Pennsylvania state funds are governed by it’s fiscal year (which is July 1 to June 30 of the next year). In order to spend money in the 2024/25 fiscal year, you need to have a 2024/25 budget.

In past years, if lawmakers did not pass the budget by June 30th; starting July 1st…

"Basically state government would shut down. You have state employee furloughs— they would not get paid. Agencies would shut down. Programs are shut down,” described Rep. Seth Grove, Minority Chair of Appropriations.

Because of these next day impacts— lawmakers had more pressure to wrap up a budget on time. If they didn’t, state parks would close, PennDOT would stop fixing roads, and no one would pick up the phone if you called a state agency.

However, in the 2000s, there were multiple years where lawmakers kept missing the deadline (7 years, from 2004 to 2010). 

Thus, the state got sued.

Now, most state employees still get paid as long as they show up to work, which ensures federal funds are distributed and programs stay operational.

That said- most state spending does still halt.

"School districts aren't going to get money, right? Counties aren't going to get money outside of their federal entitlement stuff,” said Grove.

Similarly, non profits won’t receive any state grant money. These organizations have less immediate dependency on state funds, so a late budget does not have next day impact. However, if the impasse lasts over a month; there is a high chance that… 

“They're going to have to go get cash from banks, borrow money for floater loans and stuff like that,” said Grove. “And then they will bring that up during reimbursements because, it costs money to borrow money."

The Crime Victim Center of Erie relies on state funds from the Department of Human Services. Executive Director Paul Lukach shared how 1-2 weeks of no state funding is not a big disruption. But if the gap lasts for 3-5 weeks, or longer, then the whole process of distributing funds has come to a halt. And it takes more time and effort to get the process going again, compared to if the funding stayed consistent from the start.

“A budget stoppage is incredibly detrimental. Without funding, a non profit may have to limit services, thus damaging their reputation,” said Lukach.

Pennsylvanians who rely on a non profit that cannot bridge a gap in state funding with loans and other sources of money may be impacted by a significantly late budget. But with a day, or even a few weeks past the deadline...

“If you are a citizen of this commonwealth, you're probably not going to experience too much change.”

Both the House and Senate are in session this week, with the Senate scheduled through the weekend (except July 4). Lobbyists say negotiation talks over the weekend were productive, but we have yet to see any confirmed budget deal.