HARRISBURG — Pennsylvania enters the new fiscal year on Wednesday without a state budget in place for a fifth consecutive year, while top leaders in the politically split legislature publicly disagreed over whether a deal was near.
Lawmakers in the Republican-controlled Senate and the Democratic-led House have known for months that Pennsylvania faces fiscal straits, as the state is on a path to spend more than it brings in in revenue in fiscal 2027. Top negotiators have spent weeks meeting behind closed doors about how the state should spend more than $50 billion in taxpayer dollars, in hopes of avoiding another drawn-out budget impasse.
Under first-term Democratic Gov. Josh Shapiro’s proposed $53.2 billion budget, Pennsylvania would spend $4.8 billion more than its $48.6 billion in projected revenue and would require lawmakers to create new revenue streams, cut spending, or raise taxes — or dip into the state’s reserves.
Senate Republicans on Tuesday recessed until legislators have a final budget deal to vote on, with Senate Majority Leader Joe Pittman (R., Indiana) saying that there is “no reason we cannot conclude our work early next week” and that lawmakers “have a very good trajectory in front of us.”
Pittman — a top negotiator in the closed-door talks — made those remarks just one day after a Senate committee voted to gut the main spending bill in Shapiro’s budget proposal, which was approved by the House in April, from $53.1 billion to $25 million.
In a news conference Tuesday, House and Senate Democratic leaders offered a different picture: Despite lawmakers traditionally staying in Harrisburg in the days leading up to July Fourth in hopes of hashing out a deal, Senate Republicans are already packing up for the holiday weekend, the Democrats said, and are politically motivated to hold up the state budget. (House Democrats later canceled their scheduled legislative session on Thursday.)
“[Senate Republicans are] going to tell you that progress is being made, and that it’s important that we allow time for members to go home for the weekend. And by the way, it’s Tuesday,” said Senate Minority Leader Jay Costa (D., Allegheny).
“The bottom line is they’re not serious about getting a budget done, they’re slow-walking this process for weeks and weeks, and we’re calling them on it,” Costa said.
Shapiro echoed the same frustration with Senate Republicans in an interview Tuesday, adding that the Senate “decided to go home on vacation” when lawmakers are due to deliver a budget bill to him for his signature.
“I think it’s disrespectful to the people of Pennsylvania,” Shapiro said, noting that Pennsylvania has a revenue surplus. “They should be here, and they should be working. And instead, they ran away.”
Senate GOP leaders, in a statement following their recess Tuesday, said they believe they are “well on our way to effectuating a full budget agreement in the days.”
House Minority Leader Jesse Topper (R., Bedford) told reporters that legislative leaders have been constantly in contact “over the past month” no matter if members are in the building.
“At the end of the day, the talks continue,” Topper said. “This kind of stunt feels a lot like politics.”
Top legislative leaders have been tight-lipped about what the remaining sticking points are in budget talks.
Pennsylvania is constitutionally required to deliver a balanced budget by the start of the new fiscal year on July 1, releasing state funds which are then sent to school districts, county governments, and nonprofit organizations that offer critical services to residents.
The true impact of the missed deadline won’t be felt by local governments and schools for weeks. However, these entities are often required by law to submit their own budgets despite inaction by the state, often leaving them unable to predict how much state money to budget. State employees and lawmakers continue to receive pay during a state budget impasse.
Last year, a nearly five-month budget impasse required schools, counties, and service providers to cut jobs, take out high-interest loans, or stop services altogether. The School District of Philadelphia, the state’s largest school district, borrowed $1.5 billion to pay its bills, resulting in $30 million in interest and borrowing costs that weren’t repaid when the state approved its annual spending plan.
Lawmakers were at a bitter standstill about whether to allocate a new, reliable funding stream for public transit, reviving the state’s long-held rural-urban divide. Members also couldn’t agree on how much to spend, until ultimately reaching a $50.1 billion budget deal in November 2025.
This year, both chambers have slim margins for budget votes: House Democrats hold a one-seat majority, while Senate Republicans have a three-seat majority with several conservative members who rarely support spending increases. This often means legislative leaders must work with the minority parties to come to a final deal.
On Monday, Senate Republicans leaders did not show up to a scheduled meeting with Shapiro and Democratic leaders, Costa said, signaling potential discord.
Legislators still need to reach agreements on a number of issues, including whether to tax and regulate so-called skill games differently from slot machines and whether the state should overhaul existing school choice programs.
Democrats have wholly backed Shapiro’s budget proposal, which included legalizing recreational marijuana and raising the state minimum wage. Republicans have emphasized a need to slow down spending, citing the state’s structural deficit.
The leaders will also trade a number of legislative priorities in closed-door meetings unrelated to state spending as part of an overall deal, such as data center oversight proposals.
In Pennsylvania, the state budget topped $50 billion for the first time last year. It had increased by 25% — about $10 billion — over a five-year period.
