Budget Battle Persists Despite Public Transit Temporary Fix
Democratic leaders have sounded less optimistic. Senate Democratic Leader Jay Costa (D-Allegheny) told the Pittsburgh Post-Gazette last week that “anything could happen.”
Source: PA Chamber of Business and Industry
Pennsylvania’s state budget impasse has now stretched into its third month, with negotiations continuing behind closed doors and lawmakers again signaling a potential agreement could be reached soon.
However, one major sticking point in the talks, public transit funding, appears to be off the table for now. Last Monday, Gov. Josh Shapiro’s administration approved a temporary fix that allows the Southeastern Pennsylvania Transportation Authority (SEPTA) to shift up to $394 million from its capital assistance fund to cover operating costs for the next two years. Other transit agencies have signaled they may pursue that option as well.
The move mirrors a concept backed by Senate Republicans, who had previously pushed to use the state’s $2.4 billion Public Transportation Trust Fund to avoid service cuts. Democrats previously opposed the idea, citing risks to long-term infrastructure needs, but Shapiro said the fix removes the transit issue from the budget table and clears the way for broader negotiations. He added that talks are now focused on “narrow” differences around overall spending levels.
The budget was due on June 30, but negotiators remain divided on key fiscal and policy issues. The protracted stalemate has held up payments to school districts, counties, hospitals, and human services providers.
Shapiro originally proposed a $51.5 billion budget in February. The Democratic-controlled House later passed a $50.6 billion plan that included added funding for schools and transit. Senate Republicans countered with a $47.6 billion measure that flat-funded programs at last year’s levels, arguing the Commonwealth cannot spend more than its roughly $45 billion in annual revenue without drawing down reserves or raising taxes.
None of the proposals have bridged the gap between the chambers, and leaders continue to spar over whether spending levels are sustainable. Republicans have warned against tapping the state’s Rainy Day Fund, while Democrats argue that more investment is needed in education, human services, and other priority areas.
Senate Majority Leader Joe Pittman (R-Indiana) said last week that the transit development has led to more frequent and detailed talks that could yield a final deal within days. Senate President Pro Tempore Kim Ward (R-Westmoreland) suggested the PA chamber could move a partial spending bill to at least release funding for agreed-upon items.
The Senate adjourned last week without scheduling its next voting day until Oct. 20, but told members they could be called back on 24 hours’ notice if a deal is reached. Meanwhile, the House held a series of non-voting session days to prepare legislation for quick action when an agreement comes together.
For now, the principal negotiators — Shapiro, Pittman and House Majority Leader Matt Bradford — reportedly remain engaged in talks. While both parties acknowledge progress, a “global agreement” on the budget has yet to emerge.