Pennsylvania’s budget impasse deepened Wednesday as the state House voted down two Senate-passed measures for the 2025-26 fiscal year, leaving funding for schools, counties, and public transit in limbo just one day before the Southeastern Pennsylvania Transportation Authority (SEPTA) deadline to avoid major service cuts.
The rejected bills included a $47.6 billion flat-funding budget and a separate $1.2 billion, two-year plan that would redirect mass transit capital funds and some gaming revenues toward transit operating costs and infrastructure repairs. Both measures cleared the Senate Tuesday night but failed in House committees along party lines, with Democrats opposed and Republicans in support.
House Democratic leaders, who last month approved a \$50.6 billion spending plan and sent it to the Senate, argued that the Senate’s proposals failed to meet the state’s needs. They objected to tapping into the Public Transportation Trust Fund — a capital reserve with more than $2.2 billion — for operations, a position shared by SEPTA and the state Department of Transportation.
Without a deal, SEPTA says it will proceed with 20% service reductions beginning Aug. 24, just before Philadelphia’s schools reopen. Agency officials warned that drawing on capital reserves would jeopardize long-term projects and system maintenance.
The state budget is now more than seven weeks overdue, delaying payments to public schools, counties, hospitals, and other government-supported services. Many have already sought temporary financing to bridge the gap.
Negotiations continued behind closed doors on Wednesday between Gov. Josh Shapiro, House Majority Leader Matt Bradford, and Senate Majority Leader Joe Pittman, but significant disagreements remain. Democrats want increased spending to address education and transit needs, while Republicans have pressed for a flat-funded budget and alternative revenue measures such as taxing skill-based gaming machines.
The stalemate leaves the General Assembly under pressure to act quickly. Without a compromise, state funds will remain locked in the treasury, and essential services — from classrooms to public transportation — will face mounting strain.
Source: Phila. Inquirer