Pennsylvania’s budget stalemate is closing in on its third month, leaving schools and counties across the state shouldering the burden of a political impasse in Harrisburg.
Without an approved budget, state funds cannot be released to local governments or districts, forcing them to borrow or cut back. The Philadelphia School District, for example, has already taken out a $1.5 billion loan to cover expenses, an emergency move expected to cost $30 million in interest and fees. Counties are weighing similar steps, with some warning they may need to raise local taxes if state aid does not arrive soon.
The holdup stems from a disagreement over how much Pennsylvania should spend this fiscal year. Gov. Josh Shapiro has gradually lowered his proposal from $51.5 billion to $49.9 billion, but Senate Republicans insist the figure still exceeds what the state can afford. GOP leaders argue the state is on track to spend billions more than it brings in and want to preserve the $7.7 billion Rainy Day Fund. Democrats counter that the reserve exists to help residents and should be tapped to avoid forcing schools and counties into costly borrowing.
The late budget has ripple effects beyond classrooms and county offices. Medicaid costs are rising, federal funding is uncertain, and lawmakers have yet to reach consensus on potential new revenue streams, such as taxing recreational cannabis or regulating skill games. Until an agreement is reached, local officials remain in limbo, unable to plan for the year ahead.
Pennsylvania is currently the only state without a budget in place. While late budgets are not unprecedented — a 2015 standoff lasted nine months — the current impasse highlights how gridlock in Harrisburg translates into real financial strain for communities. For schools, it means money spent on debt service instead of classrooms. For counties, it means tough choices about whether to cut services or raise taxes.
Source: PA Capital-Star