2009-02-26 / Front Page

Stimulus Cash Will Begin Flowing To Pa. In Spring

By Marc Levy ASSOCIATED PRESS WRITER

HARRISBURG, Pa. (AP) - Most benefits of the federal stimulus package - tax breaks, cash payments and major transportation and water projects _ won't be felt in Pennsylvania before spring.

But many details are becoming clear.

One is the timing of $250 payments that about 3 million elderly and disabled residents will receive. The Social Security Administration said it will issue those one-time payments by late May by check or direct deposit.

Also, Pennsylvanians who have lost jobs may already qualify for special help paying for health coverage.

Most people laid off after Sept. 1 are eligible for a 65 percent government subsidy of their COBRA benefit, the health care insurance that terminated workers may continue at full cost through their former employers. The subsidy lasts for up to nine months and can be applied for 60 days after they're notified of their eligibility.

Gov. Ed Rendell's administration estimates Pennsylvania will receive $16 billion over three years - and possibly more because states can compete for additional education and infrastructure grants.

Rendell, a Democrat, wants to use about $5 billion to balance the state's budget over the next three years. Several billion more will go to schools and transportation projects, while millions of Pennsylvanians will get tax breaks or bigger benefits because they're poor, elderly, disabled or unemployed.

Some details about how the money in President Barack Obama's $787 billion stimulus package will trickle down to state and local agencies in Pennsylvania as well as contractors, schools and residents are still being sorted out.

For instance, the Internal Revenue Service could not say Thursday when most taxpayers can expect to see their federal income tax withholding shrink as a result of the highly publicized $400 tax break most people will get.

But contractors involved in water, sewer and transportation work could be very busy in the next few months. Many projects already through the engineering and design phases but awaiting the money to start construction could see new life because of the federal funding injection.

The Pennsylvania Infrastructure Investment Authority, which typically helps finance $300 million annually in loans for water and sewer projects, stands to receive an extra $218 million in stimulus money, which could be distributed by April 20.

"Even with this, there's still a lot of demand out there,'' said executive director Paul Marchetti, who noted that estimates of Pennsylvania's water and sewer maintenance needs run in the tens of billions of dollars.

It's possible half the money will go out as loans and the rest in grants, he said.

The Pennsylvania Department of Transportation is weeks away from drawing up a final list of highway, bridge and mass transit projects that will get funding.

PennDOT is working with the state's 23 regional transportation planning groups to decide how to spend the $1 billion in stimulus money the state anticipates for highways and bridges, spokesman Rich Kirkpatrick said. Rendell has said he believes some projects could begin in a few months, although the state still needs billions of dollars more just to address the deplorable condition of its aging bridges.

The state's biggest transit system, the Southeastern Pennsylvania Transportation Authority, expects about $170 million, a nearly 50 percent increase in its capital budget, to help it whittle down a long list of maintenance projects.

In anticipation of the money, SEPTA has tapped dozens of ready-to-go projects. On Friday, SEPTA plans to meet with contractors to make them aware of projects it wants to put to bid this spring.

For low-income residents who want to cut their home heating costs, there will be more than $250 million to weatherize homes over the next two years. That's a fivefold increase over this year's dollars, and it gives state officials the task of finding more people who want their homes weatherized and enough trained workers to do the job.

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