How the PA Legislature Cooks the Books and Starves Taxpayers to Feed Their Slush Funds

Rock the Capital
Mar 8
5 min read

A TAXPAYER'S GUIDE

Every year, House and Senate Appropriations Committees hold budget hearings requiring dozens of governmental department heads to explain how state money was spent in the previous year and to justify the appropriations they are requesting for the new budget year. This year, the Appropriations Committees held more than 95 hours of hearings.

One "department" is always missing from these hearings.
This "department" has the seventh largest annual appropriation of all departments — $492 million.
This "department" is our legislature.

The Legislature should be required to sit through budget hearings to justify what they spent and what they want for the next fiscal year, just like everyone else has to do.

Legislative Slush Funds: How the Scam Works

The annual farce — where the public is banned from speaking and auditors are told not to make recommendations — is held in the bowels of the Irvis Building. "Farce" is too civil a description.

Every year, Legislative Audit Advisory Commission ("LAAC") members open the meeting by stating what they can't do, then quietly approve unjustified estimates based on the fiction that they need the money so the Governor won't starve them out. (Fillman v. Rendell, 2009) They release the report mere moments before the Governor presents his budget — which is all the media seems to have bandwidth for.

Most of the funds are going to pensions and salaries.

So why do legislators need $389 million in reserve?

It is beyond hypocritical that we are entering yet another budget negotiation period — with everyone looking for ways to increase revenues — while legislative leaders are quietly sitting on nearly $400 million.

No other agency receiving General Funds through the budget accumulates unspent funds at year's end, and essentially no other agency can transfer General Funds from one line item to the next. Besides the Legislature and their agencies, there are only three other exceptions to lapsing funds:

Section 7106. Lapsing of Unused Funds:

(a) General rule. Except as otherwise provided by law or by this section, that part of all appropriations in this act that is unexpended, uncommitted, or unencumbered as of the close of the current fiscal year shall automatically lapse as of that day.

(b) Exceptions. The following shall be continuing appropriations:

Health Care Cost Containment Council
Supreme Court for the unified judicial system security program. [1 line item]
General Assembly
Government Support Agencies
PA Emergency Management Agency for disaster relief, hazard mitigation, and State disaster assistance. [3 line items]

Section 7109 governs the transfer of money among legislative agencies. The language permitting legislators to move agency funds into House and Senate line items is vague. Moreover, those who are allowed to allocate funds should be required to account for them before the Commission.

Sleight of Hand

For Rock the Capital's ("RTC's") calculations, we use the House, Senate, and Legislative Agencies' funds — not just House and Senate. They transfer so much from these agencies into House and Senate line items that it effectively functions as one large pool of money.

They transferred $79.2 million from agencies to House and Senate line items in the last seven years — almost entirely from the Legislative Data Processing Center (see below).

When examining the 2025 Audit, our focus is on the "Appropriation Balances Before Commitments." We recognize that audit procedures include "commitments" in the report; however, in our view, the legislature receives another annual appropriation that is used to pay those commitments. Is that an appropriate way to report it as a non-audit entity?

Partners in Crime: Leadership's Appropriation Balances Before Commitments

Fiscal Year Balance

2024–25 $388,730,762

2023–24 $375,140,020

2015–16 $138,945,957

With 2024–25 disbursements of $463 million, average monthly disbursements were $38.6 million. That means $389 million covers 10 months of expenditures — and for the last five years, it has consistently been 10 months.

The legislature knew — and everyone could see — that the ~$389 million surplus at the end of budget year 2024–25 was visible in the Budget Office's June 30, 2025 monthly status report for the General Fund.

They had to have known this excess was even greater than the previous year, by approximately $13.6 million.
Yet during continued budget negotiations through November, the budget bill they wrote — and Governor Shapiro signed for 2025–26 — gave the House and Senate a 2% increase from the previous budget year, and Legislative Agencies a 4.8% increase (with increases to only 6 line items; 11 line items received no increase).
So much for whittling down their Slush Fund.
They continue to appropriate more than they need.

Partners in Crime: House Democratic and Republican Leadership

The legislature significantly appropriates more than it disburses:

10-Year Total Appropriation Disbursed Overpayment

Republican: $61,474,000 $37,652,375 $23,821,625

Democrat: $61,274,000 $18,144,826 $43,129,174

These two line items represent a significant portion of the total Slush Fund from the latest audit— 36.5%.

End-of-Year Surplus, 2024–25:

Republican SLF: $98 million
Democrat SLF: $44 million
Total Slush Fund: $389 million ($98M + $44M = 36.5% of total)

The House's Laundromat and Mint Machine: The Legislative Data Processing Center

The Legislative Data Processing Center ("LDPC") appears to be the preferred vehicle for over-appropriation and subsequent transfers to House and Senate line items:

10-Year Total Appropriation Disbursed Overpayment

LDPC $297,573,000 $196,600,677 $100,972,323

In the last ten years, LDPC end-of-year balances grew by $33 million:

2015–16: $15.9 million
2024–25: $48.8 million

In addition, $68.3 million was transferred out over those ten years — mostly in the last five years, where it has become a reliable pattern.

Caucus Funds

The four caucus line items represent a significant share of the overall budget:

For 2024–25: $245 million out of a total House and Senate appropriation of $405.4 million — 60%.
As a share of the combined House, Senate, and Legislative Agencies appropriation of $477.5 million — 51%.

Is there any public listing of what these accounts pay for? Any breakdown — even just categories without dollar figures?

While there has not been a significant increase in the four caucuses' year-end balances over the last five years, three of them — Senate Republican, Senate Democrat, and House Democrat — have been outspending their annual appropriation each of those five years. In the last two years, the House Republican Caucus has also begun outspending its annual appropriation.

In 2024–25, the caucuses were appropriated $244.7 million and disbursed $261.8 million. It appears they make up the difference by transferring money from Legislative Agencies into these line items.

There is no clear accountability for more than 50% of the entire $492 million legislative appropriation — who is getting what, and how much.

Transfers Into Caucus Accounts, 2020–21 to 2024–25:

Caucus Transferred In

House Republicans $3,924,551

Senate Republicans $8,583,337

Senate Democrats $2,453,896

House Democrats $21,757,411

Total $36,719,195