Without a state budget, Pa.’s wealthiest counties making cuts, spending reserves
Delaware County Council chair Mario Civera (right) addresses the group at a State of the Counties meeting held by the Mainline Chamber of Commerce. Chair of the Chester County Board of Commissioners Terence Farrell (left) and Montgomery County Commissioner Val Arkoosh (center) said their counties have spent tens of millions of dollars to fulfill financial obligations since the budget impasse started in July. (Laura Benshoff/WHYY)
Even if you’re really good at budgeting, if your boss were four months late with your check you might have trouble paying your bills.
With no state budget nearly four months into the new fiscal year, even the wealthiest counties in Pennsylvania are making cuts or draining their rainy day funds to pay their bills.
While the effects are not as dramatic as taking out a $275 million loan to fund the state’s largest school district, or contemplating cuts to Meals on Wheels, the budget impasse means social service vendors in Chester and Montgomery Counties are skating by with less.
Terence Farrell, chair of the Chester County Commissioners, said his county has spent down about $27 million of its $56 million reserve fund. It’s also been underpaying vendors.
For now, if a vendor that Chester contracts with for say, case management, social services, invoices for a $100 they receive $80.
Farrell said the Department of Human Services is recommending they reduce payments even further.
“The recommendation for November is that we actually reduce the payment rate to about 60 percent,” he said. When a budget is passed, the state will back pay counties for its contributions, but without knowledge of the final budget counties can’t anticipate if certain line items will be reduced. It’s therefore a risk, said Farrell, for counties to pay out what might not be reimbursed.
While Chester County is “lucky,” Farrell said as in the rest of the commonwealth the people with the least — those dependent on a social safety net — are feeling the budget impasse the most.
In neighboring Montgomery County, vice chair of the Board of Commissioners Val Arkoosh said the county will have spent about three-quarters of its rainy day fund.
“We project that by the end of October, we will have spent $32 million” of an around $40 million reserve fund. Spending all of it could damage the county’s bond rating and is not an option, according to Arkoosh.
She would not say what the county had planned to control spending going forward.
Chester and Montgomery are the first and second wealthiest counties in Pennsylvania, respectively.
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