Schools and counties begin to see payment delays as Pennsylvania's budget stalemate hits a month
State-supported universities, libraries, early-childhood education programs and county health departments also will see delays in payments, Shapiro's administration said in letters sent Tuesday to providers.
"I recognize this information is concerning, and it is equally concerning to both me and the governor," Budget Secretary Uri Monson said in the letters. "Our administration continues to work diligently to find agreement between the House and Senate and we will work to support you and your organization as you manage the current situation."
Borrowing isn't widespread by counties and school districts to cover for late state payments, and some have reserves they can tap. But borrowing may grow if the stalemate drags well into August.
Budget stalemates are also playing out in Michigan and North Carolina, where Democratic governors are sharing power with Republican legislators.
Without the governor's signature on a new spending plan, the Pennsylvania state government lost some of its spending authority starting July 1.
Pennsylvania school districts, which received more than $11 billion last year from the state for operations, will see delays on more than $2 billion in payments through August, Shapiro's administration said.
District officials have said the poorest districts might have to borrow money if aid is delayed in August, and the Pennsylvania School Boards Association says the stalemate is causing districts to reconsider how they spend, such as leaving teaching positions unfilled or putting off purchases of student laptops.
A school board's official, Andy Christ, said the state didn't reimburse districts for the cost of borrowing during past stalemates.
Universities, such as Penn State and state-run system schools, will see delays on more than $200 million in aid, and counties will not get on-time payments of $390 million to child welfare agencies, the Shapiro administration said.
The County Commissioners Association of Pennsylvania said its members are "growing more and more concerned about the consequences" of the stalemate, particularly on human services such as mental health counseling, child welfare, and drug and alcohol treatment.
More than $100 million in payments to a range of other agencies, nonprofits and programs will also be delayed, according to the administration, and it said it cannot distribute money to early childhood education providers.
For weeks, Shapiro and top Republican lawmakers have said they are engaged in closed-door discussions to try to find a compromise. The state House and Senate have not scheduled voting sessions for this week.
The biggest issues for Republicans are curbing Shapiro's $51.5 billion spending proposal — driven by a massive increase in Medicaid costs — and their push to regulate and tax tens of thousands of slot-machine-like cash-paying "skill" games that are popping up everywhere. Top priorities for Shapiro and Democrats are boosting funding for public schools and public transit agencies.
During a stalemate, the state is legally bound to make debt payments, cover Medicaid costs for millions of Pennsylvanians, issue unemployment compensation payments, keep prisons open and ensure state police are on patrol. All state employees under a governor's jurisdiction are typically expected to report to work and be paid as scheduled.
Michigan's Democratic-controlled Senate and the Republican-controlled House of Representatives remain far apart on numerous proposals, including funding for schools and roads.
The chambers' leaders have accused each other of refusing to negotiate. If lawmakers and Democratic Gov. Gretchen Whitmer don't pass a budget by the Oct. 1 start of the state's fiscal year, they risk a government shutdown.
In North Carolina, where Republicans control the Legislature, a budget deal likely isn't expected until late August at the earliest.
Teacher and state employee salary raises, tax cuts and eliminating vacant government positions have been among the leading differences in competing spending plans.
State government is in no danger of a shutdown, and the Legislature sent Democratic Gov. Josh Stein a stopgap spending plan on Wednesday.
___
Associated Press reporters Gary D. Robertson in Raleigh, North Carolina, and Isabella Volmert in Lansing, Michigan, contributed.
Follow Marc Levy on X at: https://x.com/timelywriter
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