Pennsylvania Democrats are unveiling a $4 billion pandemic relief plan to aid small businesses, frontline workers, and 'vulnerable' residents.
Read about the plan here.
Democratic leaders said the 'Pennsylvania Coronavirus Aid, Relief, and Economic Security Act of 2021,' otherwise known as PA CARES 21, authorizes the commonwealth to issue $4 billion in emergency debt to fund previously existing aid programs and establish new programs to help struggling Pennsylvanians and the economy.
Here is how some of the plan breaks down:
Pennsylvania Democrats plan to pay for the annual debt service in a variety of ways including:
- Liquor Control Board revenues
- Gaming revenues
- Dedication of Personal Income Tax or Sales Tax revenues
- The recently enacted budget included a one-time transfer of $200M in PIT revenue to the Property Tax Relief Fund. Beginning next year, that same amount can easily be shifted to debt service payments for this program
"None of this will cause a tax increase. I want to be real clear on that. We're not going down that path," said democratic Sen. Vincent Hughes of Montgomery & Philadelphia.
But, Republicans claim the plan would burden taxpayers by putting them in a position to pay off a long-standing debt.
"Democrats spent 45 minutes selling Pennsylvanians what amounts to a bill of goods that would burn them for generations while trying to pay off this debt," said Jason Gottesman, Press Secretary to the House Majority Leader.
Sen. Hughes admits the state would need to rely on borrowing to finance the program. But, he said interest rates are historically low right now and the state could capitalize on that.
"The borrowing to finance this program would be less than one and a half percent interest rates on a 20-25 year note," he said.
Gottesman countered, "borrowing at any interest rate is in effect putting the taxpayers, you know, on the hook to pay for that."
But Democrats argue people need help now. Plus, they said the only way Pennsylvania will see a payoff for the economy is by investing in the people of Pennsylvania. They also argue the state budget does not go far enough.
"Democrats are concerned about the overall economic consequences to the Commonwealth. We're just more realistic," said Sen. Sharif Street of Philadelphia.
Gottesman said, "I would say in the budget that we just passed which carried democrat support which was signed by Tom Wolf, the Governor, that we did invest in people. We targeted the remaining cares act dollars to front line workers and public health and safety."