Senate Republicans to Introduce Legislation Providing Loan Interest Forgiveness to Counties and Head Start

HARRISBURG - Senate President Pro Tempore Kim Ward (R-39), Majority Leader Joe Pittman (R-41) and Appropriations Chair Scott Martin (R-13) announced their intention to introduce legislation forgiving the interest on loans following the announcement by State Treasurer Stacy Garrity to help Head Start providers and counties during the state budget impasse.

Last week, Treasurer Garrity announced up to $500 million in available loans offered at a 4.5 percent interest rate to help qualifying entities cover necessary expenses in the absence of a state budget.

Senate Republicans continue to negotiate in good faith to bring the Governor and House Democrats to a responsible bottom line to complete this year's spending plan. Gov. Shapiro and House Democrat leaders continue to advocate for plans that spend beyond taxpayers' means, setting Pennsylvania on a course of fiscal uncertainty and tax increases.

"Last week Treasurer Garrity made a bold and important move to help keep monies flowing to counties by giving them the ability to borrow from the Treasury at the lowest rate possible during this budget impasse. The law requires the Treasurer to charge interest on lending despite money continuing to flow into the Treasury and not being dispersed but collecting interest," said Sen. Ward. "As such, we plan to offer legislation to provide forgiveness on the interest for those loans to ensure services don't suffer while we continue to finalize a state budget."

"In August, the Senate passed legislation to enact last year's spending plan, to prevent the very impacts the Treasurer is addressing now. While work to complete a 2025-26 budget agreement continues, the steps taken by Treasury are a way to provide immediate relief, and our legislation will mitigate further negative effects by forgiving interest accrued," said Sen. Pittman. "We remain focused on effectuating a final spending plan that respects taxpayers, while allowing Pennsylvania to grow."

"As a former County Commissioner who served during a prolonged state budget impasse in 2015, I understand the challenges presented by a delayed budget. It's very much why I am hopeful those challenges, including the need for accrued interest costs, could be minimized by the House passage of the plan the Senate approved in mid-August to get state and federal funding out the door without further delay," said Sen. Martin. "I appreciate Treasurer Garrity taking action to prevent any disruption of services, and this complimentary action will ensure more state dollars can be put to good use in serving people in need, as we work on this bill to minimize cost impact to our partners even more."

CONTACT: Erica Clayton Wright (Senator Ward)
Kate Flessner (Sen. Pittman)
Jason Thompson (Sen. Martin)