Pa. budget impasse nears end as Senate sends main bill to Gov. Josh Shapiro

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HARRISBURG — More than a month after the state missed its June 30 deadline, the Senate has sent Pennsylvania’s main budget bill for the new fiscal year to Gov. Josh Shapiro for his signature.

In a statement Wednesday night, state Senate President Pro Tempore Kim Ward (R., Westmoreland) said that the $45.5 billion appropriations bill “will provide the necessary funding to schools, counties, and organizations” that had sounded the alarm that they’d have to reduce services without state dollars.

However, without an accompanying fiscal code, which directs how these dollars should be spent, the government might not be able to immediately enact all spending, including for key priorities like public legal defense or housing.

The spending plan passed the Democratic-controlled state House in early July after Shapiro, a Democrat, announced he would veto a $100 million private school voucher program.

Shapiro previously expressed support for such a program, and leadership in the Republican-controlled state Senate said the governor negotiated the budget bill that included funding for vouchers.

Angered over Shapiro’s veto vow, Ward refused to reconvene the chamber and left the budget deal in limbo without a constitutionally required signature.

What the budget means for education

Some of the most notable changes in the new budget involve education.

Lawmakers agreed to boost education funding by over $700 million — a more than 8% increase over last year’s budget. The plan also includes $100 million more for Level Up, a program that provides additional dollars to the most underfunded school districts in the commonwealth, and creates a new universal free breakfast program.

State Senate Republicans have said it’s a bigger increase than they would have agreed to without the promise of vouchers. State House Democratic leaders have touted the boost, calling it “a plan that further invests in every school district, including extra support for those with the most need and aging infrastructure.”

But not all education advocates are pleased.

Two early childhood programs, Pre-K Counts and the Head Start Supplemental Assistance program, are both flat funded in the plan — a setup that Early Learning Pennsylvania, a group focused on services for children under five, called “a noticeable departure from a decade of growing investment in high-quality pre-k.”

“When nearly 90,000 eligible 3- and 4-year-olds do not have access to these once-in-a-lifetime early learning opportunities, and pre-k and Head Start programs can’t keep teachers in their classrooms because of inadequate reimbursement rates, this budget bill is simply unacceptable,” the group wrote in a statement soon after the package passed the state House.

There’s also less additional money for special education than there was in last year’s budget, and it skips routing additional money into school infrastructure projects — a priority for many lawmakers, particularly those who represent districts with aging schools, as in Philadelphia.

Education has been top of mind for many lawmakers and advocates this budget cycle. This budget is the first since Commonwealth Court ruled that Pennsylvania’s education system is unconstitutionally inequitable and ordered lawmakers to fix it.

The Public Interest Law Center and Education Law Center, which represented petitioners in that long-running court case, say fixing the problem will require more money from the state and that lawmakers should start making investments as soon as possible. This year’s budget, they said in a statement, isn’t enough.

“The increases in this year’s budget, while appreciated, do not fundamentally change the unconstitutional and unacceptable status quo,” spokespeople for the groups wrote. “In every corner of the state, students in public schools continue to be denied the basic resources they need to succeed academically, civically, and socially.”

Other notable changes, or lack thereof

The budget includes the first-ever state funding for public defense. While the $7.5 million won’t completely defray costs for public defenders across the commonwealth, the money has been a priority for criminal justice advocates for years.

It also uses $50 million in state funding to reup a popular home repairs grant program established last year with federal stimulus dollars.

Not included in the budget is $100 million for adult mental health programs. Last year, former Democratic Gov. Tom Wolf and the legislature agreed to create a bipartisan commission to recommend how to use federal stimulus money to offer relief to the overburdened system.

In a report, the commission recommended that the funds go toward a series of grants for services like telemedicine and workforce development programs. But the final budget instead reroutes the money toward school mental health programs — a move that axes the recurring line item that had previously funded those programs.

Two Democratic lawmakers who sat on the commission have since called for the funding to be restored, though state Senate Republicans have been unresponsive.

The package also includes money — overall, a nearly 11% funding increase — for the Department of Environmental Protection to clear permitting backlogs and add staff for administrative work, a potentially important area as the commonwealth competes for billions of federal dollars to build new hydrogen production infrastructure.

The budget, however, doesn’t include any increases for the Department of Conservation and Natural Resources, which is the agency that would assess whether injection wells for carbon capture can safely be drilled and monitor for leaks.

Amid high inflation, any decision to flat fund a department or line item functionally amounts to a funding cut due to the decreasing value of each dollar.

Why do code bills matter?

Shapiro’s signature might not be the final word on every element of this year’s budget — particularly for new line items like funding for indigent defense.

Lawmakers still haven’t passed code bills, which typically become law alongside the budget and include specific directions for how money can be spent.

In her Wednesday statement, Ward said that Shapiro had “provided us the necessary assurances to guarantee” that spending on some unspecified programs “will remain untouched until the legislature has finalized the language.”

Until the code bills pass, the state Treasury could find that the commonwealth doesn’t have the authority to disburse certain funds — though the administration has downplayed that possibility.

Treasurer Stacy Garrity, a Republican, has the final word on whether specific spending is allowed.

Erik Arneson, a spokesperson for Garrity, told Spotlight PA that if “we reach the point where a General Fund budget bill is signed without the code bills that traditionally accompany it, such as the Fiscal Code and/or the Public School Code, that could lead to some payment requests being returned due to a lack of sufficient spending authority.”

Those decisions, he said, would be made on a case-by-case basis.

At a news conference last month, Garrity said that she intends to strictly follow the law.

“Generally speaking, if a payment request doesn’t meet any of the legal requirements — such as being a federal mandate, or being necessary to maintain public health, safety, and welfare — it’s going to be declined,” she said.

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