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By Stephen Caruso & Katie Meyer | Spotlight PA
Credit: Kalim A. Bhatti/Philadelphia Inquirer
As Pennsylvania lawmakers continue to debate whether to fund parts of the state budget, people who run key programs around the commonwealth are being forced to make tough decisions.
A Philadelphia nonprofit that provides wardrobes to low-income people has let go of staff. Preschools and community colleges have taken on debt to pay bills. And a library in the Poconos has cut back on programming including a visit from Santa.
Democratic Gov. Josh Shapiro signed off on a $45.4 billion budget plan this summer — more than a month after the June 30 deadline — assuaging widespread fears among county and school administrators that they would not receive needed state funding.
But the Democratic-controlled state House and GOP-led state Senate still haven’t finalized code bills that authorize and direct certain spending amid a dispute about whether to create a taxpayer-funded school voucher program.
In a letter this August, Shapiro’s budget secretary Uri Monson listed some of the programs that would be affected by the lack of accompanying code legislation, including newer ones like a popular home repair assistance initiative and funding for public defense.
At the time, it wasn’t clear exactly how many programs would see funding interruptions. Now, as the stalemate lingers, more and more groups are feeling the pain.
The continued absence of code bills has caused missed payments for community colleges and library districts, administrators said. Other organizations told Spotlight PA a lack of communication around the timing and amounts of future payments has prompted them to dip into reserves or preemptively cut costs.
Ann Shincovich, the library director at the Pocono Mountain Public Library in Monroe County, told Spotlight PA that lawmakers’ gridlock has “completely destabilized our funding.”
“I feel like it’s all OK for them to [argue over] politics until stuff stops working,” Shincovich said. “In your home, say your parents are fighting with each other. That doesn’t mean that they can stop paying the bills. They still need to make it happen.”
State lawmakers are not due back in Harrisburg until the second week of December. And it’s anyone’s guess when or whether they will be able to agree on the final pieces of this year’s budget.
Uncertainty for libraries, educators
Shincovich has been the library director at the Pocono Mountain Public Library since 2004 and is no stranger to budget impasses.
One under former Gov. Tom Wolf dragged on for months in 2015 with no sign of a deal, and led to cuts in services and staff from which libraries are still recovering. Employees laid off during these periods are often gone for good as libraries can’t compete with pay elsewhere, while cut programming leads locals to find alternatives that they stick with, Shincovich said.
“Once you start getting on this type of a cycle where you’re taking a hit in services and staffing and funds, it takes a lot to recover,” she said. “Starting things back up again is very time-consuming and expensive.”
The current impasse is a little different.
The state allocated $70 million to libraries in the budget Shapiro signed in August. But absent the enabling code bills, payments have not gone out to Pennsylvania’s 29 library districts, which coordinate supplementary services for multiple libraries in a region and usually get their state allocations as soon as the budget is signed, according to Christi Buker, executive director of the Pennsylvania Library Association.
Library districts may coordinate interlibrary transfers, pay for Wi-Fi, or purchase subscriptions to databases or audio and e-book providers for multiple libraries, Buker said. Those contracts will start to renew in December and may have to be cut without state dollars to foot price tags that can go above $100,000.
Individual libraries usually don’t get their first state payment of the fiscal year until January. But given this year’s uncertainty and libraries’ narrow operating margins, Shincovich said she has been forced to act like the payment may not come to the Pocono Mountain Public Library.
Shincovich said she has already started to cut back programming to avoid running out of money come the darkest stretch of winter. That has included cutting a chair yoga class, canceling book purchases, and not bringing Santa to the library to hand out treats to kids.
“When they don’t pass the budget, these are the things we have to look at,” Shincovich said. “There’s nowhere else for us to make corrective choices.”
Community colleges are in a similar position, said Tuesday Stanley, president of Westmoreland County Community College and the chair of the Pennsylvania Commission for Community Colleges.
They received $260 million in the budget Shapiro signed in August, a 2% bump. Generally, this money is distributed to community colleges in quarterly payments; the last check went out in June. Without a fiscal code, however, Stanley said community colleges are on track to miss at least two payments even if lawmakers finish the budget by December.
