Pa. Treasurer Stacy Garrity expands loan program for services impacted by state budget impasse

by Ian Karbal, Pennsylvania Capital-Star
October 3, 2025

Pennsylvania’s 2025-2026 budget is three months overdue, which has meant county governments and the service providers they contract with have had to make due without state funding.

The state spending plan was supposed to be passed by June 30.

Last month, state Treasurer Stacy Garrity, who is also running for governor in the Republican primary, announced a program which would provide $500 million in low-interest loans to county governments and head start providers affected by the impasse. Now, she’s extending that initiative to organizations that contract with county governments to provide services for rape survivors and pre-k children, as well as domestic violence prevention support.

“The response to Treasury’s short-term funding solution has been positive, and I’m pleased to be able to expand this program to include organizations that provide critical services to more children and also to survivors of rape and assault,” Garrity said in a statement. “I’m using the tools available as state treasurer to make sure critical services can continue without interruption. These loans are a lifeline.”

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Not all potential recipients may be able to take advantage, however.

The Pennsylvania Coalition Against Domestic Violence said in a statement that while it “is grateful for a loan during the budget impasse, a 4.5% interest rate would significantly hurt [domestic violence] programs.”

They said that the $5.8 million loan the organization is eligible to receive would result in around $260,000 in interest that it would be required to pay.

“If the Commonwealth cannot agree on a budget, we call on legislators to support Treasurer Garrity’s Budget Bridge Loan by waiving interest fees to support essential domestic violence and sexual assault services. Essential service providers cannot continue without essential funds,” the statement said.

County governments and school districts have been calling on legislators in the state house to act quickly on the budget. Counties are responsible for providing many mandatory services which are paid for with state money. Those services are, in some cases, required by law to be continued even as state funding is held up by ongoing negotiations between Gov. Josh Shapiro and lawmakers.

Counties have, at times, taken out loans, dipped into savings, or cut social safety net services. They would be responsible to cover interest accrued on any loans. While most school districts have yet to see serious impacts, advocates have warned that may change this month if no budget is passed. 

Rosie Lapowsky, a spokesperson for Gov. Josh Shapiro, implied Republicans, who hold a majority in the state Senate, were holding up the budget to politically support Garrity.

“The way to fund our critical services in Pennsylvania is for Senate Republicans to stop playing politics by purposefully prolonging the budget process and come back to work, find agreement with the House, and send a budget to the Governor’s desk,” Lapowsky said in a text message. “The Governor introduced his budget plan 241 days ago, and Senate Republicans have been in session just 29 days since then – it’s past time for them to do their jobs and send a budget to the Governor’s desk for signature.”

Senate Majority Leader Joe Pittman (R-Indiana) responded to the allegation through a spokesperson.

“The billions of dollars of increased spending wanted by Democrats is unrealistic and would be detrimental to the long-term fiscal stability of our commonwealth,” he said in the statement. “Senate Republicans continue to be focused on effectuating a final spending plan that respects taxpayers, while allowing Pennsylvania to grow.”

 

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