Pennsylvania Governor signs state budget

HARRISBURG, Pa. (WHTM) – Pennsylvania Governor Josh Shapiro signed the state budget deal late Thursday night saying the deal was a compromise by both sides of the divided legislature.

The main bill of the $47.6 billion budget passed the Democrat-controlled House 122-80 and the Republican-controlled Senate 44-5 on Thursday.

The plan doesn’t increase sales or income tax rates, the state’s two major revenue sources, although the package carries tax cuts for businesses to deduct more losses and students to deduct loan interest. It also doesn’t include big topic items like games of skill, a minimum wage increase, or legalized marijuana.

It will require about $3 billion of surplus cash to balance, leaving about $10.5 billion in reserve. Shapiro had initially proposed a $48.3 billion plan.

“Since my first day in office, I’ve been focused on getting stuff done for the good people of Pennsylvania, solving the most pressing problems we face, and bringing people together in a bipartisan manner to deliver results – and I’m proud to sign this budget into law that makes historic investments in education and economic development, while continuing investments in public safety and violence prevention, all while cutting costs and reducing taxes,” said Governor Josh Shapiro. “Pennsylvania is the only state in the nation with a divided legislature – and I’m proud that we came together with leaders in both Chambers and both parties to show that we can do big things together to make Pennsylvanians’ lives better.”

A full summary from the House Appropriations Committee can be read below.

For public schools, the legislation delivers about $900 million more for instruction and special education, about a 9% increase, plus hundreds of millions more in new subsidies for school construction and tuition to private and cyber charter schools.

A substantial portion of the aid — about $526 million — is designed to represent a first step in responding to a court decision that found the state’s system of school funding violates the constitutional rights of students in poorer districts.

For weeks, a behind-the-scenes struggle played out between Republicans and Democrats over how to distribute the money.

In any case, the legislation falls well short of the amount — a $6.2 billion increase phased in over five years — sought for underfunded schools by the districts that sued and won in court. It is also smaller than the $870 million Democrats had pursued as the first step of a seven-year, $5.1 billion increase.

For higher education, the plan devotes an additional $260 million, or about 13% more, with most of the increase headed to the state-owned university system and to the Pennsylvania Higher Education Assistance Agency to expand grants to students.

Making college more affordable was a focus of Shapiro’s and Republican lawmakers in recent months. Still, the plan gives no increase in aid to Temple University, the University of Pittsburgh and Pennsylvania State University to subsidize in-state tuition.

On the human services side, a priority of Shapiro’s, ending a waiting list of thousands of families who need help for an intellectually disabled adult relative, will get an additional $228 million, or 10% more, as the first step in a multiyear plan. That is about half the amount that advocates say is needed to fix a system beset by staffing shortages, low pay and a thousands-long waiting list.

Nursing home operators will get a slight increase in rates amid warnings that inadequate Medicaid reimbursements are forcing a growing number of homes to close. Counties will see a $20 million increase for mental health services, far short of the $250 million they had sought for a system they call crumbling and broken.

Shapiro, meanwhile, had sought about $280 million more for public transit systems — about 20% more — that are still struggling to recover ridership from the pandemic. Instead, Republicans agreed to about $80 million.

On economic development, Shapiro has vowed to compete with other states that are pouring billions into subsidies to attract microchip fabrication plants, electric vehicle battery plants and other huge projects. He proposed borrowing $500 million to get large plots of land ready. Lawmakers agreed to borrow $500 million, including $100 million for roads, water and sewer extensions.

“The governor and House Democrats started this budget process calling for unicorns and rainbows in the form of new spending on radically progressive programs and increased school funding in a few select locations across the state,” said Senate President Pro Tempore Kim Ward. “Instead, Senate Republicans prioritized funding for programs that are showing results so our residents get real benefits while serving as a backstop against tax increases that would have been forced by the Democrat agenda.”

“This budget is built on two fundamental principles – honesty and empowerment. It’s honest about the realities and the limitations of divided government. It’s honest about finding new ways to fund educational opportunities, helping those who provide health care and human services, and paying our commonwealth’s bills with no tricks, gimmicks or games,” Majority Leader Joe Pittman said. “This is also a budget that empowers. It empowers parents to make decisions to benefit their children, job creators through permitting reforms and improving our state’s tax policies, law enforcement to maintain law and order, and taxpayers with $700 million more committed to our Rainy Day Fund.”

Pennsylvania House Democratic Leadership today issued the following statement on the passage of the 2024-25 state budget:

“This budget delivers a win for all Pennsylvanians. It builds a better future for all of us. It reflects the priorities shared by House Democrats and Governor Shapiro and demonstrates our ability to lead and work together despite a divided government to deliver for Pennsylvanians. We got stuff done.

“We delivered more money for schools to help every kid and made targeted investments to ensure money goes where it’s most needed while providing tax relief to the most overburdened taxpayers. This budget invests massive, historic money – a $1.3 billion investment — that helps every kid in every school and meets our moral, constitutional and legal obligation to our kids, schools, parents and taxpayers. This is a long-overdue step toward real adequacy, fixing decades of underfunding and unfair funding. This is more money than they’ve ever received because we’re finally investing money where it will do the most good.

“We cut taxes and costs for working families and we delivered more money to create jobs on Main Streets across the commonwealth.

“We took a solid step forward with the passage of this budget, but we also recognize we have a massive surplus and could have taken a giant leap forward to cut more costs and help more working families. We’re not done fighting yet. We’ve already passed nearly 400 bills that cut costs and improve lives for Pennsylvanians – and we’re not stopping now.”

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