Budget Deadline is June 30 — Here’s Where Things Stand

The bottom line:  The June 30 state budget deadline is eight days away. As of this week, no deal has been reached. Governor Shapiro signed nine initial appropriations bills on June 12 covering specific agencies — ensuring operations at the State Police, Gaming Control Board, PUC, and others regardless of the broader outcome — but the full general appropriations budget covering human services, education, and the programs nonprofits depend on remains unresolved. 

The core fiscal challenge:  Shapiro’s $53.3 billion budget proposal requires a record $4.7 billion draw from the state’s Budget Stabilization Reserve (Rainy Day) Fund — the largest single draw in the fund’s history, requiring a two-thirds vote in both chambers. A similar $1.7 billion request was denied by the General Assembly last year. Senate and House Republicans oppose the transfer, arguing it risks the state’s credit rating and sets a problematic precedent. The fund, built largely through pandemic-era federal deposits, would drop to $2.9 billion under Shapiro’s plan. 

The skill games complication:  The Pennsylvania Supreme Court ruled this week that skill games are slot machines subject to gambling law, starting a 120-day clock for lawmakers to enact a regulatory framework before enforcement begins in October. This ruling both clarifies and complicates the budget picture. The ruling confirms the machines can be taxed — but lawmakers remain far apart on rate and structure. Shapiro proposes a 52% tax projected to generate up to $765.9 million annually; Senate GOP leadership prefers 36%; Sen. Gene Yaw has proposed 16%; Rep. Danilo Burgos (D-Philadelphia) backs a flat per-machine fee projected at roughly $300 million annually. The skill games lobby has also frayed its relationship with Senate Republicans after funding primary challenges against three GOP senators. No revenue from skill games can be counted until a regulatory framework is enacted. 

Other unresolved revenue:  Shapiro’s budget also depends on projected revenue from recreational marijuana legalization — which stalled in the Senate Law and Justice Committee on a 3-7 vote — and entitlement spending reductions tied to a minimum wage increase. The Independent Fiscal Office projects these revenue assumptions are overestimated by $4.4 billion over three years, and that without new revenue, the state’s structural deficit could reach $8.3 billion within three years. 

What an impasse would mean for nonprofits:  Last year’s 135-day impasse forced nonprofits statewide to take out emergency loans to maintain operations.  In a survey that included only 228 nonprofit participants, 244,000 Pennsylvanians lost or experienced reduced services, laid off or furloughed 1,865 staff, and cost organizations collectively $2.2 million in interest charges. These results are only a snapshot of the effects experienced by hundreds additional organizations impacted. This year’s conditions are harder: federal Medicaid work requirements are set to take effect January 1, 2027, federal SNAP administrative cost-sharing shifts to the state October 1, and many rate-based human service providers are entering this impasse window already flat-funded for six of the last ten budget cycles. PANO is actively tracking impasse protection legislation — HB 1609 and HB 2382 — and will share updates as the deadline approaches. 

What to do right now:  Contact your state House member and state senator this week. Tell them you need an on-time budget and ask what they are doing to get there. If your organization carries state contracts or grants, share what a 30-, 60-, or 90-day funding gap would mean operationally.