It's been nearly three months since the constitutionally-mandated deadline for state lawmakers in Harrisburg to pass a budget. But partisan gridlock continues to hold up negotiations.
Republicans hold a majority in the Senate, while Democrats maintain a one-vote edge in the House. Both chambers must agree on a spending plan before Gov. Josh Shapiro can sign it.
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Until then, money meant for counties' safety net programs will be held up, potentially affecting local governments' ability to provide services and programs aimed primarily at helping their communities' most vulnerable residents.
Pennsylvania is one of only two states that have been unable to pass some form of a budget for the 2025-26 fiscal year. The other is Michigan. In other states, lawmakers have reached deals on spending plans – or contingencies. North Carolina, for example, has passed a "mini-budget" bill that prevents disruptions in state operations.
As the General Assembly drags its feet, some funding that counties receive from the state for human service and safety net programs cannot go through. That's led counties with smaller reserves to borrow funds, which they'll have to pay interest on and may not be reimbursed for by the state, or cut services where allowed.
Affected programs include senior services, drug and alcohol programs, child welfare services and health departments.
"It means the third-party providers are just going to get paid less until the budget is paid less and the counties are fully funded," said Kyle Kopko, the executive director of the County Commissioners Association of Pennsylvania. "That's varied from county to county. And those third-party providers that rely on those funds, that's going to affect their bottom line and payrolls too."
Kopko said that counties across the state have also had to halt travel reimbursements for employees, cut overtime or borrow money, which will lead to interest payments.
"That obviously impacts counties' ability to provide human services in a timely manner, or in as robust of a manner as is required by law," Kopko said.
Public schools are feeling the squeeze too, which may get much worse if the impasse drags on any longer.
While many counties are able to maintain spending, having recently collected property taxes, Kopko said that, come next month, school districts are going to face "some real financial pressures."
Already, he said, some have foregone new textbook purchases or are cutting programs out of school hours in case the stalemate drags on even longer.
"Depending on the county, this can be a third or more of the budget," Kopko said about state funding. "They are required to provide a wide range of services that are mandated by law, and they don't have the resources because the state hasn't taken action. We're still trying to wrap our heads around how much money is at play."
Divided legislature brings partisan politics into the mix
Both parties have been tight-lipped about what progress has and hasn't been made, and what the largest obstacles to a compromise are.
But each side has made one thing clear: the partisan disagreements over how to approach the budget run deep."
"House Democrats, even with a razor-thin majority, have demonstrated time and time again that we want to work together and compromise with Senate Republicans to pass legislation that moves Pennsylvania forward," Beth Rementer, a spokesperson for House Democrats said. "Unfortunately during this budget cycle, Senate Republicans have not been willing to come to the table with the realization that any solution will take bipartisan support both in their chamber and the legislature."
Spokespeople for Senate President Pro Tempore Kim Ward (R-Westmoreland) and Senate Majority Leader Joe Pittman (R-Indiana) did not respond to requests for comment.
Firstly, there's no consensus on how much the state should spend in total this year. In February, Shapiro proposed a $51.5 billion budget, about $4.5 billion more than it was projected to take in.
Senate Republicans rejected the number, advocating for a balanced budget that wouldn't dip into the commonwealth's roughly $3 billion surplus or $7 billion rainy day funds. They also rejected a budget that passed the House in July that would have cut nearly $1 billion from Shapiro's proposal.
In August, Senate Republicans passed what they described as a temporary budget, keeping spending largely the same as last year. The move, they said, would allow funding to flow to schools and counties, buying time for lawmakers to settle their differences. Democrats in the House rejected the move, advocating for a comprehensively negotiated budget instead of a stopgap.
Then, there are the disagreements over how much to spend and what policies should change.
"I'm frustrated that they haven't done what they are, frankly, supposed to do. It's their one job to put a budget on my desk," Shapiro said at a press conference Thursday.
He put the onus on Senate Republicans, who he said have failed to meaningfully compromise and convened for too few session days, given the stakes of the fight.
