As Pennsylvania lawmakers once again blow past their June 30 constitutional deadline, many residents might shrug. But if a full spending plan and its companion code bills are not in place early in the second week of July (around July 10), the state Treasury will lack legal authority to release the first mid-month wave of education and human‑services payments. That puts school districts, nonprofits, and the most vulnerable Pennsylvanians on the hook for another round of political brinkmanship.
A refresher on the stalemate
- Why we are here. 2025 marks the fourth straight late budget as House Democrats and Senate Republicans brawl over how large to make new education subsidies, how to close a $2.5 billion Medicaid hole, and whether to legalize or tax slot-like “skill games.”
- Shapiro’s “sleight of hand.” As MyChesCo pointed out recently, Governor Josh Shapiro’s proposal leans on roughly $4.5 billion in one‑time reserves to balance the books—today’s spending that morphs into tomorrow’s tax hike.
Senate Republicans push back
Senate leaders have defended their efforts, emphasizing responsible budgeting and taxpayer protection. Senate President Pro Tempore Kim Ward, Majority Leader Joe Pittman, and Appropriations Chair Scott Martin stated:
“Standing up for families and taxpayers remains our focus as work to finalize the 2025‑26 state budget continues to advance…Pennsylvania is facing a multi‑billion‑dollar structural deficit that we must address this year to prevent a financial crisis and tax increases in the future…We will continue to work with all parties to reach a final agreement on a spending plan that respects taxpayers, while allowing Pennsylvania to grow.”
This signals that although parts of the budget have moved, GOP leaders remain determined to avoid permanent commitments they say could exacerbate structural shortfalls.
Why “around July 10” matters
The Department of Education normally releases a cluster of basic‑education, special‑education, Ready‑to‑Learn and Pre‑K subsidies during the second week of July. Past impasses show that once those checks are missed, districts with limited cash are forced into costly short‑term borrowing, while nonprofits that provide child‑welfare or mental‑health services begin furlough planning.
What history tells us
- During the 2015–16 nine‑month impasse, districts statewide borrowed ≈ $900 million — with at least $11 million in interest costs just to stay open.
- Philadelphia alone cleared the half‑billion‑dollar mark in emergency notes that year.
- Borrowing is far pricier now. A two‑month, $20 million TRAN at today’s 4.2 % yield would rack up ≈ $140,000 in interest — triple 2015’s sub‑1 % cost.
How Chester County could feel the squeeze
- School districts with slim cushions. Any district running less than one to two months of operating cash — including historically cash‑tight systems such as Coatesville Area and Octorara Area — would likely tap credit lines by late July if the state money stalls. Coatesville’s 2024 audit shows $33 million of general‑fund balance (≈ 20 days of expenses on its $600,000‑per‑day burn rate); Octorara reported $10.7 million on a $59 million budget (≈ 66 days).
- Non‑profits on razor‑thin margins. County‑administered mental‑health, substance‑abuse and child‑welfare programs expect to miss reimbursements the last week of July and first week of August, forcing many to draw on lines of credit or reduce services.
The real cost of political theater
Every borrowed dollar is a dollar not spent on classrooms, therapy sessions, or shelter beds. Worse, high interest rates mean each week of delay now burns cash three or four times faster than during prior impasses. Shapiro’s one-time gimmicks may paper over the problem, but once the bills come due, they only compound the pain.
A path forward
Lawmakers should:
- Pass a clean stop‑gap to cover essential education and human‑services funding while the rest of the budget is hashed out.
- Drop the budget parlor tricks. Build recurring spending on recurring revenue, not one‑time reserves.
- Finalize the code bills together with the appropriations bill so Treasury can release the funds.
Bottom line
If Harrisburg does not cut a deal by around July 10, the paper stalemate will morph into real-world pain almost immediately. Schools, nonprofits, and everyday Pennsylvanians in Chester County and beyond deserve better than another summer of budget roulette.
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