Pa. budget talks continue into the weekend with lawmakers scheduled to return to Harrisburg

Harrisburg, Pa. — The June 30 deadline for Pennsylvania’s 2025 budget has come and gone without a funding deal, again. But despite staying mostly mum on details, all sides — the governor’s office, Senate Republicans and House Democrats — have expressed optimism that a deal is coming. Soon.

Gov. Josh Shapiro’s office in particular has kept its cards close to the chest.

Asked multiple times to elaborate about specific components of the budget talks, Manuel Bonder, a spokesperson for Shapiro wrote in an email, “Governor Shapiro and legislative leaders have been working hard to finalize a budget that delivers for our Commonwealth. The Governor has been engaged in a positive, productive dialogue in Harrisburg with leaders in both parties — and he will continue doing so over the coming days as we work to close this deal.”

So far, the clearest picture of where budget talks stand has come from Senate Majority Leader Joe Pittman (R-Indiana), who addressed the Capitol press corps from a podium in a tightly packed room on Wednesday, just before the July 4 holiday.

Pittman called the ongoing negotiations “cordial” and “productive,” even complimenting his Democratic counterparts for their willingness to engage and compromise.

But, as last year’s fight over a proposed school voucher program for students attending private schools showed, the devil is in the details.

“Unless everything is agreed to, nothing’s agreed to,” Pittman said. “But I still remain optimistic and hopeful that we’re going to conclude this process in the next several days. Exactly how that may unfold remains an open question.”

Beth Rementer, a spokesperson for House Democrats, said in a statement Friday, “we continue to work with all parties in good faith to agree on a budget that makes constitutionally required investments in public education, supports our world-class higher education institutions, moves our economy forward and continues to support the programs and services Pennsylvanians rely on.”

Education

Pittman’s press conference on Wednesday, however, offered more detail.

Primarily, he characterized funding for the state’s public school system as one of the hurdles.

In February, a Commonwealth Court judge ruled that the state’s current school funding system is unconstitutional. The ruling, written by Republican Judge Renée Cohn Jubelirer, capped a lawsuit brought in 2014 by parents, advocates and multiple Pennsylvania school districts.

The problem, Jubelirer wrote, was the massive equity gap between the state’s poorest and wealthiest districts. And advocates have maintained that the state may be underfunding its public education system by billions of dollars.

In June, the Democrat-majority House passed a bill to send more than $5 billion over seven years to some of the state’s poorest school districts.

In his February budget address, Shapiro called for more than $1 billion in new education spending, nearly twice what was budgeted last year.

Senate Republicans have balked at some of those proposals. The governor’s plan includes spending billions from the state’s surplus funds, something that Senate Republicans are loath to agree to.

However, on Wednesday Pittman characterized the current disagreements over school funding as being less about how much the state will spend, and more about how that money will be distributed.

“One of the biggest areas of difference is not only spending on education, but how those dollars get driven to school districts,” Pittman said.

Pittman said that Senate Republicans would like to see funds allocated to districts based on census numbers, as opposed to what he described as Democrats’ plan to rely on school districts’ self-reporting.

In February, Shapiro proposed what his office called “a new adequacy formula.” As it stands, much of Pennsylvania’s public school funding comes from local property taxes, which has had the effect of exacerbating differences between schools in poor and wealthy districts.

Taxes and a $15 billion surplus

Another area of disagreement is over a Senate Republican plan to cut personal income taxes from 3.07% to 2.8% and cut gross receipts taxes that can affect electric rates.

A bill containing the tax cuts passed the Senate, even gaining support from a number of Democrats. But it was never taken up in the House.

The cuts, which would amount to $3 billion, were effectively a counter-proposal to Shapiro’s plan to increase state spending by roughly the same amount, with much of the new funding going to the state’s schools.

Republicans also still want increased state-funding for students attending private schools, despite consistent opposition from Democrats in the House.

A so-called school voucher program, which would send money to Pennsylvania families sending their students to private schools was one of the biggest sources of acrimony in last year’s drawn-out budget talks.

Shapiro himself has been open to the idea, separating him from a large majority of the state’s Democratic lawmakers, though he ultimately vetoed a line item to fund them last year. Republicans accused him last year of reneging on a deal to include them in the 2024 budget, with House Democrats threatening to veto any bill containing them.

Though, according to Pittman, some sort of funding for students attending private schools remains on the table.

Last week, Senate Republican Judy Ward (R-Blair) introduced a bill that would provide a tax credit of $6,000 per student to families sending their kids to non-public schools.

However, the idea was shot down by both House Democrats and Shapiro’s office.

At his press conference, Pittman also said that expanding an existing earned income tax credit for people and businesses who fund private school scholarships remains on the table.

Making college more affordable

There is also no word yet on how Democrats and Republicans will resolve their differences over how to make Pennsylvania colleges and universities more affordable.

In his budget address, Shapiro proposed capping state school tuition at $1000 for most Pennsylvanians.

Senate Republicans conversely passed a package of bills last month comprising an alternative vision of how to cut the cost of colleges.

Their plan would focus on creating scholarships for students who study to and enter in-demand occupations in Pennsylvania and plant roots in the state.

Primarily, that would look like scholarships available to both in-state and out-of-state students that they would have to pay back unless they agree to work in the state for five years following graduation.

Another part of that plan would expand the existing Ready-to-Succeed scholarship for lower- and middle-income students. It would lower the GPA requirements for students who qualify for the scholarship from 3.25 to 2.5, and raise the household income limit for those students’ families from $126,000 to $175,000.

The plan would also create new scholarships for both in-state and out-of-state students either in foster care or adopted as older teenagers.

Another lingering question is exactly how much total funding the budget will provide for the state.

Asked by one reporter about what the overall spending number would be, Pittman said he believed it would be below the $48 billion pitched by Shapiro earlier this year. But pressed on specifics, Pittman deferred.

“Until everything is agreed to, nothing is agreed to,” Pittman repeated.

The budget is also expected to include increased funding for senior care, with Pennsylvania’s aging population on the rise.

Shapiro has also pitched a 10-year economic development plan that he hopes will help attract corporate investments in agriculture, energy, life sciences, manufacturing and robotics and technology.

Schedules have been made and remade over the last week, but as it stands both the Democratic-majority House and the Republican-majority Senate are scheduled to be in Harrisburg Sunday.

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