Bad blood, technicalities, and complicated code bills keep the Pa. budget in limbo

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HARRISBURG — While both chambers of the Pennsylvania legislature have passed a budget spending plan that Gov. Josh Shapiro says he’ll sign, legislative technicalities and bad blood over an axed school voucher proposal are prolonging the commonwealth’s week-long impasse.

Still left undone are budget-enabling code bills, at least one of which must be passed alongside the main spending plan legislation.

Also causing the delay is a mundane constitutional prerequisite for bills to become law: Before legislation goes to the governor, presiding officers in both chambers must sign it.

The spending plan bill has been signed by the state House speaker, but not by the lieutenant governor, who presides over the upper chamber. But leadership in the state Senate has announced no plans to return to Harrisburg until September, claiming that Shapiro “decided to betray” their trust.

The conflict emerged Wednesday when Shapiro, a Democrat negotiating the first budget of his administration, pledged to line-item veto a private school voucher proposal from the deal he’d previously negotiated with state Senate Republicans, in exchange for state House Democrats’ support.

The Republicans’ implicit threat of an extended recess now puts that $45.5 billion spending plan in legislative purgatory, along with any other bills that have passed both chambers but still need a state Senate signature — like a measure that would expand the state’s property tax rental rebate for older adults.

At a news conference Thursday afternoon, Shapiro reiterated his support for the just-passed budget. He blamed the state Senate for failing to get the state House on board, and urged the upper chamber to get the bill to his desk as soon as possible.

“I hope the Senate will be responsible stewards of the public trust and return to Harrisburg to sign this bill,” Shapiro said.

Later that day, state Senate President Pro Tempore Kim Ward (R., Westmoreland) made it clear Shapiro’s comments didn’t ease the tension, and made no promises to reconvene her chamber.

“The truth is there was a deal regardless of what Gov. Shapiro says publicly and he knows there was a deal,” Ward said in an emailed statement. “Senate Republicans worked in good faith with Gov. Shapiro for nearly two months making concessions and giving him all the goodies he wanted with his promise to work with his party and bring [the voucher program] across the finish line.”

It is unusual for a chamber to neglect to sign a bill, but not unprecedented. At the end of the legislative session in 1992, a bill aimed at expanding coal mining regulations passed both chambers and was signed in the state House, but wasn’t in the state Senate. That prevented it from going to the governor for approval, and it never became law.

A similar bill would become law after another two years, said David Hess, a former Department of Environmental Protection chief who in 1992 worked for the state Senate. At the time, the state Senate said the original mining bill had been “just forgotten because it was the end of the session,” Hess told Spotlight PA in an email.

But in this scenario, if state Senate leadership continues to refuse to sign the budget bill, Pennsylvania will be without an enacted spending plan for several months, a delay that could lead to some public services running out of money.

Pennsylvania has faced longer impasses than the current seven-day deadlock, and the significant effects aren’t immediate. Even without a budget, the commonwealth is legally required to keep paying state workers and to fund entitlement programs like Medicaid.

However, local government entities that receive state dollars could start to feel the effects within a few months.

Lisa Schaefer, executive director of the County Commissioners Association of Pennsylvania, said that counties’ human services, including child welfare and mental health resources, will likely be strained by August without a state budget.

Mackenzie Christiana, spokesperson for the Pennsylvania School Boards Association, said in an email that the impact won’t be apparent until the start of the school year, and will vary district to district depending on each one’s reserves.

“A drawn-out budget impasse also has the potential to present cash flow issues for school districts,” Christiana told Spotlight PA in an email. “As state subsidies are not flowing in, school districts still need to find money to pay salaries, utilities, and other mandated costs.”

Solving that funding conundrum, Christiana noted, could include either taking out loans or cutting services.

The other issue standing in the way of a budget resolution is the set of code bills that are traditionally passed alongside budget appropriations to direct how money is disbursed. They amend the state laws that control taxation, spending, education, welfare, and other public services.

At least one code bill, the fiscal code, must pass annually to update the state’s spending authority for the new fiscal year. But the package is usually much, much broader. Along with enacting spending, codes function as omnibus vehicles to make policy tweaks and fund local projects in one fell swoop amid hectic budget talks.

Past code bills have included measures preempting local governments from banning plastic bags, allowing college athletes to sign endorsement deals, and approving the use of electric scooters in Pittsburgh.

Code bills can also be useful political tools. They frequently include sweetheart language giving extra funding to select school districts, hospitals, or other local organizations to win over the support of key lawmakers. Such deals are akin to federal earmarks and are referred to as “walking around money,” or WAMs, in Harrisburg.

But unless state House Democrats and state Senate Republicans can come to an agreement on what to include, which could be tricky given the acrimony currently engulfing Harrisburg, the budget will remain unfinished.

The tension can be traced to late June, when Shapiro’s administration sent a letter to the state Senate affirming the governor’s support for private school vouchers for students in low-performing districts.

Republicans, many of whom receive large campaign checks from school choice backers, seized on that public support and added $100 million in vouchers to the budget bill they negotiated with Shapiro. They passed it before the June 30 deadline with a 29 to 21 vote. Just one state Senate Democrat supported the measure.

The inclusion of vouchers, state Senate Republicans claimed, allowed them to justify backing higher state spending than they would have liked. But state House Democrats, backed by their allies in organized labor such as teachers unions, dug in their heels and refused to vote for a budget with voucher funding.

After a stalemate over the Fourth of July weekend, Shapiro publicly backed down from including vouchers in this year’s budget and said he’d line-item veto their funding — a move that allows governors to cut specific provisions from budgets without sending them back to the legislature for approval.

State House Democrats, backed by a handful of Republicans, then passed the spending plan 117 to 86 Wednesday night. But in winning state House Democratic support, Shapiro has lost standing with state Senate Republicans.

“Senate Republicans negotiated in good faith with Governor Shapiro on the state budget since the beginning of June, with the direct understanding that agreement with his Administration would translate into agreement with his majority party in the House,” state Senate Majority Leader Joe Pittman (R., Indiana) said, adding that he believes Shapiro “overpromised his ability to unify his own party.”

State House Democrats have said they are currently drafting code bills, but haven’t specified what policies or programs will be included. They and the governor’s office have also downplayed the importance of the bills, arguing the state has broad spending authority already.

“The people of Pennsylvania don't typically understand what a fiscal code, a school code [is] — they don't get all of the minutia,” Harris told reporters Thursday. “What they know is that they expect their government to run and to run efficiently.”

Republicans, however, have disagreed, arguing that no code bills means the state can’t spend money on a number of preexisting programs — such as a grant program for homeowners and landlords to fund repairs — that the new budget would fund with state dollars in lieu of the federal funds that previously paid for them.

State Treasurer Stacy Garrity’s office has noted similar concerns, although it did not cite any specific programs.

If a budget bill is signed without the code bills that traditionally accompany it, the Pennsylvania Treasury could deny some state payments due to "a lack of sufficient spending authority," agency spokesperson Erik Arneson said in an email.

“Any such decisions will be made on a case-by-case basis after a thorough review by Treasury’s fiscal review team,” he added. “If a payment request is returned to an agency, the agency could wait until the relevant code bill is enacted and resubmit that request.”

Shapiro declined to comment on code bill specifics Thursday, saying only that he urges state House Democrats and state Senate Republicans to work together and “iron out” the details.

“They need to understand each other's perspectives and they need to meaningfully engage with one another. And we need to learn how to close the deal together with one another,” Shapiro said.

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