Lack of Pa. budget begins to inflict pain on residents
A word of praise is due for Slippery Rock University officials who agreed to spend $3.2 million of reserve funds to spare 2,100 state students from the ongoing budget stalemate.
Thousands of college students across Pennsylvania depend on financial aid from the state, but they won’t get their money on time this year because the Pennsylvania Higher Education Assistance Agency is powerless to disburse funds until the state budget is passed, according to the PHEAA website.
The Republican-controlled Legislature and Democratic Gov. Tom Wolf have yet to agree on a 2015-16 state budget, 71 days after the start of the fiscal year.
Without that funding, professors might not get a paycheck, food services contractors aren’t paid, construction and maintenance projects are delayed or scrapped. Rent to off-campus landlords goes unpaid.
Amanda Yale, SRU associate provost of financial services, says the university “is front-loading the money to students so there is no impact on students whatsoever.”
That’s crucial to students who need to focus on their studies rather without the additional burden of worrying about how they’ll pay their tuition and other expenses.
Those affected represent one-quarter of SRU’s 8,500 undergrad and graduate students.
It’s not a particularly risky fund transfer for SRU, which carries about $35 million in reserve funds. And the school stands to recover the money from Harrisburg once a budget is adopted.
However, frozen funding does impact the school. Reserve funds taken out of investment accounts represent thousands of dollars in potential lost interest earnings — and the longer Harrisburg haggles without a budget, the longer SRU goes without replacing those funds, and the more those displaced investments stand to lose.
Smaller human services agencies, which don’t have the luxury of a massive reserve fund or high cash flow, are not faring as well under the budget stand off. Joyce Ainsworth, Butler County director of human resources, reports about a half-dozen of the 100 agencies under contract with the county are struggling without state funding. The county has arranged loans for those agencies. But, Ainsworth added, the arrangement will work only “for a while.”
Meanwhile, the Legislature remains out of session — the state Senate reconvenes Monday and the House returns a week later, on Sept. 21. No sense of urgency there.
Republican leaders have continued meeting privately with Gov. Wolf, with no reports of significant progress.
Republican legislators are planning a temporary stopgap budget. That would get money to counties and school districts to continue supporting essential services.
“If there is no end in sight for the budget being done in the short term, then we will go to what options are available to send a stopgap budget to the governor to fund important services,” said Senate President Pro Tempore Joe Scarnati, R-Jefferson.
It is not clear whether Wolf would sign stopgap legislation.
The fiscal year is already 20 percent past. Pressure is growing for the Legislature and Wolf to finalize a budget.
The highest priority should be to summon the Legislature back to the Capitol — now, not in a week or two — and not leave until they get the budget done.
That might pose a slight inconvenience for elected leaders. But it’s no comparison to the inconvenience they’re imposing on 2,100 SRU students, their parents and professors, on human service agencies and the Butler County residents they serve, and on hundreds of thousands more across people across Pennsylvania.
