Lawmakers are cautiously optimistic about reaching a deal on the state budget without an impasse as long as last year’s, but meeting their June 30 deadline is unlikely, according to at least one representative from Butler County.

Gov. Josh Shapiro’s 2026-27 budget plan, which proposes $53.3 billion in spending — a 5.4% increase over the current fiscal year’s budget of $50.09 million — has been criticized by Republicans in the House and Senate, who express concerns about the level of spending.

To help offset the increase in spending, the governor’s proposal calls for more than $4 billion to be pulled from the state’s rainy day fund and the implementation of taxes on recreational marijuana and skill games. Tax measures for recreational marijuana and skill games failed to materialize in last year’s budget talks.

Such a proposal is not too likely to be approved by the impending deadline — mere days away, said Rep. Tim Bonner, R-17th, in a recent interview.

“The governor estimates that under his proposal, he can generate about $1.5 to $2 billion if he can tax it,” Bonner said on the potential to tax skill games, even with the proposed 52% rate. “However, even if he would get that level, which I don't believe he will, it would take some time to get the tax program up and running to obtain that type of revenue within this fiscal year.”

Similarly, Bonner is skeptical that even if recreational marijuana use becomes legalized, the state would be able to make sufficient revenue by taxing it.

“He thinks we'll generate about $500 million from that,” Bonner said. “I don’t think that will occur this fiscal year, and I don’t think that they can return that type of tax money to our coffers, certainly not within the first year.”

Further, the representative expressed concerns about taking from the rainy day fund. It’s not just short-sighted, it could technically be illegal, Bonner said.

According to Pennsylvania statutes, the state can only withdraw from the fund “when emergencies involving the health, safety or welfare of the residents of this Commonwealth or downturns in the economy resulting in significant unanticipated revenue shortfalls cannot be dealt with through the normal budget process.”

“I have serious concerns with taking money from the rainy day fund to balance the budget,” Bonner said. “That fund is reserved under law for emergency conditions, for natural disasters and pandemics. Here, none of those criteria are present. We just want to take the money out of the fund for general expenditures, which violates that law.”

This year’s budget was proposed with a 5% increase in spending back in February. Then, the Democratic-controlled House passed a general appropriations bill in April mirroring Shapiro’s proposal without support from Bonner or Reps. Marci Mustello, R-11th, and Aaron Bernstine, R-8th.

It stalled in the Republican-controlled senate.

There, Sens. Scott Hutchinson, R-21st, and Elder Vogel, R-47th, who have both seen their share of budget negotiations, are optimistic the wait for a compromise won’t be as long as in the past.

“It seems from my vantage point as a rank-and-file legislator that state budget negotiations are progressing more expeditiously than last year, with earlier and more frequent engagement, and back-and-forth discussions between the governor, House and Senate leaders,” Hutchinson said.

Over the past two decades, Pennsylvania’s public agencies have become all too used to the idea of waiting weeks — if not months — for vital funding to arrive. Budget impasses have become an annual tradition, having now occurred in four consecutive years. The longest impasse occurred in 2023, when a new budget wasn’t approved until December. The state also endured seven consecutive budget standoffs between 2003 and 2009, as well as 2014, 2015, and 2017.

Last year, lawmakers failed to approve a state budget until Nov. 12 — 145 days after the June 30 deadline.

“I do not expect things to play out as they did last year. Conversations and progress continue,” said Vogel. “I cannot confirm if we will meet the June 30 deadline, but it will be close.”

Between now and then, there are differences to be resolved, including the overall level of spending, the proposed use of rainy day funds to cover potential shortfalls and the monetization of “skill games,” the senators said.

“The budget proposal is the same old song and dance: it spends too much, it counts on revenues that have not been approved in prior budgets, and it steers the state ever closer to a massive tax increase,” Vogel said. “Enacting the budget amounts to a 5.4% spending increase that would take more money away from Pennsylvania families in future years at a time when many are still struggling with affordability issues.”

“Although there is an evident willingness to come to a speedier conclusion, there remains a major difference of opinion in the amount of money that the various parties wish to spend,” Hutchinson said.

Mustello said she would like to see a budget proposal from the senate brought before the House “as soon as possible.”

“I was disappointed by the delays and political games surrounding last year’s budget,” she said. “The process dragged on far longer than it should have and created uncertainty for communities and organizations that rely on state funding.

“In the end, the final budget was not significantly different from what could have been completed on time. Pennsylvanians expect us to do our jobs and make the tough decisions needed to keep government operating.”

She expressed concern about the rainy day fund, which was slowly built up to $7.04 billion since the start of the COVID-19 pandemic, largely through the accumulation of federal relief funds. If necessary, this would be enough to sustain government operations for 57 days, according to the Pennsylvania Treasury Department.

“I want to avoid using money from the state's Rainy Day Fund to cover ongoing budget shortfalls, because that only creates bigger problems down the road and could lead to future tax increases,” said Mustello.

If the rainy day fund is spent, it causes a future impact, Vogel said.

“Spending down on the rainy day fund puts the commonwealth on a dangerous financial path forward that all but guarantees tax increases,” Vogel said.