Pennsylvania Treasurer Stacy Garrity announced Wednesday a $500 million loan initiative aimed at keeping counties and pre-K programs afloat as the state enters its third month without a budget. The short-term loans are designed to cover operating costs for governments and Head Start providers until lawmakers and the governor finalize a spending plan.
The loans, which carry a 4.5% annual interest rate, must be repaid within 15 days of a budget’s enactment. Funding will come from the Treasury’s $21 billion Liquid Asset Pool. Treasury officials said counties and eligible agencies would be contacted directly, but did not detail specific qualifications.
Counties and school systems have been without state funding since July 1, forcing some to explore private credit lines and even potential tax hikes. Lancaster, York, and Montgomery County commissioners, all Republicans, praised the program, saying it could serve as a critical stopgap. County leaders warned that without immediate relief, staff cuts and long-term service disruptions could become unavoidable.
The move comes amid partisan tensions in Harrisburg. Garrity, a Republican who recently entered the governor’s race, has blamed Democratic Gov. Josh Shapiro for the ongoing stalemate, while Democratic leaders accused Senate Republicans of dragging their feet. Shapiro’s office noted that his budget plan has been on the table for more than 200 days, with the Senate holding limited session days during that period.
Democratic lawmakers criticized Garrity’s loan terms, arguing that struggling counties and early education providers need sustainable funding, not short-term debt. Senate Republicans, however, defended the treasurer’s action while shifting blame to the Democratic-led House for failing to advance a budget compromise.
Senate GOP leaders said they will return to session in early October to push negotiations forward. Until then, Garrity signaled her office may consider expanding loan access to other affected groups if the impasse continues.
Source: WESA