Stimulus Cash Will Begin Flowing to Pa. in Late Spring

Fri February 27, 2009 - Northeast Edition
Marc Levy - Associated Press




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, Pennsylvanian 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 Pennsylvanian 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 Feb. 19 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.