Commonwealth of Pennsylvania

Recovery Plan

State and Local Fiscal Recovery 

Funds

2021 Report

Prepared by:

8/31/2021
Commonwealth of Pennsylvania 2021 Recovery Plan Performance Report 1

Commonwealth of Pennsylvania

2021 Recovery Plan

Table of Contents

General Overview................................................................................................................................. 2

Executive Summary................................................................................................................................... 2

Use of Funds.............................................................................................................................................. 3

Promoting Equitable Outcomes................................................................................................................ 6

Community Engagement........................................................................................................................... 7

Labor Practices.......................................................................................................................................... 7

Use of Evidence......................................................................................................................................... 7

Table of Expenses by Expenditure Category............................................................................................. 8

Project Inventory................................................................................................................................ 11

Ineligible Activities: Tax Offset Provision ............................................................................................. 11

Appendix: General Fund Financial Statement ...................................................................................... 13
Commonwealth of Pennsylvania 2021 Recovery Plan Performance Report 2

GENERAL OVERVIEW

Executive Summary 

The Commonwealth of Pennsylvania was awarded $7,291,328,098 in State and Local Fiscal 

Recovery Funds (SLFRF) which was received on May 21, 2021, in one tranche. The 

Pennsylvania General Assembly appropriated $4.6 billion of the funds for use in Fiscal Year 

2021-22. The funds were appropriated into six specific uses, all being claimed under the 

revenue replacement (EC6) provisions of the American Rescue Plan Act. 

As of July 31, 2021, none of the appropriated funds had been spent. Spending is expected to 

begin occurring in the quarter ending September 30, 2021, as programs are developed and 

implemented.

The remaining $2,691,328,098 of SLFRF dollars is expected to be appropriated in future fiscal 

years as Pennsylvania lawmakers determine its planned use. 

This report is based on our current understanding of guidance issued by the U.S. Treasury and 

is subject to revision as more guidance is issued. 
Commonwealth of Pennsylvania 2021 Recovery Plan Performance Report 3

Uses of Funds

Per Act 1A of 20211, Pennsylvania intends to use $4.6 billion of SLFRF funds in state Fiscal 

Year (FY) 2021-22 for revenue replacement (EC6) in the following areas:

1. $3.841 billion to be transferred to the General Fund to continue government operations.

2. $5 million to be transferred to the Emergency Medical Services (EMS) Operating Fund.

3. $372 million for Pandemic Response.

4. $50 million to the Pennsylvania State System of Higher Education (PASSHE).

5. $282 million for Long-Term Living Programs.

6. $50 million to the Pennsylvania Housing Finance Authority (PHFA) for Construction Cost 

Relief.

The transfer of $3.841 billion to the General Fund is intended to help pay for the continuation of 

critical services in FY 2021-22. 

In FY 2021-22, total General Fund budget is $38,584,580,000 (approximately $38.6 billion). 

The major areas of General Fund spending include the Department of Education, $14.5 billion, 

and the Department of Human Services, $16.1 billion. Together, these two departments make 

up 79.5% of the state spend in the FY 2021-22 budget. Departments related to the protection of 

persons and property make up another 10% of the state budget. The funds remaining are 

related to departments dealing with economic development, direction and supportive services, 

debt service funds, and other programs.

This fiscal year, with the substantial assistance provided by $3.841 billion transfer of SLFRF 

funds to the General Fund, not only were state government services able to be continued, but 

several new critical investments were able to be made which will help Pennsylvanians recover 

from the pandemic and the disruptions it triggered. See Appendix to see how the transfer is 

reflected in the FY 2021-22 General Fund Balance Sheet.

Within the Department of Human Services, which improves the quality of life for Pennsylvania’s 

individuals and families and promotes opportunities for independence through services and 

supports, the FY 2021-22 budget includes a $2.5 billion increase in state General Fund 

spending.

One of the primary drivers of this increase is Medical Assistance (MA), Pennsylvania’s Medicaid 

program. MA enrollment has increased more than 13% since the start of the pandemic and is 

expected to remain at this higher level throughout FY 2021-22. Funding for other services where 

demand was impacted by COVID-19, such as County Administration, County Child Welfare, 

Early Intervention, Rape Crisis, and Legal Services also received marked increases in the FY 

2021-22 budget.

