Pennsylvania Stands Alone: Only US State Without Budget After 100 Days as Schools Miss $3.76 Billion

Pennsylvania is the ONLY US state without a budget 100+ days past deadline. All 500 school districts waiting on $3.76 billion in unpaid state funding. Districts exhausting reserves, borrowing millions at 4.5% interest, preparing service cuts affecting 1.7 million students. Unprecedented governance failure. Tweet Now Follow Learning Success

When Schools Become Borrowers: The Real Cost of Political Dysfunction

School districts across Pennsylvania are being forced into difficult financial decisions with real costs. Lancaster School District approved a $35 million loan. River Valley School District in Indiana County borrowed $5 million. Districts taking these emergency loans face 4.5% interest rates with no guarantee the state will reimburse their borrowing costs—meaning local taxpayers will absorb hundreds of thousands of dollars in interest charges caused by state dysfunction.

The Pennsylvania Coalition Against Domestic Violence discovered their authorized $5.8 million loan would cost $260,000 in interest, making it financially untenable and forcing potential service cuts instead. Meanwhile, the state’s mental health crisis deepens: suicide ranks as the second-leading cause of death for children ages 10-14 and third for teens 15-18, yet the programs designed to help them face funding uncertainty.

Pittsburgh Public Schools alone is missing $50.6 million in expected state payments and projects it could run out of money entirely by mid-October. The district has applied for a $28.7 million state advance, but CFO Ron Joseph warns that relying on reserves is unsustainable. Across Allegheny County, 43 school districts are collectively waiting on $210 million.

State Treasurer Stacy Garrity, the leading Republican gubernatorial candidate, announced a $500 million short-term loan program in September to provide relief to entities affected by the impasse. However, the program sparked immediate controversy. Garrity’s loans are available only to county governments and Head Start providers—not school districts, despite schools being the largest affected group. Critics also questioned whether the Treasurer’s office even has legal authority to make loans rather than investments. Initially offering loans at 4.5% interest, the program proved too expensive for many providers.

Laura Lurns Learning Success Expert

How the MSM Has Misled

• Multiple Sources: "Tensions ran high with lawmakers from both parties" — This false equivalence framing presents the crisis as typical partisan brinksmanship when Pennsylvania is literally the ONLY state in America without a budget. The "both sides" narrative obscures that the House has passed multiple compromise budgets while the Senate refuses to vote.
• CSV Headline: "$1.75 billion in missed state payments" — This significantly understates the crisis. By late September, school districts alone had missed $3.76 billion, more than double the headline figure, with total impact across all entities exceeding $5 billion and growing monthly.
• News Coverage: Most headlines focus on "100 days" without explaining Pennsylvania is the ONLY state nationwide without a budget. All 49 other states passed budgets on time, making this an exceptional governance failure rather than normal delay. This critical context is routinely buried or omitted.
• Administration Statements: "Negotiations are continuing and dialogue is respectful and productive" — These optimistic official statements contradict reality: Pennsylvania stands alone nationally, the Senate has met only 32 times in 246 days, and private Capitol sources now predict no deal until December. These statements deflect criticism rather than reflect truth.
• Treasurer Coverage: Media presented Garrity's $500M loan program as helpful relief without adequately explaining it's politically selective (excludes school districts despite them being most affected), legally questionable (Treasurer may lack lending authority), and shifts interest costs to taxpayers unless separate legislation passes.

Partisan Deadlock: When Compromise Becomes Impossible

The budget impasse centers on a fundamental disagreement about Pennsylvania’s fiscal future. Gov. Josh Shapiro originally proposed a $51.5 billion budget in February—up from $48.3 billion the previous year—to account for rising Medicaid costs and continued aid for underfunded school districts.

State Senate Republicans, emboldened by an increasingly conservative membership, insist on flat funding at current levels: $47.6 billion. They argue any additional spending endangers Pennsylvania’s long-term fiscal health, despite the state having almost $11 billion in cash reserves (though these reserves have shrunk as spending has outpaced revenue in recent years).

House Democrats have compromised repeatedly, bringing their proposal down from $51.6 billion to $50.6 billion to $50.3 billion—the version they passed 105-98 on the 100th day of the impasse. Three Republicans joined all Democrats in support. But Senate Republicans won’t schedule a vote, with Senate Majority Leader Joe Pittman saying the chamber wouldn’t return “until there is a reasonable proposal to put in front of members of our caucus.” The Senate has met only 32 times in the 246 days since the budget was introduced.

Senate President Pro Tempore Kim Ward claimed Democrats want “their tax increase,” though neither Gov. Shapiro nor House Democrats have proposed broad tax hikes like sales or income increases. Both sides support limited new revenue from regulating recreational cannabis or slot-like skill games, but Senate Republicans face deep internal divisions on these proposals.

This isn’t Pennsylvania’s first budget crisis—it’s part of a troubling pattern. Twelve of the last 25 Pennsylvania budgets have been late. The previous major impasse in 2015 lasted nine months under then-Gov. Tom Wolf, and county officials say they still haven’t fully recovered from that financial disruption. Private Capitol sources told reporters they now expect no budget deal until December at the earliest.

Beyond Schools: The Cascading Crisis Across Pennsylvania

While education funding dominates headlines, the budget impasse affects far more than schools. Pennsylvania’s 67 counties are bracing for missed payments funding mental and behavioral health services, child protective services, intellectual disability supports, drug and alcohol treatment, and homeless assistance.

Armstrong County stopped reimbursements to families providing foster care, closed senior centers, and froze hiring. Westmoreland County announced employee furloughs and park closures. Counties face a stark choice: raise property taxes, cut critical services, or both. Small businesses like S&S Pools and Spas near Scranton, which provides brine tanks to PennDOT for winter road clearing, are owed tens of thousands of dollars.

College students face delayed financial aid through the PA State Grant Program, which typically provides more than 100,000 students an average of $2,000 per semester. Ariana Little, a senior education major at Drexel juggling a part-time job with teaching requirements, said the impasse has “rearranged my whole entire life this year.”

Even after a budget passes, it will take at least four weeks for state payments to begin flowing again—meaning the damage will extend well into November at the earliest. Pennsylvania School Boards Association CEO Nathan Mains captured the absurdity: “Imagine trying to plan your own personal budget without a complete picture of your income, or trying to pay all of your bills without as much as 70% of your income. That’s the position school districts find themselves in.”

For 1.7 million Pennsylvania students returning to schools this fall, the uncertainty continues. Districts are preparing for October service cuts, program eliminations, and hiring freezes. Mental health programs hang in the balance. Teachers wonder if their paychecks are secure. And every day the impasse continues, the borrowed millions grow more expensive and the path back to fiscal stability grows more difficult.

Pennsylvania’s budget crisis exposes a fundamental truth about public education funding: when political dysfunction becomes normalized, children pay the price. The fact that 12 of the last 25 budgets have been late reveals this isn’t an aberration—it’s a feature of a broken system. Districts shouldn’t need emergency loans to provide basic services the state is constitutionally obligated to fund. Students shouldn’t wonder if their mental health programs or special education supports will survive political brinksmanship. And taxpayers shouldn’t pay interest on borrowing caused by their own government’s failure to govern. Real educational leadership means ensuring every child has the resources they need to succeed, regardless of political ideology or fiscal philosophy. Want to learn how evidence-based approaches can transform student outcomes even during funding crises? Explore our All Access Program for proven strategies that work no matter what challenges your district faces.