Unfortunately, the current state budget impasse is now into the second week, with the only progress seemingly being letter exchanges and intermittent, but not collaborative, meetings.
House Democrat Majority Leader Matt Bradford sent a letter (attached) to his Senate Republican counterpart, Joe Pittman, stating his commitment to consider in the future, but not part of this year’s budget, a school voucher program seemingly agreed upon between Governor Shapiro and the Senate Republicans. Bradford would also like the constitutionality, or lack thereof, of how the state currently funds public schools to be part of ongoing education discussions after a ruling in the Commonwealth Court earlier this year.
In the letter Bradford wrote “As you well know, while no voucher proposal will be part of this year's budget, I commit to both you and Governor Shapiro that I will take the time to examine and seriously consider the efficacy and constitutionality of any such proposal. I have charged House Majority Appropriations Chair Jordan Harris and House Majority Education Chair Pete Schweyer to hold joint hearings on education funding broadly and in particular to examine existing and potential additional options to education including programs such as the Pennsylvania Award for Student Success Scholarships (PASS), OSTC, and EITC, that aim to address the needs of our most at risk learners.”
Senate Republican Leader Joe Pittman responded with his own letter (attached) indicating that the accompanying budget code bills will have to be negotiated as next step, writing, “We are now in day eleven of the new fiscal year. We still do not have a completed budget product. Please let me know if you plan to vote on any of the remaining budget implementation legislation. The Senate sees little value in returning to session and allowing House Bill 611 to reach the Governor’s desk without addressing the remaining work needed to implement a budget. Furthermore, please give me a clear understanding whether you plan to coordinate with the Governor and speak as a unified voice in future discussions, as was previously thought to be the case throughout budget negotiations prior to June 30th.”
As these letters are exchanged it is unclear when Senator Pittman, Representative Bradford and other legislative leaders will actually come to the negotiation table with the Governor, nevertheless return for legislative session. Indeed, a session day is needed in the Senate to “sign” the general fund bill (HB611), which remains in limbo even though it has now passed both Chambers. The legislation passed the Senate on June 29th with Senator Anthony Williams (D-Phila) joining every Republican in support to pass the bill 29-21. The House then passed the bill on July 5th with 15 Republicans in support along with every Democrat, but only after Governor Shapiro promised to line item veto the section dealing with the school voucher program.
If/when enacted the General fund bill has $45.5billion dollars in spending, which is $1.7billion less than what was passed by House in early June and $300million less than what Governor Shapiro originally proposed in March. It is a 5% increase over what was passed last Fiscal Year. The$45.5 billion includes $1billion out of the Commonwealth’s surplus funds, still leaving $13billion in reserves. There are no tax increases or expansions, and most agency programs of interest are level funded or receive a slight increase. However, the budget packages does not include an increase to the minimum wage, an accelerated decrease to Corporate Net Income Tax or changes to how the state manages Net Operating Losses for businesses. The pending budget package does include funding for Level Up PA, Whole Home Repairs, Property Tax/Rent Rebate Program (PTRR), and maintaining the federal disaster emergency for the Interstate 95.
In the meantime, it will likely be several weeks before the impact of the budget impasse is felt because the state is legally required to fund some programs, such as Medicaid, and pay state workers who were furloughed during some previous budget impasses. However, previous budget delays have led to negative impacts as early as August for services such as child welfare, mental health, libraries, domestic violence services and school districts to name a few. Indeed, previous prolonged budget impasses have led to business tax credits being halted, school districts taking lines of credit and human services organizations furloughing employees as they wait for state funding. Funding for Penn State, Temple, and University of Pittsburgh (state related) colleges also remains unresolved, which could lead to a tuition increase for in-state students.