The Department of Education, which ensures every learner has access to a quality education 

system that academically prepares children and adults to succeed as productive citizens,

1 See Part XXX. COVID-19 Response Restricted Account Federal Appropriations for Current Fiscal Year, 

https://www.legis.state.pa.us/cfdocs/Legis/LI/uconsCheck.cfm?txtType=HTM&yr=2021&sessInd=0&smthLwInd=0

&act=1A.
Commonwealth of Pennsylvania 2021 Recovery Plan Performance Report 4

received historic new investments in the FY 2021-22 budget, with the help of SRFRF dollars. 

The FY 2021-22 budget increased funding for the Basic Education subsidy to school districts by 

$300 million. Of this increase, $200 million was added to the funds distributed through the fair 

funding formula, a bipartisan formula created in FY 2015-16, which considers local wealth and 

equity differences. The other $100 million is being distributed through the newly created “Level 

Up” equity supplement which provides targeted funding for the 100 most underfunded school 

districts. The Level Up supplement will move the state one step closer to equitably funding 

public school districts.2 The budget includes a $30 million increase in funding for high-quality 

early learning for lower-income families. Also receiving critical increases are pre-school Early 

Intervention services ($11 million) and Special Education ($50 million) subsidies to help school 

districts pay for increasing costs. 

In the Department of Agriculture, there was a $3 million increase for the State Food Purchase 

Program and the Pennsylvania Agriculture Surplus System. By making food security a priority, 

boosting farm income, and putting fresh, local foods on the tables of Pennsylvanians in need, 

the 2021-22 budget addresses issues brought to the forefront by the pandemic.3

Within the Department of Health, the 2021-22 budget doubles the funding of State Health Care 

Centers and provided nearly $2 million in new funding for Local Health Departments, both of 

which have been critical in our fight of COVID-19.

The 2021-22 budget allocates $5 million in SLFRF dollars to be transferred to the Emergency 

Medical Services (EMS) Operating Fund to provide grants to EMS providers. These funds will 

be used to replace revenue lost in the fund due to the pandemic. The replacement funds will be 

made available for grants to the overall EMS system which has been on the front lines of the 

pandemic. Allowable uses will include training to underserved rural areas, medical equipment 

purchases for ambulances, and regional councils to develop, maintain, and improve EMS 

systems.

The budget directs $372 million from SLFRF for Pandemic Response. Developed with input 

from the General Assembly, this program will be used for a variety of programs and government 

services in order to create and retain jobs, invest in areas hard hit by the pandemic’s economic 

impacts, and maintain flexibility in responding to the pandemic.

The Pennsylvania State System of Higher Education (PASSHE) receives $50 million of the 

commonwealth’s SLFRF allocation in FY 2021-22. PASSHE is the state-owned system of 

higher education in Pennsylvania and provides affordable higher education to students.

PASSHE will use the funds to strengthen the system’s universities and reimagine how it delivers 

the high-quality services its students deserve. 

The FY 2021-22 budget appropriates $282 million of the SLFLF dollars for Long-Term Living 

Programs to provide assistance to long-term care facilities as they combat COVID-19 impacts. 

These funds will be used to support nursing facilities, assisted living facilities, and personal care 

homes. These facilities have been the hardest impacted by COVID-19. The funds will be

2 https://www.media.pa.gov/pages/education-details.aspx?newsid=1151. 3 https://www.media.pa.gov/pages/agriculture_details.aspx?newsid=1109.
Commonwealth of Pennsylvania 2021 Recovery Plan Performance Report 5

distributed based on bed capacity, occupancy, acceptance of the SSI supplement, and Medicaid 

bed days to ensure that the funds are distributed equally based on impact and need. General 

use of these funds by facilities will support testing, premium pay, lost revenues, and other 

expenses incurred due to the pandemic. Additionally, a small portion of the funds will be made 

available to facilities for improvements to their air quality control to prevent the spread of 

disease.

Finally, the FY 2021-22 budget directs $50 million in SLFRF dollars to the Pennsylvania 

Housing Finance Authority (PHFA) for Construction Cost Relief. The commonwealth has 

authorized the Construction Cost Relief program to provide additional funding to affordable 

housing projects that have been impacted by COVID-19 due to either increased construction 

costs or decreased funding sources due to decreased valuation of low-income housing tax 

credits by investors. This program is designed to fill these COVID-related funding gaps for 

projects currently in construction but not yet completed or projects which have not been able to 

close and start construction due to COVID-19 disruptions. This funding is also secondary and 

will be used to supplement projects that cannot fill gaps from existing sources such as Housing 

Trust Fund monies and other grant awards.

