Centre County’s budget process challenged by PA budget impasse, federal shutdown

As Centre County continues to work on its 2026 budget, a lack of a state budget combined with the federal shutdown has turned the process into a challenging one, the commissioners said Tuesday.

The state budget was supposed to be approved on June 30, but has now been delayed by more than 100 days following ongoing funding allocation disputes between the Democrat-controlled Pennsylvania House of Representatives and the Republican-controlled state Senate.

While the House approved a $50.3 billion budget proposal earlier this month, Spotlight PA reported that it likely wouldn’t pass the Senate, leading to further delays. Additionally, a Senate vote on the proposal has not been scheduled.

Meanwhile, on a national scale, the federal government shutdown is still in place, and a bill to reopen it was shot down Saturday by the U.S. Senate, leading to further budget delays.

Commissioner Steve Dershem said that at recent budget work sessions, the commissioners have been arranging their budget based on flat funding, or the concept that they would receive the same levels of funding as last year, but that strategy comes with some drawbacks.

“[Flat funding] limits us and our abilities to initiate new programs, or to think about expanding programs, so we’re living pretty lean right now in that budget,” Dershem said. “I would say that there probably won’t be a lot of other expansions at this point, or at least in the foreseeable future.”

Between the federal government shutdown and the state budget impasse, the delayed state budget has affected counties most as they plan their 2026 budgets. Typically after the state budget is approved, crucial funding is then distributed to counties for the services they run.

While the commissioners believe they have enough money in their reserve funds to approve a budget by the Dec. 31 deadline without any cuts in services, other counties haven’t been so lucky.

“We have heard now that there are several other counties that are starting to [see their reserve funds] crack, and are either no longer paying their bills or are announcing to their many suppliers — especially human services organizations — that within a couple of weeks they’ll run out of funding,” Commissioner Mark Higgins said at Tuesday’s meeting.

Examples of struggles in other counties include Westmoreland County recently furloughing 125 county employees to make their budget work, Armstrong County also furloughing employees and cutting funds to human services departments and Chester County only paying 75% of the costs for some human services organizations.

Higgins also said that county governments appear to be the highest fully functioning level of government at the moment — at least in Pennsylvania.

The commissioners’ statements about the county budget echoed what they said at their State of the County event last month — that no major cuts would need to be made before Jan. 1 thanks to years of careful money management, praising the diligence of finance director Richard Killian.

Making it to Jan. 1 without cuts would be significant, the commissioners said at the State of the County, because on that date the county can take out a tax and revenue anticipation note for an advance on the county’s property tax, then pay it back in May when the property taxes hit.

Despite the challenging budget process, Dershem told the CDT that the county is on track to not have to raise property taxes — a feat that the commissioners have pulled off for 15 straight years.

More updates on the county’s 2026 budget will be shared at future commissioners meetings, which take place at 10 a.m. every Tuesday at the Willowbank Building.