The Recovery Act is a mix of appropriations (almost $500 billion) and tax provisions (almost $300 billion). The largest category of appropriations is for State Fiscal Stabilization Fund and State Fiscal Relief for a total of $144 billion in health and education funding, including $54 billion for K-12 and higher education funding. The states were the clear winners in the allocation of Recovery Act dollars and Pennsylvania in particular was able to fill gaps in the state budget with these Federal funds.
There are real opportunities in the Recovery Act for Philadelphia; however, most funding will not be able to be used to balance the City’s budget. Many of the titles through which the money will flow contain provisions that prevent Federal funding from being substituted for existing local funds such as the Community Development Block Grant (CDBG). Others have conditions that make them difficult for the City to use under the requirements of the balanced Five-Year Plan, such as COPS. And still other titles will flow through competitive or discretionary grant making, either directly from the Federal government or through the Commonwealth. All of these factors make the Recovery Act an uncertain and complex foundation for budgeting.
The appropriations section of the Recovery Act contains 198 funding opportunities managed by 29 federal departments and agencies. The totals by Federal department are listed on the left.
The funding details of the Recovery Act remain a work in progress. Some formula allocations are being adjusted through waivers (e.g., Department of Justice programs) or new interagency agreements (e.g., Housing and Urban Development and Department of Education). The City expects guidance from Federal agencies throughout March and April on eligibility and allocations, and application deadlines will begin in May. The most defined areas to date relate to funding realms (e.g., education and transportation) that affect our local partners more than the City of Philadelphia (e.g., The School District and SEPTA.)
However, the Administration has made some estimates of local funds that the City may expect through formula allocations and that it may seek as competitive or discretionary grants. This filter allows the City to focus for present purposes exclusively on those funding opportunities for which the City government is an eligible applicant. So far, $82.5 million in five formula allocations have been identified. However, many of these contain provisions that prevent Federal funding being used as a substitute for existing funding.
In addition to these formula grants, the Administration has identified 17 competitive or discretionary funding opportunities for which the City is an eligible applicant. These funds cannot be counted on in the budget process because there is no guarantee that the City may win the funding.
In addition to these funding opportunities for General Fund operating departments, there are opportunities estimated to yield up to $120 million in Capital funding for the Water department. The exact allocation will be determined over the new few months. And finally, there are funding opportunities available to non-City entities that will create value for the City including:
All Recover Act funding opportunities will become clearer over the coming weeks and months.