The $4.6 billion in revenue replacement (EC6) SLFRF funds defined above, describes current 

planned uses of appropriated funds. As guidance from the U.S. Treasury is released regarding 

the documentation required for dollars used in the revenue replacement expense category, this 

section will be updated. Future editions of the Performance Report will include more details on 

programs using SLFRF dollars as they are developed in accordance with further Treasury 

guidance. 

As of July 31, 2021, none of the $4.6 billion that was appropriated from the commonwealth’s 

SLFRF allocation had been spent. The remaining balance of SLFRF funds provided to the 

Commonwealth of Pennsylvania (just over $2.6 billion) will be appropriated in future budgets, or 

as specific needs arise.
Commonwealth of Pennsylvania 2021 Recovery Plan Performance Report 6

Promoting equitable outcomes 

The Commonwealth of Pennsylvania plans to distribute SLFRF funds in a fair and equitable 

manner with a focus on serving disproportionately impacted communities. As Pennsylvania 

continues to build spending plans for our revenue replacement programs (EC6), equitable 

distribution will be a constant theme and consideration. At this time, the following intended 

outcomes are anticipated:

• General Fund Transfer ($3.841 billion) – Many General Fund programs, particularly 

regarding education and health care/human services are focused to provide the most 

assistance to those in most need. Notable uses regarding the promotion of equitable 

outcomes are the increases in Basic Education funded with the assistance of SLFRF 

transferred to the General Fund. The $300 million in new Basic Education funding will be 

driven out to either the 100 most underfunded school districts or to all school districts 

based on a formula that distributes state resources to schools using factors such as local 

wealth, poverty, English Language Learners, community differences, local effort and 

capacity, and rural/small district conditions. These funds will help ensure that all students 

in every zip code have the resources they need for a quality education. 

• Emergency Medical Services (EMS) Operating Fund Transfer ($5 million) - These funds 

are intended to develop, maintain, and strengthen EMS, particularly in underserved 

areas. 

• Pandemic Response ($372 million) - The Commonwealth of Pennsylvania will work to 

design programs that consider equitable outcomes in the communities served when

determining how funds will be distributed.

• Pennsylvania State System of Higher Education (PASSHE) ($50 million) - PASSHE’s

focus on using these funds will be consistent with their goals of student and university 

success. These funds will be used to strengthen our universities, and to reimagine how 

we deliver the high-quality services our students deserve. Key to this initiative will be 

specific student support programs, especially as it relates to diversity, equity, and 

inclusion investment.

• Long-Term Living Programs ($282 million) - These funds will be used to assist facilities 

that support seniors and individuals with disabilities. Additionally, particular emphasis is 

placed on providing funding to facilities that accept low-income individuals. By definition, 

these facilities support seniors and individuals with disabilities.

• Pennsylvania Housing Finance Authority (PHFA) ($50 million) – Funding for this 

program will be used to offset costs for affordable housing projects that have been 

impacted by COVID-19 due to either increased construction costs or decreased funding 

sources relative to decreased valuation of low-income housing tax credits by investors.

These dollars will help provide lower income Pennsylvanians with safe and affordable 

places to live.
Commonwealth of Pennsylvania 2021 Recovery Plan Performance Report 7

Community Engagement 

The Commonwealth of Pennsylvania recognizes that tailoring programs and assistance to 

communities is important. Community engagement is something that we will take into 

consideration as we continue to develop our spending plans. Additional details, as developed, 

will be provided in subsequent SLFRF Recovery Plan Performance Reports.

The Commonwealth of Pennsylvania plans to incorporate feedback from constituents, 

community-based organizations, and the communities themselves as funds are distributed and 

programs are created to serve these needs.

Labor Practices 

The Commonwealth of Pennsylvania does not have anything specific to report on labor 

practices, as we do not anticipate any infrastructure projects will be pursued at this time. 

However, the commonwealth affirms that it is committed to all fair labor standard practices 

throughout all aspects of its business. 

