Rescue act

What the American Rescue Act Means for Philadelphia

Congress ultimately passed the $ 1.9 trillion American Rescue Act, a landmark piece of legislation that will provide massive economic assistance to households, businesses, and state and local governments, along with many other significant changes across the board. world is still unpacking.

Urban Institute analysis estimates the combined changes will reduce the number of people living in poverty in 2021 from 44 million to 28 million, and halve child poverty.

One of the issues we’ve tracked when it comes to Philadelphia is state and local aid, as the Kenney administration forecast a budget gap of $ 450 million ahead of this budget season, having had to close a gap of about $ 750 million last year.

We now know that Philadelphia will receive over $ 1.4 billion in federal aid, which is roughly $ 200 million more than the combined shortfall in 2020 and 2021. That leaves the city at about our revenue. 2019 and will allow Mayor Kenney to reinstate significant service cuts. . At the same time, Build Back Better is the name of the game in 2021, so we shouldn’t just copy and paste Budget 2019 and restore everything exactly the same, and there should be a vigorous debate this year on what our priorities should move forward.

Broken in the philly logoHowever, it’s not just a free game with these earnings. Based on the PA House Appropriations Committee’s detailed breakdown of Pennsylvania’s allocation, these are the guidelines that governments must follow that are much more flexible than under the CARES Act.

  • Respond to the Covid-19 pandemic and its economic effects
  • Loss of revenue for the provision of government services due to Covid-19 compared to revenue received in the last full fiscal year before the emergency
  • Premium of up to $ 13 per hour above regular wage for workers performing essential work
  • Water, sewer and broadband infrastructure
  • Prohibited uses: Directly or indirectly compensate for a tax reduction
  • Pension funds
  • Funds must be used by December 31, 2024

The $ 1.4 billion figure for Philly is also just the money we get from the municipal side. According to a press release from Congressman Dwight Evans, schools in Philadelphia are expected to receive an additional $ 1.8 billion alone, to be spent over the next two and a half years. For context, the state of Pennsylvania spends approximately $ 7 billion each year on education for the entire state, so this is a massive and one-time injection for the school district.

WHYY’s Avi Wolfram-Avent says districts across the state are scrambling to figure out how to spend the money properly on a tight deadline before September 2023.

Because of the way the federal money will be distributed, schools and districts serving more students in poverty will receive a greater share of the money per student.

The stimulus bill is not particularly prescriptive. He says districts should use at least one-fifth of the money “to deal with the learning loss,” although this focus is quite broad. For the rest of the money, local elected officials will have even more leeway […]

Already in Philadelphia and elsewhere, there is talk of expanded summer programs and after-school tutoring to help students regain lost ground.

[PCCY Director Donna] Cooper thinks schools should be spending the vast majority of federal money on these types of interim interventions, interventions aimed at helping the students most affected in the past year.

She envisions districts hiring fleets of well-paid short-term contract workers who would act as class assistants, freeing up class instructors to work with students in small groups.

This is an incredible problem compared to what could have been this year, and we will continue to share updates here as we learn more about the contents of the bill.

The Citizen is one of 20 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push for economic justice. Follow the project on Twitter @BrokeInPhilly.


Jon Geeting is the Director of Engagement at Philadelphia 3.0, a political action committee that supports efforts to reform and modernize the town hall. This is part of a series of articles published on both The Citizen and 3.0 Blog.

Photo by Deval Parikh / Unsplash