Gretchen Whitmer

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Pennsylvania Faces Widespread Payment Delays Amid Budget Impasse

The Commonwealth of Pennsylvania is experiencing notable disruptions as its budget remains unapproved, leading to delays in over $2 billion in payments through August, according to Governor Josh Shapiro‘s management.

school districts are particularly vulnerable, with the poorest ones potentially needing to secure loans if state aid is withheld in August. The Pennsylvania School Boards association reports that the ongoing stalemate is forcing districts to re-evaluate their spending, including leaving teaching positions vacant and postponing the purchase of essential student technology like laptops. A school board official, Andy Christ, noted that the state has not historically reimbursed districts for the costs incurred from borrowing during previous budget impasses.

Beyond education, universities, including Penn State and state-run system schools, are anticipating delays in over $200 million in financial aid. Additionally, counties will not receive timely payments totaling $390 million designated for child welfare agencies. The County Commissioners Association of Pennsylvania has expressed increasing concern over the repercussions of this stalemate, especially on vital human services such as mental health counseling, child welfare, and drug and alcohol treatment programs.

The administration also indicated that more than $100 million in payments to various other agencies, non-profit organizations, and programs will be postponed.Crucially, the state is currently unable to disburse funds to early childhood education providers.

For weeks, Governor Shapiro and leading Republican lawmakers have been engaged in private discussions aimed at reaching a compromise. Though, the state House and Senate have not scheduled any voting sessions for the current week.

The primary sticking points in negotiations involve Republican efforts to reduce Shapiro’s proposed $51.5 billion spending plan, which is largely influenced by ample increases in Medicaid costs.Republicans are also advocating for the regulation and taxation of tens of thousands of “skill” games, which resemble slot machines and operate with cash payouts. Conversely, Shapiro and the Democratic party are prioritizing increased funding for public schools and public transit agencies.

During a budget stalemate, the state is legally obligated to continue making debt payments, cover Medicaid expenses for millions of residents, issue unemployment compensation, maintain the operation of prisons, and ensure the ongoing patrol of state police.State employees under the governor’s jurisdiction are generally expected to report to work and receive their scheduled pay.

Other States Grapple with Budgetary Challenges

In Michigan, a budget agreement remains elusive as the Democratic-controlled Senate and the republican-controlled House of Representatives are divided on numerous proposals, including funding for schools and infrastructure.Accusations of refusing to negotiate have been exchanged between the chambers’ leaders. Failure by lawmakers and democratic governor Gretchen Whitmer to pass a budget before the fiscal year begins on October 1st could result in a government shutdown.

Simultaneously occurring,in North Carolina,where Republicans hold a majority in the Legislature,a budget deal is not anticipated until late August at the earliest. Key disagreements between the competing spending plans include teacher and state employee salary increases, tax cuts, and the elimination of vacant government positions.The state government is not currently facing a shutdown, and the Legislature has forwarded a stopgap spending plan to Democratic Governor Josh Stein.