Brewster proposes state stimulus package

By JEFF STITT

jstitt@yourmvi.com

State Sen. Jim Brewster sent a letter Monday to Gov. Tom Wolf urging him to call on state lawmakers on both sides of the political aisle to create a stimulus package in response to the economic blows caused by COVID-19.

Brewster wants Democrats and Republicans alike to consider his multi-point stimulus proposal that is “focused on workers and small business that is critical to fill gaps in national recovery efforts once health risks subside.”

The McKeesport Democrat also reached out to state Senate Democratic caucus leader Sen. Jay Costa of Forest Hills to advocate for his plan that among other things, suggests the creation of an “unemployment compensation booster.”

Brewster said a “booster,” also referred to as a “kicker,” in the form of “direct monthly payments” to workers who lost their jobs as a result of closures and layoffs during the coronavirus pandemic, “should be an integral part of the economic recovery plan.” 

He suggests monthly payments of $100 to $200. 

Asked how long the state would need to issue the booster payments to the unemployed, Brewster said “that’s what we don’t know.” 

“The time length of the program and the costs of this would depend on how quickly we can get the virus under control and how quickly we’ll be able to open the doors for businesses,” Brewster said.

“Our current unemployment compensation program will provide a brief, but insufficient respite for workers,” Brewster wrote in his letter to Wolf. “While UC will help and the now-evolving federal stimulus efforts will likely bolster our UC program, it will not be enough to provide long-term family-sustaining compensation.

“Extreme pressure will be placed on the system from the tens of thousands of displaced workers. Given the strain on the system, we must explore additional ideas to respond to needs of working men and women.”

Brewster is encouraging Congress to adopt a federal stimulus, but he thinks that even when that happens there will be “gaps in the federal effort and that is where the state has a role to play.”

He wants a “robust” state assistance package created for “essential consumer businesses that have remained at work but have lost huge amounts of revenue during the shutdown.”

“This includes dine-in restaurants that have become drive-through services, media companies reliant on advertising from forced-closed business establishments and others that have remained open yet have absorbed losses from the pandemic. We cannot forget them in the recovery,” Brewster said.

The senator wants fellow lawmakers to discuss the possibility of creating short-term “bridge grants” for currently closed small businesses “to get business up and running as soon as possible and cover near-term expenses.”

“Once the immediate financial crisis period is over, providing additional assistance to qualifying small business can be in the form of zero-interest or very low-interest loans,” Brewster said.

He said special tax provisions should be created that would allow small businesses to expand net loss carryforward to deal with long-term impacts, cover taxes and help reduce future pandemic-related tax liabilities. 

Loss carryforward refers to applying the current year’s net operating loss to future years’ net income to reduce tax liability. Usage of the accounting technique results in lower taxable income in profitable years and reduces the amount the company owes the government in taxes.

To pay for his proposals, Brewster suggests expanding or repurposing Pennsylvania’s bonding capacity with new financing through either the Commonwealth Financing Authority or another bonding authority that has funds immediately available for grants. 

He said the state could also “sweep unencumbered general fund and special fund accounts to finance recovery efforts” and eliminate, postpone or repurpose a percentage of planned discretionary spending for programs that “maybe aren’t immediately needed right now and that may be able to be delayed or temporarily suspended for six, eight or nine months.”

“We need to prioritize what is important today,” Brewster said, adding that he isn’t proposing exhausting fund balances.

“It’s really a fine-tuning of the budget. There could be discretionary funding in the budget that has been there a while that is unused at the moment,” he said.

Brewster’s plan calls for the naming of a “Pandemic Recovery Czar” to coordinate the response and the distribution of funding through a single contact point in state government. 

He points out that a recovery czar was “effectively utilized by the federal government during the financial crisis a decade ago and has been a successful model for coordination of government services during past crises.”

Looking toward life after the pandemic, the senator said he would also like to “push state funds out now to fund water, sewer, transportation and community improvement projects.”

He said doing so “would not only generate work directly in construction but also require supply chains to ramp up hiring to fill commodity requirements.”

Brewster said he began developing the stimulus plan proposal about a month ago and that he was on the phone throughout Tuesday calling fellow Democrats to seek support for his proposal.

“I want to see Democrats, Republicans and the governor working together on this,” Brewster said. “I’m hoping this will get the conversation going and that my colleagues on the opposite side of the aisle will have input and some well thought out amendments once this goes out for bipartisan sponsorship.”

Brewster said the state Senate will be in session today and he plans to discuss his proposal with colleagues.