Philly’s collar counties are missing millions in state social service funding as budget stalemate continues

Philadelphia’s collar counties are missing tens of millions of dollars in funding for social services while the Pennsylvania General Assembly negotiates a budget.

Two months after the General Assembly blew past its budget deadline, critical funds have stopped flowing from the state to county governments, leaving the counties to cover the cost of a wide range of programs, including mental health services, children and youth programs, and meal programs for seniors. If the budget impasse continues much longer, they will be forced to consider possible cuts and dipping into reserve funds.

Since July 1, after the end of the state’s 2025 fiscal year, counties have stopped getting some funds they had previously received from the state on a rolling basis to cover services funded by the state but administered by county governments.

Chester County CEO David Byerman estimated the state had failed to deliver at least $4.1 million to the county. Delaware County Executive Barbara O’Malley told county council members at a meeting last month that the county was on the hook for $12.1 million monthly until state funds resumed. A spokesperson for Montgomery County said the county was owed roughly $10 million monthly.

Bucks County Commissioner Bob Harvie said the county’s Human Services Division was missing $15 million just from its first-quarter budget.

Once a budget is reached, county officials expect the state government to reimburse them for the dollars spent.

So far, Philly’s suburban counties have not cut services or had to pull heavily from budget reserves, officials say — many of the state funding sources operate on a reimbursement structure where counties spend funds out of their own budgets first. But that success is dependent on how quickly a deal is struck.

As of Friday, House Democrats and Senate Republicans, who control each chamber in Pennsylvania’s divided government, had yet to reach a final budget deal. Ahead of the holiday weekend, the top leaders in the House and Senate, as well as Democratic Gov. Josh Shapiro, seemed on track toward a deal in the coming days or weeks.

“While we have the reserves to address things like the budget impasse, we hope it won’t come to that,” said Montgomery County Commissioner Jamila Winder, a Democrat.

Winder said she was confident in Shapiro and the House leadership’s ability to reach a deal with Senate Republicans. The budget impasse comes as counties were already facing uncertainty about federal funding sources because of the Trump administration’s efforts to slash spending.

“The combination of the budget impasse at the state level, coupled with what’s coming out of Washington, does make it hard for county electeds to focus on ensuring that we have the resources to deliver on critical services,” she said.

Counties across Pennsylvania depend heavily on state and federal dollars — in Bucks County, the combination represents nearly 50% of the county’s budget.

In a letter to Shapiro and the General Assembly last month, the County Commissioners Association of Pennsylvania called on the state officials to get their work done. If they failed to do so, the letter warned, counties would be forced to cut services and raise property taxes, as they did 10 years ago during a nine-month budget impasse.

“We are not telling you how to do your job; we are simply asking you to do your job. Our residents cannot pay for the Commonwealth’s inaction,” the letter said.

Officials in the suburban counties are optimistic that they will be able to continue providing services until the state eventually refunds them. This was true for the collar counties in 2015; unlike smaller counties, the suburbs have greater flexibility in their budgets.

But the current situation is only sustainable for so long. In her comments to the council members, O’Malley said Delaware County eventually might have to consider curbing services if a budget is not reached.

And nonprofit organizations are already feeling the pain. Erin Lukoss, executive director of the Bucks County Opportunity Council, said the organization has already stopped receiving funds from the state for housing and food programs. Most critically, she said, the agency has not been able to contract with food pantries for a state program that allows them to purchase goods from local farmers.

“If this state budget goes much beyond three months, many of the nonprofits that have state funding will have to start pulling back … either offering less assistance or stopping programs altogether,” Lukoss said.