It wasn’t long into the COVID-19 pandemic before it became apparent that for some Americans, providing for the necessities was going to become increasingly difficult. Lockdowns, stay-at-home orders, and social distancing forced many businesses to furlough workers temporarily; other workers received pink slips early on, as smaller businesses that relied heavily on face-to-face commerce (restaurants, retail stores, etc.) shuttered permanently.
Even workers who were able to make ends meet through unemployment payments or who were fortunate enough to return to work found themselves playing “catch up” with their bills—with utilities being chief among those, particularly as we headed into Winter. While moratoria on shut-offs for nonpayment of utility bills provided customers some relief, their expiration some months ago and the fiscal impracticality of extending them forced many customers into arrears.
In the face of an ongoing coronavirus pandemic in 2021, continued financial uncertainty, and millions of energy consumers still behind on their payments, consumer advocates and politicos alike began appealing to the government for relief.
The State Responds
On Feb. 5, Pennsylvania Gov. Tom Wolf signed legislation approved by state lawmakers that will provide over $900 million in aid for hard-hit hospitality businesses, private schools, and people struggling to pay rent or utility bills as a direct result of the pandemic. With this measure, advocates expect the disbursements will not carry some of the federal and state qualifiers that were part of the rollout of the first round of pandemic aid last year.
“Business owners and employees have worked hard to protect their customers and their communities during this pandemic, and I thank all of those who have prioritized health and safety despite the hardship of the past several months,” Gov. Wolf said. “Workers and consumers have been forced to make sacrifices because of COVID-19 and they need and deserve our support.”
The bill also includes a provision calculated to remove any uncertainty over whether federal pandemic aid (including Paycheck Protection Program loans and direct federal payments to taxpayers) is taxable as income in Pennsylvania. Under the bill, the payments are not taxable, despite the Department of Revenue’s concerns that the loans will be taken as deductions and amount to a $220 million shortfall in state tax collections. Most of the $912 million being allocated in federal aid were approved by Congress in December.
A portion of the funds will be derived from a state worker’s compensation fund that the governor asked lawmakers to send to businesses hardest hit by the pandemic. Around $197 million is slated to be sent to private schools and other educational institutions that did not get any of the $2.2 billion in federal coronavirus aid that public schools and charter schools are receiving from Congress.
The lion’s share of the funds, $570 million, will be divided up among Pennsylvania counties to help residents struggling to pay rent or utilities. Landlords, utilities, and tenants will be able to apply, with priority being given to lower-income households or those where someone has suffered a job loss.
The Need is High
According to Pennsylvania Real-Time News, 16 Pennsylvania counties and the city of Philadelphia were eligible to apply to the U.S. Treasury Department for direct aid and get a share of the state’s total allotment of about $850 million.
Another upside: The new federal aid can be applied to bills over a longer period. Renters can qualify for 12 months of bills (including past months), and counties will be able to use up to 9% for program costs, such as hiring help to process applications and to get the word out about the availability of payments to renters and landlords.