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Pennsylvania’s budget is late. Here’s what you need to know about the impasse.

by Kate Huangpu of Spotlight PA and Katie Meyer of Spotlight PA |

A mostly empty Pa. Capitol rotunda.
Tom Gralish / Philadelphia Inquirer

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HARRISBURG — Pennsylvania’s state budget is late, and so far there’s no deal in sight.

Talks between Democratic Gov. Josh Shapiro, the Republican-controlled state Senate, and the narrowly Democratic-controlled state House fell apart last week thanks to a deadlock over whether to include private school vouchers in the spending plan.

Three days after the June 30 deadline, most lawmakers are back in their districts. While the House is planning a voting session for Wednesday, the Senate has yet to schedule a return to Harrisburg.

The state budget is necessary to set spending and collections across Pennsylvania’s government, from levying income taxes, to distributing money to public schools, to handing out tax credits to businesses.

The commonwealth will still be able to operate normally for some time without a plan. But if the impasse stretches out long enough, schools and nonprofits such as libraries could face serious budget issues.

The standoff is also a crucial moment for the commonwealth’s first-year governor. While Shapiro has long cultivated a reputation as a dealmaker, budget negotiations have daunted new governors in the past. Shapiro’s predecessor, Democrat Tom Wolf, oversaw a record nine-month impasse during his first year in office that damaged his approval ratings.

What’s the holdup?

Sometimes, many factors contribute to a budget stalemate. This year, there’s a single big one: whether to use taxpayer dollars to directly fund student scholarships for private schools.

Last week, Senate Republicans announced they had struck a deal with Shapiro on a $45.5 billion budget plan that would include $100 million in funding for a private school voucher program.

That program, dubbed the Pennsylvania Award for Student Success (or PASS), would give students in “low-achieving” school districts between $2,500 and $15,000 in scholarships on a first-come, first-served basis. It would have an income cap, and students could only use their voucher money for tuition or related expenses at a nonpublic school.

That was a deal breaker for the state House, according to the chamber’s Democratic Leader Matt Bradford (D., Montgomery), who told Spotlight PA Friday that it would be “unwise” of the Senate to “send over a budget that assumes any type of voucher program.”

Democrats have also indicated that there were other issues with the state Senate’s plan, namely that it would spend several million dollars less than the proposal Shapiro pitched in March and well over a billion dollars less than the bill state House Democrats passed earlier in June.

While state House Democrats have taken a hard line on vouchers, Senate Republican leaders have also stuck to their guns. Leaders say they will continue to support their compromise budget plan — which would include a substantial increase in education funding over last year’s budget — so long as Shapiro continues supporting vouchers.

“Those two parties need to reconcile those differences,” Majority Leader Joe Pittman (R., Indiana) said, referring to House Democrats and Shapiro. “We need to have a clear message from both of those parties whether or not lifeline scholarships is or is not on the table.”

State Senate President Pro Tempore Kim Ward (R., Westmoreland) was even more explicit, saying that the House needs to pass the scholarship program or senators will offer a different budget with a lower spend for state programs.

“If it's not going to be part of the final product, there will be a different number in that budget,” she said. “Because all the things that we gave on, we will want to take back."

Meanwhile, Bradford said Friday that House Democrats need “at least several days” to go through the budget passed by the state Senate.

What has happened in the past?

Lawmakers have often failed to meet the June 30 deadline. Last year, the budget was signed into law on July 8.

But the disagreement over vouchers has created a notable rift between state House Democrats and Senate Republicans.

Such impasses were common during the early years of former Wolf’s administration. Wolf’s eight years in office all featured strong GOP majorities in both the state House and Senate, and he clashed with them consistently over raising sales and income taxes and increasing funding for education.

Ultimately, Wolf signed a budget into law before the deadline only half of the time during his tenure.

The worst budget impasse of his tenure occurred his first year. In an unusual move, Wolf vetoed the budget proposal that the Republican-controlled legislature sent him in 2015, arguing that it would cause a $3 billion deficit and underfunded schools.

It was only in March of the following year, nearly 10 months after the deadline, that Wolf allowed a budget passed by the legislature to lapse into law without his signature. That final plan included additional funding for education but still caused a structural deficit.

What does an impasse mean for Pennsylvanians?

If the budget stalemate lasts only a few days, state-funded programs likely won’t feel any significant effects.

But the longer the impasse drags on, the more funds will run out, forcing publicly funded entities such as schools, libraries, and domestic violence services centers to make hard decisions about where and when to spend their dwindling funds.

Schools could feel the effects as soon as next month when teachers and students begin to return to the classroom. Administrators would have to decide which bills they must pay first, including utilities such as lights and heating.

In the past, some services have taken out lines of credit to supplement their funding until a new budget was enacted. According to the state auditor general at the time, Eugene DePasquale, Pennsylvania school districts borrowed nearly a billion dollars during the 2015 impasse.

Other services resorted to slashing costs or shuttering completely that year.

A survey by the United Way of Pennsylvania, a nonprofit dedicated to boosting education and health funding, found that hundreds of employees had been furloughed, lost benefits, or taken a salary reduction due to the 2015 budget impasse.

What happens now?

Rank and file members in both the state House and Senate told Spotlight PA on Monday that they hadn’t heard whether talks were still actively ongoing among leaders.

Spokespeople for state House Democrats and Shapiro either did not return requests for comment, or declined to comment on the status of negotiations. Kate Flessner, a spokesperson for Senate Republicans, said in an email that,“Until the governor and House Democrats reconcile their differences on the PASS initiative, the Senate has completed its work.”

The state Senate’s next scheduled session day is September 18. Late on Monday, the state House scheduled its next voting session for this Wednesday, July 5.

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