Pennsylvania governor anticipates a deal ‘very soon’ as lawmakers blow through the budget deadline

HARRISBURG, Pa. (AP) — Gov. Josh Shapiro and Pennsylvania’s politically divided Legislature will miss Pennsylvania’s legal deadline to pass a budget for the new fiscal year, amid closed-door talks to try to produce a compromise on a spending plan.

Without the Democratic governor’s signature on a new spending plan, the state loses some of its spending authority starting Tuesday, particularly on discretionary payments, such as those to vendors, counties, public schools and grant applicants.

The impact of such missed payments generally takes until August to be felt by schools and counties.

The biggest issues swirling around budget talks are how to absorb a massive increase in Medicaid costs and a Republican push to regulate and tax tens of thousands of slot machine-like “skill” games that are popping up everywhere. Meanwhile, top priorities for Shapiro are boosting funding for public school s and public transit agencies.

Shapiro said at a news conference Monday that talks between top lawmakers went through the weekend and that he anticipates negotiators will agree on a plan “very soon.”

On Monday evening, Senate Republicans said they “have taken actions on several key components of the budget, to fund certain government functions” over the past two weeks.

“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,” read the joint statement from Pennsylvania Senate President Pro Tempore Kim Ward (R-39), Senate Majority Leader Joe Pittman (R-41) and Senate Appropriations Committee Chair Scott Martin (R-13).

Shapiro proposed a $51.5 billion plan for the 2025-2026 fiscal year beginning July 1. It would increase total authorized spending by 9% for state operations, or by about $3.8 billion, including a $230 million request for the current year’s spending.

In a budget stalemate, the state is still 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 a governor’s jurisdiction are typically expected to report to work and be paid as scheduled during a budget stalemate.

Under the state constitution, the budget must be balanced. For Shapiro, it will be his third straight budget that failed to get across the finish line by the legal deadline of July 1.