Gov. Josh Shapiro presented his second budget to lawmakers on Tuesday in an address held in the middle of the state Capitol rotunda.
In doing so, Shapiro outlined his vision for the commonwealth’s next fiscal year – a wide-ranging, $48.3 billion spending plan that invests state dollars in everything from education to State Police cadet classes to efforts to find and plug abandoned oil and gas wells.
Investing in the commonwealth and state programs was one of the major themes of Shapiro’s 90-minute speech, with the governor stressing that “now is the time to invest” some of the money the state has stashed in its reserves. “I don’t want to take any more from the people of Pennsylvania than we need to,” Shapiro said in his address. “Instead, I want to invest in them.”
Each year the governor’s budget address kicks off Harrisburg’s annual budget season, and to help you make sense of his plan – and the host of reactions to it – we’ve gathered 10 takeaways from his budget address and proposal that are bound to receive significant attention in the weeks and months to come.
Big investments in basic education
On the heels of a landmark court ruling that found that the state’s system of funding K-12 public schools is unconstitutional, Shapiro proposed a $1.072 billion increase in basic education funding, following up on a slate of recommendations approved by the state’s Basic Education Funding Commission last month.
The governor’s proposed budget calls for a $200 million investment in the state’s Basic Education Funding formula and an $872 million adequacy investment to help school districts hit adequacy targets, both of which are recommendations made by the funding commission.
The plan also proposes a $50 million increase in special education funding and calls for the establishment of a new statewide cyber charter school tuition rate of $8,000, which the administration estimates will save school districts an annual sum of $262 million.
According to Shapiro administration officials, Shapiro’s budget does not include any school voucher proposals, which were at the heart of a budget stalemate during Shapiro’s first year in office.
Money for school repairs
Shapiro’s spending plan calls for a $300 million allocation for schools to make repairs to address several kinds of environmental hazards, including asbestos, mold and lead contamination. Last year, Shapiro and lawmakers established a competitive grant program to distribute funds to schools that need to make repairs to their facilities.
A new higher education system
A key component of Shapiro’s 2024-25 budget proposal is funding for a new higher education system that he proposed last month. The new system would oversee the 10 universities in the Pennsylvania State System of Higher Education, as well as the state’s 15 community colleges. According to Shapiro’s plan, individuals who earn up to the state’s median income – which is $73,170, according to the U.S. Census Bureau – will have tuition and fees capped at $1,000 per semester.
The 2024-25 budget plan calls for a 15% increase in funding for institutions under the new college and university system – which amounts to a total allocation of $975 million – as well as a 5% increase for state-related universities such as Penn State University, Temple University, Lincoln University and the University of Pittsburgh. Under Shapiro’s plan, Thaddeus Stevens College of Technology would receive a 15% funding increase.
As part of his higher education plan, the governor is also calling for Pennsylvania Higher Education Assistance Agency grants to be expanded by $1,000.
“We need to play a game of addition, not subtraction, and focus on building a world-class system of higher education,” Shapiro said in his address. “It’s time to build on this new blueprint for higher education in Pennsylvania and leave a lasting legacy on this commonwealth.”
A $100M increase for gun violence reduction initiatives
Shapiro’s budget also calls for upwards of $100 million in new funding for a slate of gun violence prevention and reduction initiatives. That includes a $37.5 million increase for the state’s Violence Intervention and Prevention program, as well as a $37.5 million increase for its Gun Violence Investigation and Prosecution Program. The plan would allocate $11.5 million to create a new state program aimed at providing more after-school programs for youth, and $11 million to go toward efforts to build parks, remediate blight and improve spaces in communities affected by gun violence.
The governor also urged lawmakers to take action on gun control bills advanced in the Pennsylvania House. “This year, we have an opportunity to pass the first significant gun reform legislation in 20 years. Why the hell are we OK with loopholes on background checks that allow criminals to get their hands on guns? Just close the loopholes,” Shapiro said. “You all like to talk a big game about law and order. So let’s strengthen our laws and bring about more order.”
Cannabis legalization in the commonwealth
On Tuesday, Shapiro was clear about where he stands on the legalization of cannabis for recreational use: It’s time to legalize it. In his budget address, Shapiro asked lawmakers "to come together and send a bill to my desk that legalizes marijuana."
Shapiro said the bill should include language that allows people with nonviolent possession convictions to have their records expunged. He also said a regulated cannabis marketplace could “create jobs and build wealth here in Pennsylvania, especially in the communities that have been disproportionately harmed by criminalization.” To that end, Shapiro called for using $5 million in cannabis revenue to fund restorative justice initiatives.
