Shapiro signs into law bipartisan budget emphasizing education, employment, health care

• Reaction to the bipartisan budget is swift and mixed.

• Budget priorities include education, economic development, workforce development, affordable housing, health care, public transit, and infrastructure.

• The budget is expected to give Pennsylvania a $10.6 billion surplus by June 30, 2025.

 

Gov. Josh Shapiro signed into law late Thursday night a long-awaited, bipartisan budget for fiscal year 2024-25.

The governor’s office declares that the budget delivers on Shapiro’s top priorities with historic investments in education, economic development, law enforcement and violence prevention, workforce development, affordable housing, health care, public transit, and infrastructure .

"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," Shapiro said in a statement. "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."

Reaction to the budget was swift and mixed. Senate Republicans announced the budget as “e mpowering, fiscally responsible, and pro-growth.” House Republicans labeled it “irresponsible” and “a big spending spree.”

Pennsylvania Chamber of Business and Industry President and CEO Luke Bernstein said the 2024-25 state budget takes important steps to make Pennsylvania more competitive.

“This budget includes several key legislative priorities that the PA Chamber has long championed, including eliminating Pennsylvania’s Startup Tax by raising the cap on net operating losses, modernizing our permitting processes, and advancing workforce initiatives,” said Bernstein. “These provisions will help attract new economic opportunities, expedite project approvals so that businesses can grow and create jobs, help employers address workforce challenges, and equip Pennsylvanians with the skills needed for the future.”

The PA Chamber said the budget addresses several of the statewide business community’s top priorities, including permitting reform, tax reform, and workforce development.

TheNational Federation of Independent Business (NFIB), the nation’s leading small business advocacy association, released the following statement byAssistant State Director Melissa Morgancommenting on the new budget:

"NFIB is pleased that the recently enacted 2024-25 state budget does not contain new or increased taxes on the small business community. However, we are disappointed that no small business tax reforms, including authorizing pass-through entities to utilize net operating losses the same as large corporations, repeal of accelerated sales tax prepayments, or a personal income tax deduction, were part of the final plan."

Donald Smith Jr., president of the Regional Industrial Development Corporation (RIDC) ?in Pittsburgh called the budget an historic step to get "back in the game" in economic development. Citing the allocation of $500M to the PA Sites program, Smith said the “investments will not only help enhance economic vitality across the commonwealth, bringing companies and jobs to PA, but research shows that it can generate state revenues that more than pay back the investment.”

Zach Shamberg, president and CEO of the Pennsylvania Health Care Association said the state budget speaks to the growing need for long-term care to support seniors and adults with disabilities. S tate leaders, Shamberg stated, have taken “a critical step” in addressing those needs, allocating $120 million annually to the state’s Medicaid program for nursing home residents effective Jan. 1, 2025.

“This additional funding will help to cover the cost of Pennsylvania’s increased nursing home staffing mandate and take steps to reduce the mounting Medicaid shortfall the difference between state reimbursement and the true cost of care,” said Shamberg.

The Hospital and Healthsystem Association of Pennsylvania (HAP) issued a statement thanking legislative leaders and Gov. Shapiro for prioritizing key health care priorities:

“Bolstering care that supports healthy moms and babies and preserving access to hospital care in rural communities,” said HAP President and CEO Nicole Stallings . “We look forward to continued work with the administration and General Assembly to support healthy and economically strong communities and ensure Pennsylvanians’ access to high-quality care.”

Mia Haney, CEO of the Pennsylvania Homecare Association, was disappointed with the absence of increased funding for Direct Care Workers and Nurses.

"Despite months of tireless advocacy and compelling evidence highlighting the critical need for support of our Direct Care Worker and Nursing workforce, we are deeply disappointed to see a budget that fails to recognize the importance of these critical home and community-based services," said Haney. “These services are an important part in the prevention of more costly institutional-based care. Furthermore, we are seeing increases for these services in many of our surrounding states, leaving Pennsylvania as one of the lowest in reimbursement for care, with the greatest aging population. The result is a workforce compensation structure that simply does not meet current competitive and inflationary demands. Pennsylvania will see more workers leaving the industry and more patients waiting for care.”

The principal partners of the Pre-K for PA and Start Strong PA Campaigns said the budget fails to address crisis in early childhood sector to the detriment of working families and employers.

While the Pre-K for PA Campaign saw “modest growth” in the state’s publicly funded pre-k programs, the Start Strong PA Campaign was “deeply disappointed by the lack of direct investment to help childcare providers recruit and retain their workforce as part of the state budget bill.”

The Transit for All PA! Coalition noted the budget’s $80 million funding for public transportation, calling it “a necessary band aid” from the state legislature.

“ The additional $80 million dollars in operations funding will push the fiscal cliff further down the line, with the intention to revisit a sustainable, multi-year funding solution starting in the fall,” the coalition stated. “However, many transit agencies are still facing an imminent funding shortage which has been projected to yield catastrophic service cuts and fare increases. The passage of this new funding should not distract from the very urgent need to have a dedicated funding source for transit agencies across the commonwealth. It’s time for the legislature to take this foundational part of our state's economy and mobility seriously.”

The Keystone Contractors Association (KCA) likewise saw the budget proposal as a missed opportunity.

“Pennsylvania is the only state that abides by such a costly, archaic procurement mandate known as the Separations act,” the KCA stated. “Enacted in 1913, this Act requires multiple prime contractors on each construction project, which leads to significant cost increases and project delays.”

