Pennsylvania Budget Stalemate Deepens as Democrats Reject GOP Transit Plan

A budget impasse in Pennsylvania intensified this week as Democrats rejected a Republican proposal aimed at funding public transit and government operations. On Tuesday evening, the Republican-controlled Pennsylvania Senate passed legislation that would redirect nearly $600 million from a crucial public transit fund to cover operational costs for transit agencies. Top Democratic officials argue this move undermines long-term transit funding by diverting resources from vital capital projects.

Manuel Bonder, spokesperson for Democratic Governor Josh Shapiro, expressed skepticism about the Republican plan, stating, “While Governor Shapiro appreciates Senate Republicans finally acknowledging the need to fund mass transit systems across the Commonwealth, this is clearly not a serious, long-term proposal that can pass both chambers.” He emphasized the necessity for continued negotiations to reach a viable agreement.

The proposed bill would allocate funds over two years to help transit agencies, including SEPTA, which serves over 700,000 daily riders in Philadelphia and its suburbs. Yet, this funding comes at a significant cost, as it draws from the Commonwealth’s Public Transportation Trust Fund, which is already designated for large-scale projects. Sharif Street, a Democratic senator from Philadelphia, criticized the proposal, calling it “a cut to mass transit masquerading as funding.”

In addition to the funding shifts, the bill would compel transit agencies to increase fares and expand the powers of a special prosecutor focused on SEPTA-related crimes, a measure supported by Republican lawmakers. Senator Joe Picozzi, the only Republican senator from Philadelphia, acknowledged the proposal as a temporary solution, urging his colleagues not to let perfection hinder progress. “We do not have time for a forever solution,” he stated, emphasizing the urgency of addressing the budget crisis.

The passage of the bill, which received a 27-22 vote, has not guaranteed its acceptance in the state House. House Majority Leader Matt Bradford voiced strong opposition, labeling the proposal “not a serious solution” and warning that it would not pass in the lower chamber. He criticized the practice of raiding the trust fund without a sustainable revenue plan, stating, “Redirecting capital funding without sufficient sustainable and recurring revenue will not avert this funding crisis.”

In conjunction with the transit bill, the Senate approved a spending plan to maintain government funding at current levels for the coming year. This budget is over six weeks overdue, raising concerns among schools and county-run social services that they may face financial difficulties if new funding is not authorized soon. The budget bill, which also passed with a 27-22 vote, aims to resume critical payments to schools, counties, and social service nonprofits. Senator Scott Martin highlighted the need to ensure money flows to essential services as the budget stalemate continues.

Despite these efforts, Senate Minority Leader Jay Costa remarked that the budget bill “is not going to happen.” He, along with other Democratic leaders, contended that the Republican-controlled Senate had not fulfilled its responsibility to adequately fund public services. In a joint statement, Democratic leaders asserted, “This budget does not fulfill our constitutional obligation to adequately and equitably fund our public schools and it fails to support critical programs and services such as mass transit.”

The ongoing deadlock stems from Republican insistence that any new transit funding must be accompanied by a dedicated revenue source. Initially, the taxation and regulation of skill games appeared to be a potential solution. However, complications arose when Pace-O-Matic, a company involved in skill games, accused GOP leaders of pressuring lobbyists to abandon their support for its interests. This conflict has further complicated negotiations.

In a counter-proposal, House Democrats passed a bill that would increase the state sales tax revenue allocated to public transit by 1.75 percentage points. This proposal included provisions for $600 million in bonds for road construction, with a significant portion designated for rural regions. It also aimed to introduce accountability measures for large transit agencies. Although the bill received bipartisan support, with some Republicans backing it, Senate Majority Leader Joe Pittman dismissed it as failing to deliver a pragmatic solution.

The implications of the budget impasse are already being felt across the state. SEPTA has announced plans to implement significant service cuts starting on August 24, 2023, unless additional funding is secured. This initial phase would involve a 20% reduction in services, including the elimination of 32 bus routes and a reduction in train frequency. Smaller transit agencies throughout the Commonwealth face similar dire financial situations.

Furthermore, the delayed budget has resulted in missed payments to various service providers, including schools and social services. State Budget Secretary Uri Monson recently warned that at least $2.5 billion in funding could be impacted over the next six weeks due to the ongoing stalemate.

In the Sharon City School District, Director Matt Vanoy reported that while the district is not currently in a crisis, the situation could worsen if the impasse continues. “You’re hurting kids and you’re impacting your instructional programs by delaying or cutting those purchases,” he explained, adding that the district is already considering cuts to essential resources.

As the Pennsylvania legislature grapples with these pressing issues, it remains uncertain how long the budget impasse will persist and what further measures will be taken to resolve this critical funding crisis.