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Pennsylvania budget agreement is elusive as fiscal-year deadline nears

Pennsylvania House Speaker Joanna McClinton, D-Philadelphia, presides over the state House of Representatives at the Capitol in Harrisburg, Pa., Thursday, June 29, 2023.
Matt Rourke
Pennsylvania House Speaker Joanna McClinton, D-Philadelphia, presides over the state House of Representatives at the Capitol in Harrisburg, Pa., Thursday, June 29, 2023.

Gov. Josh Shapiro and Pennsylvania's politically divided Legislature appeared on track Thursday to start the state's fiscal year without a spending plan in place, with closed-door talks yielding optimism from Republicans, but discontent from Democrats.

For Shapiro, getting his first budget across the finish line is perhaps the biggest test yet of his political skills under the Capitol dome.

Republicans have spoken positively of their discussions with Shapiro, but discussions with Shapiro's fellow Democrats have been strained — in part by Shapiro siding with Republicans on a plan to send $100 million to private schools.

Many Democratic lawmakers have muted their criticism of an emerging budget agreement between Republicans and Shapiro, but they say it doesn't carry nearly enough money for public schools and they oppose the proposed new private school “voucher” program.

The 2023-24 fiscal year begins Saturday, and Shapiro's signature on a new budget bill is required to maintain full spending authority.

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Budget negotiators have revealed little about their private discussions.

“We would like the budget to be on time. But more than anything, we would like a budget to make significant investments in the commonwealth that are necessary and needed,” House Appropriations Committee Chairman Jordan Harris, D-Philadelphia, told reporters.

Shapiro has not appeared publicly in the Capitol, and instead has held meetings inside his official residence in Harrisburg. In a statement Thursday, he acknowledged the divide for the first time and pointed a finger at lawmakers.

“After a dozen years of total Republican control of the Legislature, Senate Republicans need to give more than they’re used to," Shapiro said. “And after a dozen years in the minority, House Democrats can’t expect to get everything they’ve wanted over the last decade in one budget.”

The state’s massive reserves — built up by inflation-juiced tax collections and federal pandemic subsidies — have eased spending decisions.

But the last few days have become particularly contentious, as a constellation of public school advocates, including school boards and labor unions have organized to oppose the $100 million program to pay for children to attend private or religious schools.

Under it, a family would get $10,000 to use for private school tuition and fees for 1st through 12th grade.

An eligible student must attend one of the state's 15% lowest-performing schools, based on math and reading scores on standardized tests, and come from a family that makes under 250% of the federal poverty level, or $75,000 for a family of four.

The plan passed the Senate on Thursday night, 29-21, with every Republican in favor of it and all but one Democrat opposing it.

Republicans say it will provide better education options for students in failing schools. Democrats contend that it will further drive inequality in schools, and empower unaccountable and unaudited private and religious schools that can cherry-pick the students they want and discriminate against the students they don't want.

House Majority Leader Matt Bradford, D-Montgomery, flatly said Thursday night that Democrats are united against the private schools bill and that it will not pass the chamber.

“There are not the votes for it, it's not coming up and, if it comes up, it will be defeated,” Bradford told reporters.

Democratic lawmakers also say the Senate Republicans' yet-to-be-published budget bill does not adequately fund public schools — just months after a landmark court decision that found Pennsylvania’s system of funding public schools violates the constitutional rights of students in poorer districts.

Another irritant in budget talks is a House Republican bloc that is holding up hundreds of millions of dollars in annual aid to Penn State, Temple University and the University of Pittsburgh.

Without new spending authority in place by Saturday, the state will be legally barred from making some payments, although a stalemate must typically last weeks before an effect on services is felt.

In a long-term stalemate, the state is legally bound to make debt payments, cover Medicaid costs for millions of Pennsylvanians, issue unemployment compensation payments, keep prisons open and ensure state police are on patrol.

All state employees under Shapiro’s jurisdiction will continue to report to work and be paid as scheduled, an administration spokesperson said.