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HARRISBURG — Counties, schools, and social service providers are slowly starting to see the impact of the state’s three-month budget impasse. Many have dipped into their reserves, taken out loans, frozen hiring, or suspended services. Some predict layoffs by Thanksgiving.
And with little hope of landing a real deal on a new spending plan, legislators are turning to a short-term fix: a stopgap budget authorizing the state to temporarily spend money. Republicans on Friday said they would introduce and vote on the measure this week in the Senate.
The move is designed to ease the burden on the agencies and entities most affected by the gridlock between Gov. Wolf and the GOP-dominated legislature. But it also raises questions about what progress, if any, has been made behind the closed doors of the budget negotiating room — and perhaps spares both sides from having to say more.
“I’d prefer we have a budget deal,” said Senate President Pro Tempore Joe Scarnati (R., Jefferson). “But if that’s not the case, then we have to have a Plan B.”
Wolf was circumspect about whether he would sign their Plan B.
“We have no idea what it is they are proposing,” said his spokesman, Jeff Sheridan.
A report last week from credit rating agency Moody’s Investors Service noted that late budgets have become the norm in Pennsylvania over the last 13 years, reflecting “poorly on governance.”
Neither Wolf nor the GOP leaders appear to have strayed far from their core positions since they missed the July 1 budget deadline. The governor’s $30 billion proposal calls for more money for public schools, and he wants property tax reform. Republicans have declared public pension reform and privatization of the state liquor system their priorities.
The decision to vote on a stopgap budget this week was outlined Friday by House Majority Leader Dave Reed (R., Indiana). “Human service agencies, schools, and various other service providers are now in jeopardy of ceasing operations,” he wrote his GOP colleagues in an email.
Details of the plan were scant. But it appears legislators are eyeing a measure that would at least mirror spending from the previous fiscal year and would fund services and programs through October or December.
Wolf could veto it — and some of his fellow Democrats believe he should, to keep up the pressure to finalize a deal.
But a veto would carry political risk. Political analyst and pollster G. Terry Madonna said polls show the public now holds the legislature more responsible than the first-term governor for the impasse.
That dynamic could shift if Wolf strikes a plan that, even temporarily, provides a financial balm for schools and providers of social services ranging from hunger relief to domestic violence shelter.
Though there have been late budgets before — particularly during the administration of Gov. Ed Rendell — there hasn’t been a stopgap budget since the late 1970s, Madonna said. That is because they were so overused in the 1960s, when impasses would drag on for months, that elected officials became leery of them.
“They buy you time, but they take away the sense of urgency,” he said.
And the impasse has taken a toll. Without a budget, the state has no spending authority. Though money is coming into state coffers, there is no blueprint to direct how and on what that money should be spent.
Counties — some of which receive up to half their income from state aid — have felt the pinch, said Douglas Hill, executive director at the County Commissioners Association of Pennsylvania.
He said several made the decision early to delay payments to vendors, while others instituted hiring freezes to keep money flowing for critical services.
“Morally and statutorily, you can’t walk away from those,” said Hill.
That job will become harder if the impasse drags on into the latter part of this month and next, when counties typically get sizable quarterly payments from the state.
In Montgomery County, commissioners last week agreed to cover the state’s funding for another month. They are already short $21 million in state reimbursements, and expect that to rise to $26 million by the end of the month, Finance Director Uri Monson said.
Monson said he isn’t sure the county will be able to do the same next month.
Joe Dougherty, director of Delaware County’s Department of Human Services, echoed that sentiment.
“As this drags on, cash flow gets tighter and tighter,” he said.
Dougherty likened the county’s role to that of an emergency-room doctor: It will continue to provide essential services even if it doesn’t get paid. “Obviously, Children and Youth Services can’t stop,” he said of the agency that investigates child abuse.
But some addiction-related services, such as school-based programs that teach drug and alcohol prevention, may have to be cut, he said.
In Chester County, officials said class sizes likely will double for students with severe disabilities — a population that requires a nearly even teacher-to-student ratio — if a budget isn’t passed by next month. That is because the hiring of new teachers and aides will cease at the Chester County Intermediate Unit, which serves the special-needs population of the county’s 12 school districts.
If there’s no budget by Thanksgiving, layoffs may begin for support staff at the Intermediate Unit, and administrators may have to take on teaching responsibilities.
“Teachers would be stretched,” said executive director Joseph O’Brien. Still, O’Brien says he is willing to endure short-term financial pain for a budget that adequately funds education.
“I’ve spent over 35 years in education, and I would like to hope that somebody can solve the funding issue for schools,” he said. “It’s been kicked down the road for years.”