Entrance to the Pennsylvania Capitol in Harrisburg, October 14, 2025. (Photo by Jessica Kourkounis for the Pennsylvania Capital-Star)
More than four months after state lawmakers set a deadline to pass the 2025-2026 budget, a deal may be reached at the Capitol in Harrisburg.
After hours of meetings between the House Democratic and Senate Republican caucuses on Tuesday evening, reports emerged from multiple sources of a tentative agreement on a $50.1 billion budget, with some details still to be worked out.
The final price tag is about $1.4 billion below what Gov. Josh Shapiro asked for in his February budget speech and just shy of the $50.3 billion proposal that House Democrats passed last month in an attempt to move closer to Republican demands.
Republicans have been adamant that they want a budget that doesn’t eat up the state’s $7 billion rainy day fund, while Democrats have pushed for more spending, primarily on education.
The Republican-controlled Senate also convened overdue Tuesday night to introduce several code bills regulating spending related to education, human services and capital projects. There was no discussion about the content.
Get our top stories delivered straight to your inbox every morning. Sign up now for the Pennsylvania Capital-Star Morning Guide.
Both the House and Senate are scheduled to convene Wednesday morning.
The move on the budget comes after a long impasse that, at least for now, appears to have been broken in recent discussions between Gov. Josh Shapiro and top legislative leaders – Senate Majority Leader Joe Pittman (R-Indiana), Senate President Pro Tempore Kim Ward (R-Westmoreland), House Majority Leader Matt Bradford (D-Montgomery) and House Speaker Joanna McClinton (Philadelphia).
Even the hint that the budget impasse might finally be resolved was good news for Pennsylvania’s counties, school districts and social service providers.
Many enterprises that rely on state financing had to resort to savings or cut expenses to overcome the impasse.
For some organizations that contract to provide state-funded social service programs, that means accepting low-interest loans from state Treasurer Stacy Garrity’s office. It was part of an effort by her office to support social service providers, such as rape crisis centers and domestic violence support programs, continue to function amid the impasse.
However, for some service providers, the 4.5% loan interest rate was too high. However, the Senate passed a bill that would allow the Treasury to write off interest on loans, although the House has not yet acted on the matter.