In a statement released earlier this month, Pittman, the Senate Majority Leader, said the transit deal has sped negotiations up. But he added, "while I am encouraged by the meaningful work at the negotiating table, currently there is no global agreement on a budget deal, as several fiscal and policy issues remain outstanding. Reaching consensus swiftly would prevent negative impacts of a budget impasse being shouldered by counties, school districts, hospitals and all those who rely on state government services."
With mass transit off the table, what else is being discussed?
One budget fight that has been resolved – at least temporarily – is the one over mass transit.
It's been 12 years since lawmakers passed a comprehensive solution for funding it with state dollars. But in the time since, costs have increased and the state's transit agencies have warned they need a new source of revenue or will have to implement service cuts and fare hikes.
For Democrats, it was a top priority, and they advocated for a plan proposed by Shapiro that would have sent an additional 1.75% of the state's sales tax revenue to the commonwealth's transit authorities.
Taking no action could impact transit systems across the commonwealth that serve urban, rural and suburban parts of the state with trains, buses and Shared Ride services.
Republicans, however, did not want to increase state funding for the programs they saw as primarily benefitting urban, Democratic-dominated parts of the state. Instead, they pushed to redirect dollars from a mass transit capital projects fund that is intended for things like replacing old trolleys and buses or renovating platforms.
In August, the SEPTA, the state's largest transit authority with roughly 800,000 riders a day, announced it would be implementing service cuts and fair raises, barring a plan from legislatures to increase their share of state funding.
However, a judge ruled that the cuts to train and bus lines disproportionately impacted minority and low-income communities, and blocked them.
Following the ruling, Democrats caved, and lawmakers passed a bill to redirect the capital projects funding to the state's largest transit authorities, SEPTA and Pittsburgh Regional Transit (PRT). The move bought about two years of runway for the legislature to find a permanent solution before the kinds of service cuts the agencies warned about would have to be implemented.
But, as Spotlight PA reported, the solution leaves the state's smaller transit authorities, which serve primarily rural and suburban areas, without new state funding. Many are considering fare hikes and service cuts.
The impacts could be felt most by those who rely on state-funded Shared Ride programs, which are particularly important to seniors and disabled people in rural areas. The programs are run by transit authorities across the commonwealth, and operate on a deficit.
Rementer, the House Democratic spokesperson, said in a statement, "House Democrats have been clear that any long-term mass transit solution must include new, recurring, and reliable funding to fully fund transit in the commonwealth … We are in this predicament, which will have to be addressed in two years, only because Senate Republicans failed to come to the table with a real solution."
Republicans have argued that the Public Transit Trust Fund, where the money was taken from, was over-funded, with hundreds of millions that had yet to be earmarked for projects. The solution, they've argued, will keep trains and buses running and give transit authorities time to address issues like crime and fare evasion while the legislature debates how best to increase their funding.
Yet even with one of the largest sources of disagreement effectively off the table, a state budget has yet to emerge.
In a press conference Thursday, Shapiro said the Senate and the House "have narrowed the differences," but, at this point, it's a familiar refrain.
Other major issues include how to fund public schools. Democrats are seeking more than $500 million additional dollars to be distributed through the adequacy formula that was developed last year.
The formula was a response to a Commonwealth Court ruling that found the previous funding formula was unconstitutionally inadequate, with too large a gap between the state's richest and poorest schools.
For Democrats, the solution is a gradual ramp-up of funding disbursed though a formula that takes into account factors like poverty levels in a school district and the number of students learning English as a second language.
But Republicans have taken issue with the formula and the amount of state spending directed through it. Some have advocated for a new formula that would ultimately see the state spend less on education.
As for the policy debates, lawmakers are discussing whether to tax so-called skill games or legalize cannabis, how to reform cyber charter school funding, how much to fund Medicaid following federal cuts to the program, whether to increase the minimum wage, and what the legislature should do to incentivize energy production.
Pennsylvania Capital-Star is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Pennsylvania Capital-Star maintains editorial independence. Contact Editor Tim Lambert for questions: info@penncapital-star.com.