The Chesapeake Bay Foundation (CBF) celebrated the $50 million in new annual funding for the Clean Streams Fund.

“We are thrilled that the governor and legislators have made increased and sustained investments in the new budget for family farms and cleaner rivers and streams,” said Julia Krall, Pennsylvania executive director for CBF. “It is a watershed moment like no other for Pennsylvania.”

The Pennsylvania Food Merchants Association (PFMA) advocates the views of the Commonwealth’s food and beverage industries. It issued a statement concerningthe inclusion of $2.72 million in funding to support the operations of the state Attorney General's new Organized Retail Theft Task Force.

"We are thrilled that Gov. Shapiro and the General Assembly have committed this funding to tackle the immense problem of organized retail theft in Pennsylvania," said Alex Baloga, president and CEO of PFMA. "This significant investment underscores a strong commitment to safeguarding our communities and supporting the retail industry."

Senate Republicans said the 2024-25 state budget is “honest with taxpayers, creates new job opportunities for state residents, includes no new taxes and addresses the economic and demographic challenges the state faces in the years ahead.”

Senate President Pro Tempore Kim Ward, R-Westmoreland, Majority Leader Joe Pittman, R- Armstrong/Indiana/Jefferson/Westmoreland? and Appropriations Committee Chair Scott Martin, R-Lancaster, noted that the $47.59 billion spending plan is $740 million less than the proposal Shapiro presented in February and allocates $740 million to the state’s Rainy Day Fund a priority for Senate Republicans to avoid tax hikes or service cuts in future years.

“I am thankful we reached a budget agreement that recognizes the need to address Pennsylvania’s economic and demographic challenges in the years ahead,” said Martin. “In addition to making our state more competitive for job growth, the budget’s Grow PA plan will help young people train for high-demand careers while taking on less debt and providing a strong incentive for them to put down roots here in our commonwealth. I’m also extremely proud that we fought to empower students and families so children can learn in the environment that best suits their unique educational needs.”

Sen. Kristin Phillips-Hill, R-York, was pleased that the budget included major regulatory reform efforts she championed. Included in this is an overhaul of the permitting process for land, air and water-related permits required by the Department of Environmental Protection and county conservation districts for development.

“By cutting through the red tape, we're not only supporting our current businesses and communities, but also laying the groundwork for future growth and prosperity in Pennsylvania,” said Phillips-Hill. “Growing our economy, creating new jobs, and putting Pennsylvania on a path to prosperity is not partisan, it’s commonsense. I am glad we were able to get this across the finish line.”

House Republicans were critical of the budget. Rep. Wendy Fink, R-Red Lion stated that it “puts an additional and unnecessary financial burden on the residents of District 94. When the state continues to spend more than it has, we set everyone up for massive tax increases in the very near future. This budget will see the state’s reserves and Rainy Day Fund depleted in two years.”

Fink and the York County Republican delegation to the House, consisting of House Appropriations Chairman Seth Grove, R-Dover, and Reps. Kate Klunk, R-Hanover; Mike Jones, R-York Township; Joe D’Orsie, R-Manchester; and Dawn Keefer, R-Dillsburg issued a joint statement calling the budget “reckless” and remarking that it “racks up nearly $2.7 billion in new spending, a 6% increase over last year.”

Rep. Sheryl M. Delozier, R-Cumberland, also voted against the bill, citing that it spends $3.3 billion more than it takes in, depleting our state’s Rainy Day Fund, reserve, and surplus funds, and will lead to tax increases for her constituents in the 88 th ?Legislative District in two years.

“I support the increase in funding for pre-K and special education, basic education K-12, and higher education that invests in our students,” Delozier said. “My overall concern is when my constituents are working to stretch their paychecks to pay bills, medical expenses and taxes, we in Harrisburg need to be cognizant of how we spend the dollars they send here and not start programs the revenue generators can’t pay for in the future.”

According to the governor’s office, the budget will give Pennsylvania a $10.6 billion surplus by June 30, 2025, while seeking to achieve the following:

• Delivering on K-12 education and ensuring students can chart their own course.

• Spurring economic growth and development.

• Continuing Pennsylvania’s legacy as a national leader in agriculture.

• Supporting the state’s workforce and opening doors of economic freedom.

• Delivering a new vision for higher education grounded in access and affordability.

• Supporting the intellectual disability and autism community and direct support professionals.

• Backing law enforcement and creating safer communities.

• Supporting Pa. law enforcement.

• Creating the Office of Gun Violence Prevention.

• Investing in Public Transit and Infrastructure.

• Protecting health care and delivering for seniors.

• Helping seniors age with dignity.

• Increasing access to menstrual hygiene products in schools.

• Combatting maternal mortality.

• Investing in affordable housing.

• Supporting Commonsense Investments in Environmental Innovation and Monitoring.

Lieutenant Governor Austin Davis believes the budget will deliver “real results” for Pennsylvania.

“We’re making big investments in public safety, including resources to staff up a statewide office of gun violence prevention, the state’s first-ever funding for afterschool and out-of-school time programming and more resources for violence intervention and prevention programs that are working,” Davis said. “We’re also making smart investments to revitalize our communities’ Main Streets and downtown business districts and to prepare more shovel-ready sites for companies that want to expand or relocate to the commonwealth.”

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