Pennsylvania will use $145 million in funds from the Workers’ Compensation Security Fund for a grant program for small businesses affected by the pandemic.
On Dec. 23, Gov. Tom Wolf said the money would then be allocated by the Pennsylvania General Assembly. However, the legislature has yet to act on the proposal.
Some are questioning the proposal and feel there might be a better way to help the business community.
“While in theory, of course, we need to be supporting our small businesses right now, there are other ways to do that rather than borrowing against the fund, which has already been used this year to balance the budget,” said Gina Severcool-Suydam, president of the Wyoming County Chamber of Commerce.
The Pennsylvania Workers’ Compensation Security Fund is paid for by businesses. It was set up in 1937 to fund workers’ compensation claims.
In a news conference in mid-January, Wolf chastised House GOP lawmakers for holding up the funds, arguing the state needs to find a way to get the money into the hands of business owners that need it most.
Gene Barr, the president of the Pennsylvania Chamber of Commerce, said while they appreciate any ‘good faith effort’ on behalf of the state, there should be a different way forward.
“At the same time, it’s important to recognize the essential purpose of the Workers’ Compensation Security Fund — which is financed by the business community — is to support injured workers and note it has already been drawn upon to help balance the current state budget,” he said in a statement.
Figures provided by the Wolf Administration said since the pandemic began, the state has provided more than $525 million in relief to small businesses. That’s in addition to cash from the federal government through the CARES Act and the Paycheck Protection Program.
Robert Carl, president of the Schuylkill County Chamber of Commerce said they’d like as much support for small businesses ‘as possible,’ he said there’s concern with the proposal.
“While the announcement was made, there’s no criteria in place of how to go about getting the money,” he said. “We’re already getting calls about how to apply.”
Carl said he worries about the money coming from the workers’ compensation fund.
“You don’t want that funding depleted,” he said. “There’s an automatic trigger in the Workers’ Compensation Security Fund that when it goes down to a certain level, an automatic taxation occurs to get it back to a certain level. While the governor may see it as a way to get money to small businesses, we’re questioning the technical difficulties that need to be worked out.”
Bob Durkin, president and CEO of the Greater Scranton Chamber of Commerce said some of the CARES Act funding never made it ‘to the streets.’
Some of the money went to a lending program, whereas it should have gone to the Small Business Assistance Grant Program, he argued.
“We hope that the governor and the legislature can recognize how important it is to use those dollars in a way that helps struggling businesses,” he said.
Durkin said it’s hard to put a dollar amount on just how much is needed for the recovery.
“We’ve helped hundreds of businesses in a nine-county area to get access to grants since the pandemic began,” he said.
However, Severcool-Suydam said there are things the state could be doing that could really help faster than checks or grant money.
“I think there are restrictions that could be loosened at this point that would help our small businesses,” she said. “They want to make some money themselves. Not all small businesses would need additional grant funding if some of the restrictions were lifted a bit and they could back to work.”
“We’re approaching the 11th month of the pandemic,” said Carl. “Small businesses need as much help as they can. We think the best way to approach this is a collaborative effort between the governor, his administration, the state legislature and those organizations representing business.”