Gov. Shapiro signs 2024-25 Pennsylvania budget, calls it a ‘major victory’

Gov. Josh Shapiro signed into law a bipartisan budget for fiscal year 2024-25 on Thursday, July 11, 2024. (Commonwealth Media Services photo)

Gov. Josh Shapiro signed a $47.6 billion budget package on Thursday that represents a 6.2% increase in spending and provides more money for public schools, students attending state colleges and human services.

The spending plan, which is about $700 million less than Shapiro’s March budget proposal , nonetheless includes funding for several of his marquee initiatives. They include hundreds of millions for a strategic economic plan and a funding increase for public transit.

“This budget is a major victory for the people we were all elected to serve,” Shapiro said in remarks before signing the budget. “I spent a lot of time outside this building in Pennsylvanian’s neighborhoods and towns, listening to them … folks basically want the same four things.”

Shapiro said the budget answers their desire for good schools, safe communities, economic opportunity, and personal freedom. It provides:

• A total of $11 billion in K-12 education funding;
• More money for public safety including $1.2 billion for state police allowing the agency to hire 400 new troopers for the second year in a row;
• Investments in main streets, tourism, agriculture, and $500 million to develop shovel-ready industrial sites for new businesses; and
• Tax cuts for senior citizens, tax credits to help families pay for childcare and interest on student loans, and new funding to end a waiting list for support professionals for the intellectually disabled and autism community.

“We have proven that we can make progress. We can bring people together to solve big problems,” Shapiro said. “No one in the room got everything that they wanted. And there are some things we didn’t get done this time. We’re all going to come back and fight for next time.”

In that category are Shapiro’s proposals to legalize cannabis for adult recreational use and to regulate and tax skill games. Senate President Pro Tempore Kim Ward (R-Westmoreland) was critical of Shapiro for not following through on a taxpayer funded private school tuition voucher program for students in the state’s lowest performing school districts.

The budget increases funding for a similar program that provides tax credits for individuals and companies that contribute to private school scholarship funds by $75 million.

“I am disappointed that we weren’t able to get something done for the children that are trapped in failing schools. … I want to go back at some point and fight for this program that the governor said he supports, but had no interest in pursuing at all this time around,” Ward said Thursday after the Senate finished voting.

Senate Majority Leader Joe Pittman (R-Indiana) praised Shapiro for continuing a reduction in the corporate net income tax to make Pennsylvania more attractive to businesses. Shapiro noted the budget also expands the ability for businesses to deduct operating losses from their tax liability to encourage startups to locate in the commonwealth.

The centerpiece of the budget is a response to the 2023 court order that declared the state’s school funding system unconstitutional . In a compromise between Senate Republicans and House Democrats, the budget will provide about $526 million to correct inequities in public education as part of more than $1.1 billion in new funding for school districts.

Here’s some of what’s in the bill that directs historic new Pa. education funding

Although the package is smaller than a version of the plan passed in the House last month, Appropriations Committee Chairperson Jordan Harris (D-Philadelphia) called it a historic downpayment on the gap between the commonwealth’s wealthiest and poorer school districts.

“We’re glad to see that the money is going to the districts that needed the most in accordance, in our view, with what the Commonwealth Court ruling said we should be doing,” Harris told reporters Thursday evening as the House and Senate held votes.

House Speaker Joanna McClinton said the budget also provides for many Democratic priorities beyond education.

“It delivers for our communities by investing in proven public safety initiatives and by providing tools to law enforcement to keep our streets safe. And it delivers for working families by helping them stay in their homes, afford childcare, and access the health care they need,” McClinton said.

The budget consists of more than a dozen pieces of legislation that provide instructions on how state agencies are to spend the money allocated to them in the general appropriations bill.

The appropriations bill, Senate Bill 1001, passed the House in a 120-80 vote, with all opposing votes cast by Republicans. The Senate concurred in House amendments to the bill in a 44-5 vote.

Rep. Seth Grove (R-York), who is the ranking GOP member of the Appropriations Committee, urged no votes on the appropriations bill, noting that since Shapiro took office, the state’s budget surplus has been reduced by nearly $5 billion.

