Pennsylvania's Business Shutdown Waiver Program Gets Audited

Apr 30, 2020

Gov. Tom Wolf's business shutdown waiver program is being audited amid complaints it was managed unfairly, Pennsylvania’s chief fiscal watchdog announced Thursday.

Auditor General Eugene DePasquale said he is investigating how the Department of Community and Economic Development ran the waiver program, under which tens of thousands of businesses applied to remain open during the pandemic.

In March, Wolf, a Democrat, closed businesses deemed “non-life-sustaining" to help slow the spread of the coronavirus, which has sickened more than 45,000 Pennsylvania residents and killed nearly 2,300. Wolf said Thursday that he welcomed a review by the auditor general’s office, headed by DePasquale, a fellow Democrat who is running for Congress this year.

The pandemic and the state’s efforts to contain the virus have caused economic devastation, throwing nearly 1.7 million Pennsylvania residents out of work since mid-March.

“During this pandemic, obviously our economy has taken a huge hit. The question we need to find out is, could more businesses have been opened?" DePasquale said in a video news conference. "And was this done in a fair process?"

Many businesses have complained about a process they contend has been slow and arbitrary. Senate Republicans had been pressing for an audit, and Wolf agreed to it, according to DePasquale.

“A lot of businesses do believe it was cumbersome and not fair. That's their point of view and we’re going to investigate their claims,” DePasquale said.

In a separate telephone news conference, Wolf offered a vigorous defense of the waiver program.

Pennsylvania was possibly the only state to allow businesses to appeal their designation as either essential or nonessential as governors across the country ordered shutdowns, Wolf said.

The waiver process, he said, was done in an attempt to make the state’s shutdown more open and transparent, giving businesses the chance to make their case to a team of employees in the Department of Community and Economic Development.

All told, out of about 1 million businesses in Pennsylvania, about 1% applied and were denied, Wolf said.

“We tried to do right thing,” Wolf said. “Were some mistakes made? Maybe. And if they were, then the folks in Pennsylvania have every right to know about that. I think the auditor general is in a really good position to determine whether that in fact happened.”

More than 42,000 businesses applied for exemptions by the April 3 application deadline. Over 6,000 had been approved through Wednesday, while more than 13,000 applications were denied. Thousands more businesses applied for waivers that didn’t need them to stay open, according to state officials.

Wolf recently announced he is loosening some restrictions as the virus threat begins to ebb. On Friday, golf courses, marinas, guided fishing trips and privately owned campgrounds will be allowed to reopen, and construction will be allowed to restart.

Wolf also plans to gradually begin easing stay-at-home orders on May 8 in lightly impacted regions of the state.

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HELP FOR HOSPITALS

More than 30 Pennsylvania hospitals got $324 million in emergency state aid to help support them during the early stages of the pandemic, the Wolf administration said Thursday.

Hospitals lost revenue as they canceled elective surgeries and appointments, while also spending enormously to get ready for a surge in coronavirus patients.

The state's Hospital Emergency Loan Program, or HELP, is providing hospitals with short-term low-interest aid diverted from unused funds originally set aside for water and sewer infrastructure projects.

The money is expected to be repaid, with interest, by the end of September after hospitals receive federal aid authorized in legislation signed a month ago by President Donald Trump.

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PEOPLE WITH DISABILITIES

An umbrella group of Pennsylvania organizations that serve people with intellectual disabilities and autism say severe funding and staffing problems could lead some to shut down in the coming weeks.

The care providers face high turnover and job vacancy rates in normal times, and those issues have been exacerbated by the COVID-19 pandemic, according to Mark Davis, president of Pennsylvania Advocacy and Resources for Autism and Intellectual Disability.

Davis said “it’s not an idle threat” that some may close down because they are running out of money and because congregate care programs that serve their clients during the day in group settings have not been operating. There has also been a much lower demand for transportation services, which bring in revenue.

The care providers have run into problems getting personal protective equipment for their employees, even those caring for people who have tested positive for the virus.

Davis’ association consists of 125 providers who serve about 30,000 people in Pennsylvania, helping them with personal needs such as bathing, administering medication and performing other services. They are completely funded by Medicaid.

“If people don’t show up for work, people can die,” Davis said.

A growing problem with employees calling off work — particularly in the areas hit hardest by tHe virus —- has caused the organizations to scramble, with overtime costs jumping and managers stepping in to fill gaps, he said.

One provider recently laid off 100 people, Davis said.

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CASES

Pennsylvania’s COVID-19 death toll rose by 97 to 2,292, the state health department reported Thursday, with about 1,400 additional people testing positive for the virus that causes the disease.

Statewide, more than 45,700 people have tested positive, according to the latest Health Department data. The number of infections is thought to be far higher because many people have not been tested, and studies suggest people can be infected with the virus without feeling sick.

Nursing and personal care homes account for over 65% of the deaths in Pennsylvania.

For most people, the virus causes mild or moderate symptoms that clear up in a couple of weeks. Older adults and people with existing health problems are at higher risk of more severe illness, including pneumonia, or death.