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Gov. Tom Wolf on Wednesday proposed spending $145 million in reserves from a worker's compensation fund to help the hardest-hit businesses cope with the raging coronavirus pandemic.
The Democratic governor's plan requires a vote from the Republican-majority Legislature to appropriate the money, and there has been no deal to accomplish that.
Wolf said he wants the money to go out in the form of grants to businesses that have been most harmed by the COVID-19 pandemic, among them restaurants, bars and gyms.
During an online news conference, Wolf said people were worn out by the pandemic, even as vaccines are starting to be administered.
“The only thing I can think of is do what this $145 million is focused on doing. I’m hoping the General Assembly will agree, to get this money into the hands of those businesses, the folks who need it the most,” Wolf said.
House Republican spokesperson Jason Gottesman blamed Wolf's policies for the pandemic's effect on businesses and urged him to lift those restrictions. It's unclear whether legislative Republicans will bite on the governor's idea; the General Assembly returns to work early in January.
“From where does the money come from, that needs to be sorted out,” said Rep. Dave Zimmerman, R-Lancaster. “And with any kind of plan to bail out restaurants, we need to get them back into business so they can help themselves going forward as well. It’s got to be a two-tiered approach.”
Republican lawmakers have repeatedly sought to lighten or block restrictions imposed on businesses by Wolf this year, but have been met with vetoes or losses in court.
Wolf said Wednesday he does not plan to revisit a three-week ban on in-person dining at restaurants, plus orders to close gyms, casinos and theaters through Jan. 4 to try to blunt rising infections, hospitalizations and deaths. To ease some of the pain, the administration waived liquor license fees for restaurants and bars.
Melissa Bova, the vice president of government affairs for the Pennsylvania Restaurant and Lodging Association, said the industry will ultimately need more than $145 million, and that 50% of her organization’s members will close in 2021 without financial assistance.
“It’s a step in the right direction ... and we need the Legislature to now come together and finally help this industry," Bova said.
The money is in the Insurance Department’s Worker’s Compensation Security Fund, financed by premiums on workers’ compensation insurance policies to ensure claims are paid if an insurer becomes insolvent. Wolf and lawmakers recently tapped into the fund for $185 million to balance the deficit-ridden budget in November.
At one point, Republicans proposed using $250 million in federal coronavirus relief aid to help bars and restaurants, while Democrats proposed $100 million from the aid. Ultimately, Wolf and Republican lawmakers agreed to use the federal aid to balance the budget in November.
In the first shutdown during the spring spike in cases, bars and restaurants had federal paycheck protection loans to help them. Now, they have nothing, Bova said. While Congress approved a new round of paycheck protection loans in legislation Monday night, it isn't enough, Bova said.
In Pennsylvania, the leisure and hospitality sector, which includes bars and restaurants, has been the hardest-hit industry, based on state payroll data. Through November, sector payrolls remained 25% lower than they were before the pandemic in February.
Senate Democrats this month proposed borrowing money to underwrite a $4 billion pandemic relief package, with $800 million set aside for business assistance. Sen. Vincent Hughes, D-Philadelphia, backed Wolf's effort to use the $145 million for businesses.
“We are nearly 10 months into the most devastating public health crisis of our lifetime,” Hughes said in a statement. “It is time for Pennsylvania’s General Assembly to do more to help its people.”
House Democratic leaders also pledged support for Wolf’s plan. They also said they plan to introduce legislation to reverse the use of $108 million in what they said was federal housing aid that went to prop up the state’s prisons budget.
They want to use the money to help renters, homeowners and small landlords.
“We know that businesses can’t succeed without customers, and people who are forced to put most of their income into housing expenses can’t afford to be customers," House Minority Leader Joanna McClinton, D-Philadelphia, said in a statement.