HARRISBURG — Pennsylvania’s counties, school districts, and social service agencies are warning of mounting layoffs, borrowing costs, and damage to the state’s safety net as the politically divided state government enters its fourth month of a budget stalemate.
The stalemate, entangling Democratic Gov. Josh Shapiro, the Democratic-controlled House, and the Republican-controlled Senate, has stalled billions of dollars from going to schools and social services. With no certain end in sight and the federal government careening toward a shutdown, the crisis deepens.
### Political Divide and Campaign Implications
The finger-pointing in Pennsylvania’s statehouse has fallen along partisan lines. The budget impasse has become a prominent campaign topic, especially as Republican state Treasurer Stacy Garrity prepares to challenge Shapiro’s bid for a second term in the 2026 election.
### Budget Standoff’s Broad Impact
Although the fight in the statehouse over issues like public school funding and curbing Medicaid costs involves only a fraction of the roughly $50 billion budget, its effects are being felt widely.
For example, the grant-funded Jefferson-Clarion Head Start program has laid off more than 50 staff members. Additionally, over 300 families who had slots in state-funded pre-kindergarten programs have had to seek alternative arrangements, quit jobs, or make adjustments to work from home.
Taylor Miller, a parent impacted by the cuts, shared her experience: she is relying on babysitting help from her children’s grandparents, who live half an hour away, while she completes coursework to become a phlebotomy assistant. Her 3-year-old lost a six-hour daily preschool class, and her 18-month-old lost weekly home-visit sessions with a teacher.
“This is the one thing that most children have, and they make friends, they socialize, they love to read and to learn and it’s just a great environment for the kids — and to have that taken away, only two weeks into the school year, it affects them, it hurts them,” Miller said.
Pam Johnson, executive director of Jefferson-Clarion Head Start, noted that the nonprofit is on track to max out a $750,000 line of credit and has no guarantees that families and laid-off employees will return once state aid resumes.
### Mounting Financial Strain
As October begins, county officials and human services providers warn that the damage is accelerating. Lines of credit and reserves are running out, meaning deeper layoffs and additional service shutdowns are inevitable.
“Things are going to get exponentially worse in October,” said Kristen Rotz of the United Way of Pennsylvania, which surveyed over 100 social service agencies. “The impacts of this impasse are going to become much more real.”
Meanwhile, organizations tapping into reserves to plug budget holes are missing out on investment income, further straining their finances.
### Legal and Operational Constraints
Without Gov. Shapiro’s signature on a new spending plan, Pennsylvania state government lost some spending authority starting July 1. Moreover, there is no legal mechanism to funnel aid to schools, counties, or social services without an agreement.
The state remains legally bound to make debt payments, cover Medicaid costs for millions, issue unemployment compensation, keep prisons open, and ensure state police patrols. All state employees under the governor’s jurisdiction are typically expected to report to work and be paid as scheduled, so state offices remain open.
However, schools have missed out on an estimated $3.8 billion so far. Philadelphia’s school board, the state’s largest district, authorized borrowing up to $1.5 million—three times the normal borrowing amount for this time of year. Universities, libraries, and county health departments have also missed payments, according to the Shapiro administration.
Several counties are taking harsh measures: Armstrong County has shut down senior centers and furloughed staff; Westmoreland County issued furlough notices to 125 employees; and Lancaster and Chester counties warned they will stop fronting entire reimbursements to social service providers.
### Smaller Social Service Agencies Feel the Pinch
Smaller social service agencies are also severely impacted. Safe Berks, a domestic violence and sexual assault prevention program serving Berks County, laid off several staff members, accrued debt, and is delaying payments and hiring freezes, according to its CEO.
County commissioners report growing waiting times for social services. Laid-off caseworkers, counselors, and social workers are unlikely to return quickly.
“How long does it take to train one of those workers, one of the social workers, the case workers, to get back out in the field?” asked Dave Glass, a Clearfield County commissioner. “You could be losing a year or more.”
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