As Philly residents and schools brace for SEPTA cuts and late state funds, there’s no rush for a budget in Harrisburg

HARRISBURG — Signs detailing forthcoming service cuts to SEPTA are posted at Regional Rail and bus stops across the region. Local schools are figuring out how to start the school year without payments from the state and the transit some students rely on for their commutes.

But on Wednesday morning in the Pennsylvania Capitol, where lawmakers continue to grapple behind closed doors over the state budget, three weeks behind their deadline, you could hear a pin drop — save for a few tourists’ shoes on the Moravian tile floor in the Capitol’s opulent, gold-accented main rotunda.

Across Philadelphia and the surrounding region, there is an urgency for Pennsylvania’s state lawmakers to fulfill their constitutional duty and deliver a balanced state budget, which was due June 30. But weeks later, there is still no deal in sight, with disagreements remaining on major issues, including mass transit funding, how to regulate and tax skill games, and more.

» READ MORE: Not just SEPTA: Public transit is in trouble all across Pennsylvania, including in GOP districts

SEPTA is just a month away from implementing major service cuts and fare increases, while schools and counties need to secure additional funding to stay afloat without their anticipated state allocation.

But around the Capitol hallways, there seemed to be little sign of haste. Top legislative leaders were not present to negotiate the budget in person on Wednesday, while Gov. Josh Shapiro hosted a news conference at a coffee shop in Mifflin County. The rosy picture of an imminent budget deal painted by top leaders last week has started to fade.

“I wish it didn’t take this long. I’m frustrated by how long it takes,” Shapiro said, remarking on Pennsylvania’s divided legislature, where Democrats hold a narrow majority in the state House and Republicans control the state Senate.

This stage of negotiations is supposed to be quiet, as closed-door talks continue between top leaders House Majority Leader Matt Bradford (D., Montgomery), Senate Majority Leader Joe Pittman (R., Indiana), and Shapiro.

Leaders don’t like to bring their members in unless they have bills to vote on, which will not be finalized until a handshake agreement among the negotiators is reached. But leaders have yet to schedule any additional session days before September, though both chambers remain ready to call back the General Assembly’s 253 total members as soon as there is a deal.

In an interview Wednesday, Pittman said that talks are “certainly taking more time than I would like,” but that the extra time is necessary to work through the few, but nuanced, issues at the table.

The leaders still have “a ways to go” on agreeing on a total spending number, negotiating with all four caucuses to reach a deal on skill games, and “working to figure out how to bring a degree of support” to mass transit and infrastructure in the state’s current fiscal situation, Pittman said.

“We’re moving along. I would prefer that we be moving along at a faster pace than what is occurring, but nevertheless, we are continuing to move forward,” Pittman added.

But don’t mistake the speed of talks as a lack of urgency, Pittman said.

“There’s a pace to this,” he said. “I really attribute it to the degree of large issues that are at the table. There are not as many issues as there usually are, but the issues that do exist are quite significant.”

Shapiro said during Wednesday’s news conference that he and top leaders remained “respectful” and “cordial” in negotiations.

“This is where we are, and we’re working through it. And I’m very hopeful that we’re going to find that common ground,” he added.

Pennsylvania is on track to spend $5.5 billion more than it brings in during the next fiscal year, if spending is set to $51.5 billion, as Shapiro proposed during his February budget address. And Shapiro’s supporters in Southeastern Pennsylvania expect the governor to deliver additional funding for SEPTA and prevent its “death spiral” ahead of a major year for tourism in Philadelphia in 2026.

In negotiating this year’s budget, Shapiro, who built his national brand as a moderate Democrat willing to work across the aisle with Republicans, faces one of his most significant challenges to date.

» READ MORE: Gov. Josh Shapiro says he ‘got stuff done’ in his first two years. With a budget shortfall on the horizon, his biggest challenges are to come.

And the clock is ticking. While lawmakers usually blow past the June 30 state budget deadline without issue and reach a budget deal in the weeks that follow, this year, residents might feel the impact of a late budget much sooner. Barring a state budget deal that includes additional funding for mass transit, SEPTA’s service cuts are set to go into effect Aug. 24 — just before the Philadelphia School District’s first day of school on Aug. 25.

The delayed budget is likely to be a problem for the state’s largest school district, which is alone in Pennsylvania as unable to raise its own revenue and is dependent on local and state government for the bulk of its funding.

School board president Reginald Streater said in a statement that the board was “closely monitoring” the budget situation, but that district leadership was “preparing multiple contingency plans for the board’s consideration to ensure we can continue providing students with the tools and resources they need to succeed.”

In a typical year, the board needs to borrow hundreds of millions to make ends meet over the summer — a necessity based on the timeline of state payments. The board had tentatively scheduled a July meeting to authorize such a borrowing, but canceled it; it seems likely that another meeting will need to be scheduled sooner rather than later, given the murky state budget picture.

The late budget comes at a crucial time for the district. It’s a contract summer: Pacts with the district’s principals union, school safety force, and, most consequentially, 14,000 teachers, secretaries, nurses, counselors, paraprofessionals, and other workers are all expiring in August.

The board in May adopted a $4.7 billion budget that counted on state funding at the levels Shapiro proposed earlier this year. It does not contain any new money for the Philadelphia Federation of Teachers contract or other deals. PFT leaders already have a strike authorization vote in their back pockets.

To avoid layoffs and classroom cuts, the district had to pull significantly from its savings; it is spending $300 million in reserves to balance the budget this year, and has little room to do so going forward. Leaders soon project a structural deficit, absent more funds from the city and state.

There is further uncertainty, too, with President Donald Trump’s administration promising less funding for federal grant programs that make up millions of the district’s bottom line.

Streater, however, expressed confidence in Harrisburg resolving a budget deal.

“We remain hopeful that, when the budget does pass, it will reflect a strong commitment to supporting all school districts across the commonwealth,” he said.

The looming SEPTA service cuts will affect Philadelphia School District students significantly, too.

Monique Braxton, a district spokesperson, said in a statement that officials “understand the anxiety and concerns surrounding students getting to and from school given the announced cuts announced by SEPTA. We’re urging parents to devise a plan.”

District and SEPTA officials are scheduled to speak next week to talk school-year logistics. Approximately 105,000 public school students are eligible for transportation, such as those who live 1½ miles from school within the city and up to 10 miles beyond its borders.

Of those 105,000, about 95,000 use it, Braxton said — including 52,000 who rely on SEPTA. Public transit is especially important in a city where charters are rife: Many students travel long distances within Philadelphia to get to school every day.

Families of transportation-eligible students can opt out of SEPTA or school busing and instead receive a $300-per-month stipend for driving their children to school themselves.

SEPTA cuts are not the only transportation conundrum the district faces. The school system also currently has 32 bus chauffeur and driver vacancies, Braxton said.

Staff writer Thomas Fitzgerald contributed to this article.