Miss Penn sits on top of the dome at the Pennsylvania Capitol in Harrisburg, Pa., Thursday, June 29, 2023. (AP Photo/Matt Rourke)

Delays in state payments are hitting Pennsylvania schools as they prepare for the return of students later this month.

The delays cover $2.5 billion of state payments for K-12 and higher education institutions and other entities due to the lack of a state budget for Fiscal Year 2025-26.

The budget is more than a month late with no sign of a deal between Gov. Josh Shapiro, Senate Republican and House Democratic leaders on legislation to present to lawmakers for a vote.

Budget Secretary Uri Monson said a range of state payments to schools, organizations and entities are delayed during the next six weeks as a result.

Without a state budget for the new fiscal year, State Treasurer Stacy Garrity may only approve state payments if there exists sufficient legal authority to issue a warrant approving the payment, her office said.

That condition includes payments appropriated in a prior fiscal year that aren’t affected by the absence of a current appropriation, a mandated payment by state or federal authority, independent of a General Fund appropriation and payments necessary to maintain public health, safety and welfare through state police powers.

The delayed state payments include a $1.4 billion basic education subsidy payment and $255 million special education payment normally paid in July and August to school districts, as well as $99 million in federal grants going to school districts. Various state subsidies for Social Security and pupil transportation paid in August won’t be made.

Other delayed payments

— A $21 million subsidy payment for Career and Technical Education Centers is delayed.

— A $27 million payment for Pre-K Counts and $13 million in payments for Head Start are delayed.

— Monson said those delays could impact providers’ ability to keep staff and retain children.

— $2 million in federal grants for local organizations that run afterschool and adult basic education programs are delayed.

— For higher education, $51 million for the four state-related universities, $100 million monthly for the Pennsylvania State System of Higher Education starting in July and $98 million in payments to community colleges are delayed.

— Libraries won’t receive $13 million in payments for July and August.

The Pennsylvania Libraries Association said the 29 library districts are due a payment this month. Most libraries are nonprofits and don’t have large reserves to cover late payments, PLA said.

Libraries don’t have a way to recover expenses for taking loans so they are more likely to cancel services if they don’t have the money on time, the PLA added.

Pennsylvania provides billions of dollars of annual subsidies to schools, but the payments are staggered through the fiscal year.

State payments due in September include special education, school employees retirement and Social Security and pupil transportation, according to the Pennsylvania School Business Officials Association.