Late Pa. budget prompts low-interest loan program

A Pennsylvania nonprofit is setting up low-interest loans for social services agencies that have seen the late state budget freeze their funding.

The Berks County Community Foundation is taking applications from regional nonprofits that have no other way to stretch their finances as they go without their monthly state payments.

Spokesman Jason Brudereck said agencies that have asked about the effort are already feeling the effects of the budget impasse.

“They are talking with their employees about cutting their hours, salaries, layoffs,” said Brudereck. “Some of them are in pretty bad shape.”

Individual loans will be capped at $200,000 and restricted to those organizations that serve residents of Berks County. The foundation is prepared to lend up to $2 million beginning in mid-September.

“Of course,” said Brudereck, “there’s always the possibility that if this budget impasse lasts a long time, this $2 million isn’t going to make much of a difference to some of these groups if they’re having a difficult time through the fall.”

The budget stalemate is entering its seventh week. Without a spending plan, the commonwealth doesn’t have authority to pay certain vendors and contractors, including many groups that help make up the social safety net.

Gov. Tom Wolf said Wednesday that he hopes the final state spending plan reimburses school districts and small non-profits for the borrowing costs they’ve racked up due to the budget impasse.