PA Chamber Update on State Budget Impasse
Source: PA Chamber of Business & Industry
Pennsylvania’s budget stalemate now stretches into its tenth week, though two top negotiators last week signaled potential movement on one of the key sticking points: public transit funding.
Gov. Josh Shapiro and House Majority Leader Matt Bradford (D-Montgomery) both recently signaled new willingness to use the state’s $2.4 billion Public Transportation Trust Fund (PTTF) to stabilize transit agencies like SEPTA, which began service cuts last month.
On Aug. 12, the GOP-controlled Senate advanced a $47.6 billion spending plan and a separate transit bill that would reallocate funds from the PTTF over two years, along with gaming revenue, to support transit operations.
House Democrats swiftly rejected that package, calling it short-sighted. In July, the lower chamber passed its own budget bill which included Shapiro’s proposal to boost transit through a higher share of state sales tax revenue, which Senate Republicans dismissed as too costly.
Until last week, Democrats had opposed tapping the PTTF, which is intended for long-term capital projects like new rail cars and station upgrades. But Shapiro and Bradford now say they could support limited use of the fund — if paired with recurring revenue and a plan to replenish it.
The shift could mark the beginnings of a compromise. Senate Majority Leader Joe Pittman (R-Indiana) welcomed Democrats’ openness, saying it represents progress toward bridging the chambers’ competing plans.
“If the administration and the House Democrats are willing to use existing dollars in the PTTF program to fund transportation, then I believe that is an important step to figuring out a path forward,” he said last week.
However, both sides remain at odds over specifics. Senate Republicans want to use hundreds of millions from the fund for both transit and road projects, while Democrats insist it should only support transit and be backfilled with new revenue.
“There is a big difference between if there is some available funds for the short-term up front, but there is not the ability without replenishing [the PTTF] and a sustaining and recurring revenue to do that as a long-term solution,” Bradford told the Philadelphia Inquirer on Wednesday.
Shapiro also said last Monday that he would not support a deal that diverted transit dollars to roads.
Still, transit funding is only one piece of the broader budget stalemate. Shapiro’s latest budget pitch totals $49.9 billion — a five percent spending increase over last year (down from his original $51.4 billion proposal in February). Senate Republicans have pressed for tighter spending, with some members reportedly demanding a cap under $48 billion. The resulting impasse has left billions for schools, counties, and social service providers on hold.
The PA Chamber last week issued a statement on transportation legislation, urging lawmakers to reach compromise and “work together in an expeditious, bicameral, and bipartisan manner to craft pragmatic funding and reform legislation that meets the Commonwealth’s transportation needs,” and cited several alternative solutions for compromise.
“We support a comprehensive approach that complements any funding proposals with meaningful reforms to strengthen Pennsylvania’s transportation systems statewide, including other pending proposals to support transit agencies,” the PA Chamber’s letter stated. “For example, Senate Bill 383 should be included in a final compromise to modernize the decades-old law that caps damages when transit agencies are subject to civil lawsuits. Otherwise, the law is currently at risk of being declared unconstitutional, which transit agencies have warned could create severe financial distress.”
“Additionally, we encourage lawmakers to consider revenue generation proposals that are the product of compromise,” the letter continued. “For instance, we understand the rideshare industry has expressed openness to considering additional taxes or fees as part of a package that would include language they have sought to codify key elements of their workforce structure. Such a compromise would not only generate revenue but also benefit consumers by providing stability to the industry.
With the budget now more than two months late, lawmakers from both sides are under growing pressure. Business and civic leaders have warned that continued delay risks compounding disruptions to transit, social services, schools, and local governments. The PA Chamber continues to engage with lawmakers and the administration to encourage a responsible, growth-oriented budget agreement that supports Pennsylvania’s economic competitiveness and long-term stability.