COMMONWEALTH OF PENNSYLVANIA
OFFICE OF THE BUDGET
BUDGET IMPASSE QUESTIONS AND
Fiscal Year Ending JUNE 30, 2017
Question 1 – What is
a budget impasse?
Answer: By June
30 of each year, the Commonwealth must approve a budget that sets funding
levels for the following fiscal year (FY), which begins on July 1. If a budget
has not been approved, the Commonwealth is prohibited from making many payments.
This period, known as a budget impasse, continues until a budget is approved.
Question 2 – Will a
budget impasse create any risks to the general public?
Answer: No. The
Commonwealth will continue operations for all critical functions that impact
the health, safety and/or welfare of the citizens of Pennsylvania.
Question 3 – Will a
budget impasse affect public access to any Commonwealth operated
Answer: No. The
Commonwealth will continue operations for Commonwealth-operated facilities,
such as county assistance offices, prisons, youth development facilities and
Question 4 – What
Commonwealth operations will be impacted by a budget impasse?
Answer: Many Commonwealth expenditures cannot be made
without an approved budget and will be delayed until that occurs.
Question 5: What type of payments can be made in a budget
Answer: The Commonwealth
will continue to make payments and continue operations in all areas that affect
the health, safety, and protection of Pennsylvanians or as required under
Federal Law, state court decisions or the Pennsylvania Constitution, including:
benefit programs administered by the state, including cash assistance,
support for Women, Infants and Children (WIC);
care services paid for through Medical Assistance, for hospitals, other
healthcare providers and nursing homes;
care subsidy payments;
and community based services, including attendant care, for seniors and
people with disabilities;
drug coverage under the PACE program;
programs for Blind and Paralyzed Veterans;
Part A and B premium payments;
intervention, autism and intellectual disability services;
Workers’ Insurance Fund payments; and
Question 6: What payments
cannot be made during a budget impasse?
Answer: Most payments to vendors or to grantees for programs or
expenditures incurred during FY 2017-18 that are authorized through the budget
will be delayed until a budget is approved.
Question 7: How will
the budget impasse affect education funding?
Answer: To the
extent these funds must be appropriated by the General Assembly, payments will
not be processed until a budget is approved for FY 2017-18.
Question 8: How will
the budget impasse affect highway construction projects?
Construction can proceed for all work and payments funded from prior year
appropriations. Examples of programs with available prior year funding
include: Maintenance, Construction,
Welcome Centers, Re-investment in Facilities, Aviation Operations, and Safety
Administration. Vendor payments for goods or services incurred in FY 2017-18 will
not be made until a budget is approved.
Question 9: Will Commonwealth
agencies process invoices from vendors?
Answer: Yes. Vendors with state contracts who continue to provide
goods and services to commonwealth agencies can submit invoices and
Commonwealth agencies will process all invoices received. All invoices held
during the budget impasse will be sent promptly to the State Treasury for
processing after the FY17-18 budget is enacted.
Question 10: How will the budget impasse affect existing
Answer: Most state contracts include
language addressing this situation, which states that the commonwealth’s
obligation to make payments shall be subject to the availability and
appropriation of funds and that contractors may not stop work or refuse to make
delivery because of non-payment. If the Commonwealth’s untimely payment results
in a default situation, the contractor may pursue the remedies set forth in the
Question 11: Can Commonwealth
agencies enter into new contracts for 2017-18?
Answer: Agencies may enter into new contracts for
FY 2017-18. The contracts will clearly state that payment is subject to
Will Commonwealth revenues continue to be collected and deposited during
a budget impasse?