Proposed Pa. budget nearly quadruples funding for local government cooperation

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A state program that incentivizes local governments in Pennsylvania to work together to provide public services would see its funding nearly quadrupled under a proposal from Gov. Josh Shapiro.

In his first budget as governor, the Democrat has pitched a 266% funding boost to the Municipal Assistance Program, which pays up to half the cost of eligible projects in which municipalities collaborate to deliver government services more efficiently.

The increase — from just over half a million to $2 million — would “set the groundwork for the rehabilitation and growth” of Pennsylvania communities, Shapiro wrote in the proposed budget. The proposal projects the same amount of expanded support can be funded through the 2027-28 fiscal year.

Pennsylvania contains 67 counties and more than 2,500 townships, boroughs, and cities. These municipalities vary widely in size, but the same sets of rules determine their organization and responsibilities. Regardless of their capabilities, each local government must provide the same level of basic services to taxpayers.

This uniform standard imposes disproportionate costs of operation, especially on smaller municipalities. That burden has led to slow economic growth in many parts of Pennsylvania, according to a 2003 study.

The Municipal Assistance Program was created to encourage collaboration across municipal boundaries to address this dilemma. A common example of intergovernmental partnership is when multiple localities make bulk purchases together and benefit from discounts that save taxpayers money.

The state Department of Community and Economic Development (DCED) administers the program and funded 10 projects in 2022. The approved grants — totaling $326,000 — went to Allegheny, Bradford, Butler, Carbon, Cumberland, Elk, Luzerne, Lycoming, Venango, and Westmoreland Counties for various regional comprehensive plans, Spotlight PA learned through a public records request.

Venango County plans to use the $37,000 it received to update its nearly two-decade-old comprehensive plan to establish new goals and policies. In Bradford County, Towanda Borough, Towanda Township, and North Towanda Township plan to use their allotment to update a regional plan that steers how they manage local industries.

Lisa Schaefer, executive director for the County Commissioners Association of Pennsylvania, said this type of comprehensive planning helps ensure “there is a long-term vision” for regional growth.

How well local governments implement the recommendations of such plans is a barometer of the success of the grant program, Penny Ickes, a DCED spokesperson, told Spotlight PA in an email.

The proposed funding raise would “allow DCED to work with more communities overall, and that’s a good thing because demand is high,” Ickes wrote. The additional money would allow the program to assist up to 65 local governments over the next fiscal year, according to budget estimates from the Shapiro administration.

There is a “great need” for cooperative ventures among Pennsylvania local governments, and the current program funding level doesn’t reflect the need fully, said Ron Grutza, senior director of regulatory affairs at the Pennsylvania State Association of Boroughs. He called the proposed funding increase “significant” and said it could foster more collaboration among local governments.

“In reality, municipalities are working together,” John Brenner, executive director for the Pennsylvania Municipal League, told Spotlight PA. Partnerships across boundaries, such as those among police and fire departments, are commonplace, he said, but local governments face challenges as the costs of providing public services balloon.

Brenner said his organization supports Shapiro’s proposal and favors its broader goals.

“One of the answers is [for local governments] to get together with their neighbors to help taxpayers afford those services,” Brenner said. “The great thing about this [program] is the state is encouraging the conversation.”

State Rep. Bob Freeman (D., Northampton), who chairs the House Local Government Committee, told Spotlight PA that the proposed funding increase “is a very promising start … for the state to step up to the plate and provide more support for municipalities.”

While budget negotiations will continue into late June, Freeman said there’s “a good likelihood” local governments will see more state grants to help with shared services in the new budget.

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