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HARRISBURG — The state will be unable to make at least $2.5 billion in payments to schools, counties and key service providers due to Pennsylvania’s ongoing budget impasse, a top Shapiro administration official warned Tuesday.
In two letters viewed by Spotlight PA and signed by Secretary of the Budget Uri Monson, the administration told a host of providers, from tech schools and libraries to ambulance services and homeless shelters, that payments will be delayed over the next six weeks.
“Negotiations are continuing and the dialogue is respectful and productive; however, finding agreement can be slow moving and we have not yet come to final agreement,” Monson wrote.
All told, the letters warned of delays to $2 billion worth of education funding, most of it consisting of delayed monthly payments to school districts, and $542 million in health and human services funding, most of it to county child welfare offices.
Both letters conclude with Monson saying that “as soon as a budget bill is delivered by the Legislature to the Governor’s desk for his signature,” the administration will “work expeditiously” to get money out to providers.
Pennsylvania lawmakers were supposed to complete the budget by June 30, but have been unable to reach a deal due to deep disagreements over state spending, Capitol sources previously told Spotlight PA. Democratic Gov. Josh Shapiro proposed a $51.4 billion budget in February, up from $48.3 billion last year. Much of the proposed increase accounts for rising Medicaid costs alongside continued aid for poor school districts and more money for mass transit.
However, Republicans who control the state Senate have balked at such an increase. The proposed spending is well above the state’s likely revenues next year; Shapiro pitched using the state’s ample cash reserves to make up the difference. After those dollars run out, the state would either need to reduce spending or increase revenue.
Both options have been floated in talks.
On the savings side, Shapiro and state Senate Republicans want to reduce Medicaid patients’ eligibility for expensive weight-loss drugs.
To raise new revenue, state House Democrats passed a plan that would legalize recreational marijuana and tax its sale. Their GOP counterparts in the state Senate have prioritized regulating and taxing slot-like skill games.
A deal to bridge these divides hasn’t been reached despite weeks of closed-door negotiations. As of Tuesday, neither the state House nor Senate is scheduled to return to Harrisburg until fall.
PA Secretary of the Budget warns of missed education payments by Spotlight PA on Scribd
Budget Secretary warns of Health and Human Services missed payments by Spotlight PA on Scribd
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