Governor Wolf, let’s find a better way to spend $500 million
Governor Wolf is proposing to send $500 million from the state’s American Rescue Plan (ARP) allotment to Pennsylvania households with some to receive as much as $2,000, presumably based on income. With 5.1 million households and a median income of $59,000, that means 2.5 million households are under $59,000 in annual income. So, if the payouts were given to families under the median, the average payment could be only $200. If extended to include families above the median, the average payment would be under $200.
To make the payment truly meaningful—say $500 to $1,000—the payments would have to be limited to households with far less than the state’s median income of $59,000.
And to devise a distribution scheme that accounts for all the factors that could reflect worthiness to receive will be a nightmare. Simply looking at income will not tell the whole story. Some older households might own their homes and have significant savings. Some households with higher incomes might have huge expenditures for health-related issues not covered by insurance.
But beyond those difficulties of deciding who will get and how much that will inevitably create inequities, there is the question of the wisdom of even trying. There are households with the same annual income in which members are working and have large gasoline bills in getting to work while others at the same level of income have no members who are working or driving to a job but are receiving substantial public assistance. Inevitably, there will be inequities in the distribution.
One thing is certain, pouring millions into the economy will inevitably bolster inflationary pressures. An unintended consequence that will make all Pennsylvanians even worse off.
So why even bother?
The state has other pressing needs. There are streets, roads and bridges that need repair or upgrades. The Turnpike Commission has huge debt obligations incurred to meet the requirement of giving PennDOT hundreds of millions of dollars for years. Why not reduce that debt and enable the turnpike to lower its tolls? Why not cut the income tax for a year? Or better yet, reduce the motor fuel tax to lower fuel costs for hard-hit Pennsylvanians.
Use of the ARP dollars should be done in a way that permanently improves the economic conditions for the state at large. Doling out dollars in a haphazard manner will do nothing but attempt to influence voters. It is bad policy and should not get a single vote in the Legislature.