Use of Evidence 

The Commonwealth of Pennsylvania will look for opportunities to incorporate program 

evaluations to determine how the use of SLFRF funds provides evidence that communities and 

affected groups are recovering from the pandemic, as applicable. At this time, these 

evaluations have not been developed. As the commonwealth has more information to share on 

the use of evidence, we will provide it in subsequent SLFRF Recovery Plan Performance

Reports.
Commonwealth of Pennsylvania 2021 Recovery Plan Performance Report 8

Table of Expenses by Expenditure Category

At this time, the Commonwealth of Pennsylvania is planning to spend all of its SLFRF funds 

under the Revenue Replacement Expenditure Category (EC6). 

Expenditure Category Cumulative

expenditures to 

date ($)

Amount spent 

since last 

Recovery Plan

1 Expenditure Category: Public Health $0 $0

1.1 COVID-19 Vaccination

1.2 COVID-19 Testing

1.3 COVID-19 Contact Tracing

1.4 Prevention in Congregate Settings (Nursing 

Homes, Prisons/Jails, Dense Work Sites, 

Schools, etc.)

1.5 Personal Protective Equipment

1.6 Medical Expenses (including Alternative Care 

Facilities)

1.7 Capital Investments or Physical Plant Changes 

to Public Facilities that respond to the COVID19 public health emergency

1.8 Other COVID-19 Public Health Expenses 

(including Communications, Enforcement, 

Isolation/Quarantine)

1.9 Payroll Costs for Public Health, Safety, and 

Other Public Sector Staff Responding to 

COVID-19

1.10 Mental Health Services

1.11 Substance Use Services

1.12 Other Public Health Services

2 Expenditure Category: Negative Economic 

Impacts

$0 $0

2.1 Household Assistance: Food Programs 

2.2 Household Assistance: Rent, Mortgage, and 

Utility Aid 

2.3 Household Assistance: Cash Transfers 

2.4 Household Assistance: Internet Access 

Programs

2.5 Household Assistance: Eviction Prevention

2.6 Unemployment Benefits or Cash Assistance to 

Unemployed Workers

2.7 Job Training Assistance (e.g., Sectoral jobtraining, Subsidized Employment, Employment 

Supports or Incentives)

2.8 Contributions to UI Trust Funds*

2.9 Small Business Economic Assistance (General)
Commonwealth of Pennsylvania 2021 Recovery Plan Performance Report 9

Expenditure Category Cumulative

expenditures to 

date ($)

Amount spent 

since last 

Recovery Plan

2.10 Aid to nonprofit organizations

2.11 Aid to Tourism, Travel, or Hospitality

2.12 Aid to Other Impacted Industries

2.13 Other Economic Support 

2.14 Rehiring Public Sector Staff

3 Expenditure Category: Services to 

Disproportionately Impacted Communities

$0 $0

3.1 Education Assistance: Early Learning 

3.2 Education Assistance: Aid to High-Poverty 

Districts

3.3 Education Assistance: Academic Services 

3.4 Education Assistance: Social, Emotional, and 

Mental Health Services 

3.5 Education Assistance: Other 

3.6 Healthy Childhood Environments: Child Care 

3.7 Healthy Childhood Environments: Home Visiting 

3.8 Healthy Childhood Environments: Services to 

Foster Youth or Families Involved in Child 

Welfare System 

3.9. Healthy Childhood Environments: Other 

3.10 Housing Support: Affordable Housing 

3.11 Housing Support: Services for Unhoused 

persons 

3.12 Housing Support: Other Housing Assistance 

3.13 Social Determinants of Health: Other 

3.14 Social Determinants of Health: Community 

Health Workers or Benefits Navigators 

3.15 Social Determinants of Health: Lead 

Remediation

3.16 Social Determinants of Health: Community 

Violence Interventions 

4 Expenditure Category: Premium Pay $0 $0

4.1 Public Sector Employees

4.2 Private Sector: Grants to other employers 

5 Expenditure Category: Infrastructure $0 $0

5.1 Clean Water: Centralized wastewater treatment

5.2 Clean Water: Centralized wastewater collection 

and conveyance

5.3 Clean Water: Decentralized wastewater

5.4 Clean Water: Combined sewer overflows

5.5 Clean Water: Other sewer infrastructure

5.6 Clean Water: Stormwater
Commonwealth of Pennsylvania 2021 Recovery Plan Performance Report 10

Expenditure Category Cumulative

expenditures to 

date ($)

