.

A dozen states have changed their laws: Arizona, Arkansas, California, Idaho, Iowa, Kansas, Minnesota, Montana, Nevada, Oregon, South Dakota, and Wyoming.

Nineteen states, including New Jersey, already had unemployment-compensation rules that pretty much met the federal requirements.

In Pennsylvania, Gov. Rendell supports taking the money, but he has not made it a front-burner issue. He has spent more of his political capital on his dispute with Republicans over the state budget, which must be adopted by June 30 to keep state government in operation.

"There are a lot of big issues, and this is one of them," said Ken Snyder, Rendell's chief spokesman for how the state will handle the $9.4 billion, overall, that it expects to receive from the stimulus package, formally known as the American Recovery and Reinvestment Act.

"This is too big to let fall between the cracks," Snyder said. "It's not often the federal government puts hundreds of millions of dollars on the table and says, 'Here, go help people.' Not to take advantage of that doesn't make sense."

Snyder said the stimulus rules would qualify 28,000 more people to collect benefits in Pennsylvania.

Another of the "big issues" that Snyder referred to is the ill health of the state's Unemployment Compensation Trust Fund, which is financed by payroll taxes.

Page: 1 of 3 View All

1 | 2 | 3 Next»

CURRENTLY SHOWING ON PHILLY.COM