As a group, the 15 schools have agreed not to cut academic expenses to protect students and faculty, Stanley added. That means colleges are either taking out expensive loans or tucking into financial reserves to make ends meet.
Making new debt payments or losing out on the interest payments they would typically get on the reserves in their bank accounts will negate the benefits of the 2% increase in state aid, Stanley said.
“We are not making any new purchases and we’re reviewing every single thing that we’re paying for to see if we can defer it so that we don’t have to take out our reserves or cut any services,” she told Spotlight PA.
Stanley called for the legislature to pass a bill that releases community colleges’ funding, or for Shapiro to authorize payments without code bills as he’s done in other cases.
Wanted: a fiscal code
Funding challenges have also been immediate for some smaller nonprofits — but for different reasons.
In Philadelphia, for instance, a freeze on a state program that provides Temporary Assistance for Needy Families recipients with clothing has led a local nonprofit to lay off staff and dig into its bank account to stay open.
Mars Sharrock, program director at The Wardrobe, which provides free clothes to low-income individuals, said the group receives half its annual funding through PA Workwear, which is in turn funded through the Department of Human Services.
But PA Workwear doesn’t have a line item in the state budget. Instead, the fiscal code usually directs DHS to spend a certain amount of money on the program. In the past, the number has been $2.2 million, which would be a fraction of the $16 billion DHS got in this year’s budget.
Because the legislature hasn’t passed a fiscal code this year, that spending direction hasn’t gone to the department.
In late August, after the spending plan passed, DHS sent a letter to county assistance offices telling them to stop referring TANF recipients to The Wardrobe and other PA Workwear participants.
“While the legislature passed a budget for this state fiscal year which was signed by the Governor, the Department does not have the ability to approve payment for programs whose grants and/or contracts have expired under last year’s budget and are not funded via the current budget,” the letter, which was viewed by Spotlight PA, said.
“So in order to get this funding, we need the fiscal code to pass,” Sharrock told Spotlight PA. “This is impacting a lot of other smaller service organizations.”
Sharrock said that The Wardrobe has taken on clients anyway. It has made up for the funding deficit by cutting into reserves and laying off staff, including a community outreach coordinator who attended events to plug the program’s services.
“We are a healthy organization. We have a healthy amount of reserves that we use in an emergency,” Sharrock said. “And it is an emergency, so we have been using them.”
Language reauthorizing PA Workwear is included in a bill that passed the state House in October. The legislation would also create a state medical debt relief fund and reauthorize a home repair grant program, among other proposals. The state Senate has not voted on the measure.
The path to impasse
The state Senate passed the main budget bill this summer after Republican leadership said they reached a deal with Shapiro to include $100 million for private school vouchers. When the bill was sent to the state House, however, Democrats balked at the program and demanded Shapiro reject the provision.
Shapiro did so, clearing the way for his signature and a finished bill.
But the governor’s administration agreed that it would not authorize spending on several Democratic priorities included in the main budget bill unless state lawmakers passed additional legislation.
Over the past five months, lawmakers have passed some small code bill items seen as more immediately pressing. These include the reauthorization of a hospital assessment that supports medical coverage for low-income people and a reimbursement increase for ambulances.
Recently, there have also been signs that partisan tensions are thawing. An impasse over funding for Pennsylvania’s four state-related universities — Lincoln, Penn State, Pitt, and Temple — broke in mid-November, when the state House and Senate reached a compromise that sent more than $600 million in aid to the schools.
The deal flat-funded all but Lincoln and a Penn State-affiliated tech school while axing a proposed tuition freeze. Lawmakers also approved a separate bill expanding the amount of information the schools must publicly release, including the names and salaries of an additional 175 of their highest-paid employees.
That same week, the two chambers continued their ongoing standoff over code legislation, this time approving dueling proposals to enable hundreds of millions of dollars in spending for student teachers and universal school breakfast, among other things.
The proposal from state Senate Republicans includes a $150 million increase to a state tax credit for private school scholarships and passed the chamber by a bipartisan 45-5 vote.
State House Democrats, who in October passed a similar increase in a different bill with their own priorities, stripped the tax credit out of the legislation and sent it back to the upper chamber.
That same bill also includes authorization for the state to distribute library and community college funding. Its fate is now uncertain.
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