Amount spent 

since last 

Recovery Plan

5.7 Clean Water: Energy conservation

5.8 Clean Water: Water conservation

5.9 Clean Water: Nonpoint source 

5.10 Drinking water: Treatment

5.11 Drinking water: Transmission & distribution

5.12 Drinking water: Transmission & distribution: 

lead remediation

5.13 Drinking water: Source

5.14 Drinking water: Storage 

5.15 Drinking water: Other water infrastructure

5.16 Broadband: “Last Mile” projects

5.17 Broadband: Other projects

6 Expenditure Category: Revenue Replacement $0 $0

6.1 Provision of Government Services $0 $0

7 Administrative and Other $0 $0

7.1 Administrative Expenses 

7.2 Evaluation and data analysis 

7.3 Transfers to Other Units of Government

7.4 Transfers to Nonentitlement Units 

(States and Territories only)

$463,353,820.03 $463,353,820.03
Commonwealth of Pennsylvania 2021 Recovery Plan Performance Report 11

Project Inventory 

As stated throughout this report, Pennsylvania intends to use $4.6 billion of SLFRF funds in FY

2021-22 for revenue replacement (EC6) in six specific areas. These uses are again identified 

here:

• $3.841 billion to be transferred to the General Fund to continue to provide critical 

government services and fund new programs to aid those most affected by the 

pandemic.

• $5 million to be transferred to the Emergency Medical Services (EMS) Operating Fund to 

provide grants to EMS providers. 

• $372 million for pandemic response through the creation of a variety of programs and 

government services (details yet to be determined).

• $50 million to the Pennsylvania State System of Higher Education (PASSHE) to assist 

state-owned universities in providing affordable higher education to students.

• $282 million for Long-Term Living Programs to provide assistance to long-term care 

facilities as they combat COVID-19 impacts.

• $50 million to the Pennsylvania Housing Finance Authority (PHFA) for Construction Cost 

Relief. 

Currently, we are still determining if these uses constitute projects or not. Further guidance from 

the U.S. Treasury on reporting for revenue replacement (EC6) uses will be helpful in this 

endeavor. As our SLFRF supported spending plans and programs are further developed over 

the next few months, we will adapt our reporting into projects as required.

Any additional guidance the U.S. Treasury can provide on how to determine what constitutes a 

project would be greatly appreciated.

Ineligible Activities: Tax Offset Provision (States and territories only)

The Commonwealth of Pennsylvania understands that there are SLFRF spending restrictions 

and affirms it will not use SLFRF funds on activities deemed ineligible.

Item Amount

a. Revenue-reducing Covered Changes -$92,800,000

The FY 2021-22 budget included four changes that are expected to result in a decrease in 

revenue in FY 2021-22 and beyond. The expected reduction is $92.8 million, or 0.2% of 

expected General Fund revenue in FY 2021-22. See the General Fund Financial Statement in 

the Appendix.
Commonwealth of Pennsylvania 2021 Recovery Plan Performance Report 12

Act 24 of 2021, the Fiscal Code, included a waiver of fees that is projected to decrease 

revenues by $1 million in FY 2021.22.4

Act 26 of 2021, which amends the Public School Code of 1949, includes an increase in 

educational tax credits that is projected to reduce revenues in FY 2021-22 by $40 million.5

Finally, Act 25 of 2021, which amends the Tax Reform Code of 1971, includes changes that are 

expected to reduce revenues in FY 2021-22 by $51.8 million. These changes include the 

creation of sales tax exemptions and exclusions, changes to corporate income tax deductions, 

and tax credit changes.6

Act 25 of 2021 also included provisions that increased revenue collections but are not detailed 

here as Treasury guidance had states and territories report only revenue-reducing changes at 

this time.

4 See Section 1727-E, 

https://www.legis.state.pa.us/cfdocs/Legis/LI/uconsCheck.cfm?txtType=HTM&yr=2021&sessInd=0&smthLwInd=0

&act=24. 5 See changes in Section 2006-B. 

https://www.legis.state.pa.us/cfdocs/Legis/LI/uconsCheck.cfm?txtType=HTM&yr=2021&sessInd=0&smthLwInd=0

&act=26. 6 https://www.legis.state.pa.us/cfdocs/legis/li/uconsCheck.cfm?yr=2021&sessInd=0&act=25. Fiscal notes to the 

bill summarize the changes. 

https://www.legis.state.pa.us/cfdocs/billinfo/billinfo.cfm?syear=2021&sind=0&body=H&type=B&bn=0952.
Commonwealth of Pennsylvania 2021 Recovery Plan Performance Report 13

Appendix - General Fund Financial Statement - 2021-22 Enactment