HARRISBURG, Pa. (AP) — Pennsylvania counties are bracing themselves for going without payments for some of the social services they provide as the state budget impasse between Gov. Josh Shapiro and lawmakers drags into its fourth week.
Tens of millions of dollars for county-level services for substance abuse, child welfare, mental health and intellectual disabilities are expected to freeze in the coming days and weeks, barring some sort of breakthrough in Harrisburg to break the impasse. Big payments to schools are also expected to be stalled in the coming weeks.
Berks County Commissioner Christian Leinbach said a standoff that lasts a few weeks won’t have much of an effect. But the Legislature isn’t scheduled to be back in session until after Labor Day, and if there isn’t a budget deal before then, he said, “that’s going to create some problems.”
“No county can go very long without having a serious impact, from a financial standpoint,” Leinbach said.
Counties have experience fighting gridlock, including a record impasse in 2015 that didn’t thaw until 2016.
During it, county governments and school boards expecting billions in state aid burned through loans and drained reserves. Social service organizations, largely nonprofits that provide state-mandated safety net services run by counties, closed programs, borrowed money and laid off hundreds of workers who serve the state’s most vulnerable populations.
County officials say the test taught them to draw down reserves to survive for a couple of months, at least, as many now try to figure out how much state aid will catch this impasse as they take stock of their cash flow.
No county may have an imminent need for a loan, but probably every county budget officer knows that the cost of borrowing will be much more severe than it was in 2015, now that interest rates are higher.
The Shapiro administration has yet to say exactly how much money it will withhold from counties and other social services.
That prompted umbrella nonprofits including the United Way of Pennsylvania, the Arc of Pennsylvania and the Association of Rehabilitation and Community Providers this week to call for clarity from the administration to avoid “unnecessary contingency planning” and pushed Shapiro to make “broad use of spending authority.”
In the short term, counties could see larger amounts of state aid withheld for county-level social workers who investigate child abuse complaints, such as calls to the state’s ChildLine hotline.
“We’re going to find a way to make it work as usual,” said Snyder County Commissioner Joe Kantz. “But obviously there is a tipping point… We can hold out for a few months, but beyond that it becomes very difficult.”
Delaware County Council President Monica Taylor said county agencies are sorting through their programs to determine what kind of shortfall to expect and how to use their cash flow to stretch services for as long as they can.
Philadelphia Mayor Jim Kenney’s office said the city has a relatively large cash balance that would help it avoid problems, if the impasse is resolved in the coming months.
Rich Fitzgerald, Allegheny County Executive, said the county broke through the impasse with its large fund balance in 2015, and has been thinking about it ever since, working to build up county reserves ahead of another extended state budget block.
The county’s fund balance of about $53 million will cover the costs for several months, he said.
“We always want to have that rainy day fund because we’re prepared,” Fitzgerald said. “I guess you could say ‘it’s raining right now’ and we need the rainy day background.”
Berks County worked out a contract clause with the vendors that said it was not obligated to pay until the state budget was completed.
The county will be on steady footing through the summer, Leinbach said. But as September approaches, officials will have to spread a dwindling pool of cash among vendors and decide which ones provide critical services and which ones don’t, Leinbach said.
In 2015, some services were “stretched to breaking point,” Leinbach said.
“When you’re working with families and kids in crisis, you can’t exactly say, ‘You know what, the money’s not flowing, we can’t go out and intervene,'” she said. “We’ll make it.”
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