State budget done: Education, tax reforms take center stage

(The Center Square) – Pennsylvania’s $47.6 billion budget became law late Thursday, a full 11 days past due.

It’s chock-full of new education and human services spending, tax and regulatory reforms for businesses, and an infusion into mass transit systems that continue to hemorrhage money postpandemic.

Flanked by Democratic leaders in the House and Senate, Gov. Josh Shapiro credited himself for “bringing people together to deliver bipartisan results” before signing the bill.

"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,” he said.

House Speaker Joanna McClinton, D-Philadelphia, said in a statement that the plan “delivers on so many Democratic priorities” – namely, an infusion of more than $500 million to struggling schools, in acknowledgment of a court order to redirect resources based on need.

Senate Republican leadership said their absence was not a protest; rather, they were fielding questions at their news conference elsewhere in the capitol.

Senate President Pro Tempore Kim Ward, R-Greensburg, said the final plan brought Shapiro’s $48.3 billion “unicorns and rainbows” proposal back down to Earth, while still delivering more than $1 billion in new funding for schools, particularly in poorer districts.

The leaders say that accelerating the reduction of the state’s notoriously high corporate net income tax rate, expanding a deduction for small business start-up costs, and offering employers tax credits for contributing to child care costs for workers will also grow the economy to support $2.7 billion in new spending.

House Republicans, however, weren’t shy about their disdain, saying that it drains the state’s savings accounts to support recurring new costs and barrels down the path of tax hikes.

Rep. Aaron Bernstine, R-Ellwood City, called it the worst budget he’s ever seen during his last year eight years in office. He, along with more than three-quarters of the lower chamber’s Republicans, voted against the bill.

The party further dinged Shapiro for draining Pennsylvania’s surplus from $8.1 billion to $3.5 billion in less than two years. The spending pace means lawmakers worry they may be forced to raid the state’s $7 billion emergency savings account in the next two years.

Still, all sides applauded the state’s new college affordability plan that offers $5,000 annual scholarships to students pursuing high-demand careers, so long as they stay in Pennsylvania for at least a year post-graduation.

The “Grow PA Plan” is part of government’s broader strategy to boost the state’s workforce to support its aging population and ward off an economic death spiral many fear is on the horizon.