“What will he have gotten for it? Has state government changed all that much? Do constituents tell you, thanks for spending more money? Does it really improve government service? I don’t get those calls, and I doubt this budget will change much of anything,” Grove said.

Grove has warned that depleting the surplus contributes to a structural deficit by spending money that is not certain to be replaced with new revenue.

“The surplus will be gone next year, and this body will be looking for billions of dollars in new revenue. So citizens of Pennsylvania, the tax man is coming for your wallets. You can guarantee that,” he said.

Harris countered that the state budget is a “moral document,” not just dollars and cents, but a statement of values.

“You should vote for this budget for the educational spending that is in it, because at the end of the day, if our children can’t read or write or do math, it is not necessarily their fault,” Harris said. “It is the failure of the body to provide the resources that they need.”

Education funding was the central sticking point during budget negotiations, which lasted 11 days beyond the end of the fiscal year, when the state Constitution says a new budget should be in place.

Lawmakers have been working for nearly a year to craft an answer to Commonwealth Court President Judge Renee Cohn Jubelirer’s order directing Shapiro and the Legislature put in place a system that corrects inequities created by the state’s reliance on property taxes to pay for public schools

Rep. Mike Sturla (D-Lancaster) was chairperson of the bipartisan commission that recommended the package to establish funding parity, provide relief to overburdened taxpayers and set a new funding baseline for all 500 school districts.

Although the new budget provides less equity funding, Sturla said he is satisfied with the compromise.

“It’s not heaven, but it’s not hell,” Sturla said, adding in an interview that “there is far more good than bad.”

However, Sturla is unhappy with the data on poverty rates that will be used to distribute those funds. Instead of using numbers derived by the state Education Department from public benefit enrollment data, the budget directs the state to use U.S. Census data to determine poverty levels in individual school districts. Sturla believes that the census data will be less accurate.

“The census numbers historically underreport poor people,” Sturla said.

The court decision was the outcome of nearly a decade of litigation on behalf of six school districts and the parents of children that attended those schools. The Education Law Center and the Public Interest Law Center, which represented the plaintiffs, praised lawmakers on Thursday for admitting that inequities exist while saying they had understated the problem.

“Even though legislators artificially reduced the size of the state’s funding shortfall by undercounting students in poverty, at least now there is bipartisan agreement that adequately funded education requires, at minimum, an additional $4.5 billion, distributed to the communities that need it most,” the organizations said in a statement.

The Basic Education Funding Commission put the state’s share of the funding shortfall at $5.1 billion. Harris told reporters Thursday night that the $426 million in the budget will “come off the top” of that sum and that the Legislature will provide additional installments in future budgets.

Although the education funding plan passed as part of the budget does not specify a timeline, Harris said lawmakers intend to stick to their plan to pay the full amount over the next seven years.

The House plan passed last month also called for reforming funding for cyber charter schools by setting a statewide tuition rate. School districts are currently required to pay cyber charter schools the same tuition they pay to brick-and-mortar charter schools, which advocates say results in massive overpayments beyond the actual cost of providing virtual education.

Under the compromise passed Thursday, the budget provides $100 million to reimburse school districts for cyber charter tuition. It also includes restrictions on advertising by requiring a disclaimer that charter schools are funded by taxpayers.

Sturla also took issue with a new mandate for each school district to hire security, money he said could have been better spent on education programs in struggling schools.

“There’s only one mandate that’s in the constitution,” Sturla said. “If I don’t pave another road, if I don’t give another tax break, if I don’t do something for a corporation … If I don’t do any of that stuff, no one can take me to court and say I’m in violation of the constitution. The only thing someone can take me to court for — and by the way somebody did — is not funding education in an adequate and equitable manner.”

The budget also includes a slate of higher education reform bills to expand scholarships for students in the Pennsylvania State System of Higher Education and to establish a state Board of Higher Education and a council to develop  system performance measures to allocate state-related university funding.

The state-related universities, so-called because of the state’s limited oversight, will receive $500 million in the budget.

Rep. Jesse Topper (R-Bedford) said the performance-based funding would provide confidence for lawmakers in funding the schools.

“These are flagship universities in the Commonwealth that bring students here from all over the world. But that’s just what we hear. We need to see that reflected if we’re going to continue to support tuition through tax dollars. We need to see what exactly that is,” Topper said.

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