According to tax and revenue projections from the Shapiro administration, if the state implemented a 20% tax on the wholesale price of cannabis products, and cannabis sales begin in January 2025, the state would generate roughly $14.8 million in the 2024-25 fiscal year, a figure that Shapiro administration officials expect to increase in subsequent years.
On the topic of cannabis legalization, Senate Majority Leader Joe Pittman, a Republican from Indiana County, said there are “many varying opinions” on legalization, and suggested that he wanted to see more specifics. “The real question is, what are the details?” he said.
Legal skill games
Shapiro’s budget proposal factors in estimated revenue from the potential legalization of so-called games of skill, which are video gaming machines that currently fall into a legal gray area, as courts have ruled the games currently fall outside of the Pennsylvania Gaming Control Board’s purview.
Revenue estimates from the Shapiro administration suggest that a 42% tax on daily revenue from skill games could generate $150 million in revenue in the 2024-25 fiscal year. The estimate assumes the new framework and tax would begin on July 1, 2024.
The legalization of skill games is an issue that has generated bipartisan support in the General Assembly, and Pittman hinted that there could be an appetite in the legislature for regulating the games. “I do think there is some belief that it’s time to regulate and tax games of skill,” he said. “It’s probably time that we bring that issue to the table.”
Public transit funding
The budget proposal presented on Tuesday called for an increase in the amount of Sales and Use Tax revenue used to fund public transportation. Shapiro’s spending plan recommends increasing the amount of money transferred from SUT collections to the Public Transportation Trust Fund by an additional 1.75%. The administration estimates that the increase will result in an additional $283 million for mass transit and an additional $1.5 billion over five years.
The proposal calls for multiple increases for the state’s regional transit systems: a $160 million increase for the Southeastern Pennsylvania Transportation Authority, a $40 million increase for Pittsburgh Regional Transit, and a $6 million increase for the Lehigh and Northampton Transportation Authority.
$3M for menstrual hygiene products in schools
Shapiro also outlined a proposed $3 million line item to make menstrual products available in schools. “Lori (Shapiro’s wife) has spoken to girls who have literally missed school because they got their period and had to run home in the middle of the day – because nothing was available for them at school,” the governor said. “This budget makes feminine hygiene products available at no cost in our schools, because girls deserve to have peace of mind so they can focus on learning.”
A minimum wage increase
Shapiro renewed his call for an increase in the state’s minimum wage, which currently rests at $7.25. The governor’s budget proposes raising the state’s minimum wage to $15 per hour.
Speaking of the current rate on Tuesday, Shapiro said: “It’s anticompetitive and it’s hurting our workers, and as we’ve remained at a flat $7.25, every single one of our neighboring states has raised their minimum wage, as have 30 other states across the country.”
Speaking to reporters following the budget address, Pittman didn’t completely close the door on a minimum wage increase. “We have indicated that if there is any interest in a compromise on that issue, we would be willing to take those conversations to a more detailed and serious level,” he said. “I’m wondering whether or not they have any real interest in reaching a compromise on that issue or using it for political gamesmanship – but time will tell.”
Dems embrace the plan while Republicans push back
Shapiro mentioned the divided nature of the General Assembly in Harrisburg, which was on display on Tuesday in the state Capitol.
Democrats, who control the state House, welcomed Shapiro’s budget plan, with House Democratic leaders saying in a joint statement that the spending plan is “a comprehensive proposal that builds on last year’s historic investments in education while recognizing the important work of the Basic Education Funding Commission.”
“As our economy continues to strengthen, this is a critical moment in time to invest in our workforce and economy. Governor Shapiro’s proposal prioritizes investments that will attract and retain businesses while growing our workforce,” the leaders continued. “We’re very encouraged that this plan makes key investments without raising taxes or diminishing our healthy surpluses.”
While Pittman expressed an openness to negotiating with the Shapiro administration on raising the minimum wage and regulating skill games, many Republicans took issue with the level of spending in Shapiro’s budget and questioned where the funding would come from.
Senate President Pro Tempore Kim Ward said during the Senate GOP response to Shapiro’s budget address that she didn’t hear anything about how Shapiro planned to address high utility, food and gas prices, and called his budget plan “a budget of unicorns and rainbows without any real explanation of how we’re going to implement it and how we’re going to pay for it.”
Pittman echoed those concerns. “Obviously the governor today put forward his vision for the commonwealth, and I think it’s safe to say that much of what he put forward doesn’t comport with the vision that we have for this commonwealth,” he said. “What he has put forward here is absolutely fiscally irresponsible and unsustainable.”
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