Pennsylvania State Capitol building in Harrisburg on July 26, 2023. Amanda Berg
Gov. Josh Shapiro introduced a $51.5 billion spending plan in February that would require about $4.5 billion more than the state was expected to receive in revenue
School districts and county governments face cascading financial impacts as the ongoing state budget impasse starves them of funding, leaders said Monday.
Lawmakers had a June 30 deadline to pass the 2025-2026 budget. But with September nearly over and the budget 90 days late, school programs and county agencies that depend on state and federal pass-through money are in jeopardy, representatives from the Pennsylvania School Boards Association (PSBA) and County Commissioners Association of Pennsylvania(CCAP) said.
“Late budgets come with real impacts,” PSBA CEO Nathan Mains said. “Imagine trying to plan your own personal budget without a complete picture of your income, or trying to pay all of your bills without as much as 70% of your income. That’s the position school districts find themselves in because of this year’s late state budget.”
The partisan deadlock between the Democratic-led House and the Republican-controlled Senate will soon force school districts and counties to borrow money to keep programs running or reduce services. Some have already planned service cuts and hiring freezes starting in October.
Pennsylvania is the only state in the country that has been unable to pass some form of a budget for the 2025-26 fiscal year.
Gov. Josh Shapiro introduced a $51.5 billion spending plan in February that would require about $4.5 billion more than the state was expected to receive in revenue.
Senate Republicans rejected the proposal, pushing 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 spending plan that passed the House in July that would have cut nearly $1 billion from Shapiro’s proposal.
The Senate approved a temporary budget in August to allow funding to flow to schools and counties while lawmakers continued negotiations over transit and education funding, two of the major sticking points. House Democrats refused it, saying they wanted a fully negotiated budget instead of a stop-gap.
CCAP Executive Director Kyle Kopko said that while it’s important for both parties to advocate for their priorities, every budget impasse pushes county governments closer to financial crisis.
“We can’t normalize the practice of essentially missing a state budget deadline every other year,” he said, noting that 12 budgets in the last 25 have been late. “Without a state budget, many counties will be forced to raise property taxes, cut critical services, or both.”
Armstrong County announced last week that it would stop reimbursements to families providing foster care services, close some of its senior centers and freeze hiring and unnecessary travel.
Westmoreland County commissioners announced employee furloughs and park closures as its budget reserves run out.
And Chester County commissioners last week passed a resolution calling on Shapiro and leaders in the General Assembly to “prioritize their responsibilities and work collaboratively to finalize a budget without further delay.” The county will pay its human services contractors only 75% of what they invoice with the remainder to be paid when the budget is passed.
Kopko noted that even after Shapiro signs a budget, it will take six weeks or more for funds to be distributed to the agencies that are waiting.
CCAP has adopted a formal policy position asking Shapiro and lawmakers to support legislation to reimburse counties the costs and interest associated with short-term operation loans which now fall to local taxpayers.
“We cannot allow Pennsylvanians to be punished again simply because the Commonwealth failed to pass a timely budget, as required by law,” Kopko said.
Susquehanna Township School Superintendent Tamara Willis said the need to borrow money creates “double jeopardy” for districts like hers that are preparing to issue debt to build or repair schools.
With no new buildings in 60 years and the fastest growing enrollment in Dauphin County, the district’s schools are stretched to their limits, Willis said.
“Any disruption or downgrade to our credit rating will increase the cost of that borrowing, making those bonds significantly more expensive,” Willis said.
In the long run, that means the district will have less money to hire teachers, pay for programs and purchase essential classroom supplies, she said.
“These are the very investments that directly impact student learning,” Willis said. “So let me be clear, this is not a temporary inconvenience. It is a serious threat to both our daily operations and our long term fiscal health.”
Annie Strite, mental health director and administrator for Cumberland and Perry counties, said the impasse also has detrimental effects on the safety net programs that work hand-in-hand with schools and educators to ensure the wellbeing of students and their families.
Noting September is Suicide Prevention Month, Strite said suicide is the second-most common cause of death for children 10 to 14 and third-most common for teens 15 to 18 nationally.
“It’s imperative the community mental health system collaborate with our education professionals at every level,” she said.
Strite said in the two counties where she oversees mental health services, five elementary school counselors serve 49 schools in 13 districts and helped more than 1,000 students. She recounted a recent case in which a teacher referred a student for academic and behavioral concerns.
County mental health workers discovered a family in crisis struggling with, homelessness, financial instability, a recent family death and domestic violence witnessed by the student. The county connected the mother with counseling, the student with in-school therapy and the family with food assistance.
There are thousands of stories across Pennsylvania that are similar,” Strite said, adding that without intervention, such situations can lead to more costly involvement with child welfare agencies.
“If the budget impasse lingers still longer, difficult decisions will need to be made to stop services and furlough or terminate staff who serve in these roles,” Strite said.
Sherene Shereen Hess, an Indiana County commissioner and CCAP president, said county governments have not fully recovered from the 2015 budget impasse, when the Republican-controlled legislature and Democratic former Gov. Tom Wolf didn’t reach an agreement for nine months.
”We’re mandated to deliver these services, but it’s going to take a financial toll and it takes a toll on folks with stress too, and I see that,” Hess said. “I see that happening on people’s faces every day.”
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