Commissioners OK loan to pay for human services amid state budget impasse

The county will ask for $14.1 million from the state treasury.

By RICH CHOLODOFSKY
TribLive

Westmoreland commissioners on Tuesday authorized the county’s finance department to apply for a $14.1 million state treasury loan to fund essential human services amid Pennsylvania’s ongoing budget stalemate.

The commissioners said an infusion of cash is needed as county resources used to pay key service providers to provide needed care for children with special needs, adults and seniors are running dry.

The amount of the proposed loan mirrors funding the county expected to receive from the state to pay for human services programs over the past three months.

Taxpayers will be on the hook to pay interest on the loan, which could be as high as 4.5%, commissioners said.

“The state has forced us to make a series of bad choices,” said Commissioner Ted Kopas. “It’s like organized crime. Money rightfully intended for county taxpayers will now have to be used to pay interest. I don’t know if anyone in the state is paying attention to any of this.”

The county’s $452 million budget relies on about $104 million in state funding, most of which is earmarked for human services programs. The county has received no funding from the state since the end of June.

Commissioners last month enacted a series of cost-saving measures that include a hiring freeze, a halt on purchases and restrictions on overtime. Furloughs for 125 county employees from a total workforce of more than 1,750 took effect last week.

Funds from other county programs and money earmarked for general operations were shifted to pay vendors who provide human services programs, finance director Meghan McCandless said.

That money is slowly drying up, and none of the county’s 168 agencies hired to provide services to about 25,000 residents has so far been denied payment, said Rob Hamilton, the county’s director of human services. Without an infusion of cash, that situation could change in the coming weeks, he suggested.

“We’re trying to pay vendors as much as we can. At this point we’re prioritizing payments for the most critical services for the most atrisk,” Hamilton said.

As a result of the budget impasse, the county halted its outreach services, which could have an impact in the future, officials said.

“We know this will hurt us long-term. The long-term impact is unseen right now, but there will be an impact,” Hamilton said.

McCandless said the county’s loan application is expected to be considered this week, with the funds potentially arriving soon after.

Commissioners said the state loan will not immediately lead to a return of furloughed staff and can be used only to cover costs for human services programs.

The county continues to explore borrowing money from private banks to offset lost revenue related to the budget impasse, including funds that have been used to pay for other programs for the remainder of this year and into 2026. Commissioners are expected to present a preliminary 2026 budget in November.

That budget could be stressed because of unexpected interest payments on borrowed money, said Commissioner Sean Kertes, who suggested the county could reject the state loan if lawmakers reach a budget deal within the next week.

A bank loan could still be pursued to ensure enough cash is on hand to fund operations during the early part of next year.

“We won’t have enough money for 2026, and we have to get caught up,” Kertes said.

Kopas said he can’t yet predict whether a tax increase will be needed to cover interest payments that will be a part of the loan repayments.

It’s a proposal Commissioner Doug Chew said he won’t consider.

“I have no intention to raise taxes,” Chew said.