HARRISBURG, Pa. — Gov. Josh Shapiro on Tuesday announced a second plan with a firmer grasp on how he wants to pursue some of his top priorities, a relatively strong fiscal situation and lessons learned from the past year. The next budget proposal will be submitted to Pennsylvania lawmakers. This year’s ugly budget battle.
Most details of the Democratic governor’s budget proposal for the 2024-25 fiscal year, which begins July 1, remain secret. But Mr. Shapiro said he would seek more funding for higher education, public transportation and potentially underfunded public schools.
He also wants to spend more money on attracting major companies and appears ready to reconsider a controversial item that sparked a protracted budget battle last year: the creation of a new private school voucher program. is.
Mr. Shapiro’s first budget proposal disappointed many allies who felt it was not bold enough. This year, he returns with a bigger proposal based on recommendations from the task force and appointees.
Shapiro also faces a number of cost pressures, from indigent care to county-run mental health services.
Another difference this year is that Mr. Shapiro is scheduled to deliver his budget speech during a joint session of the House and Senate in the Capitol Rotunda. Governors historically speak on the House floor, but a year ago workers erected scaffolding there to repair damage from a water leak.
Whatever Mr. Shapiro proposes would need to be passed by the Democratic-controlled House and Republican-controlled Senate. Appropriations Committee hearings begin February 20th.
Here’s a look at Tuesday’s highlights:
budget basics
Mr. Shapiro will almost certainly propose an operating budget that exceeds the $45 billion in the plan approved this year.
Part of the reason is that the pandemic-era supplemental federal Medicaid aid, worth about $1 billion a year, is ending and Shapiro has said he wants to put more money toward several priorities.
That includes about $300 million more for public transportation, an increase of about 25%, and an undisclosed but significant increase for state universities.
Mr. Shapiro also wants to spend significant amounts of money to permit and prepare large tracts of land for construction and attract large-scale industrial facilities, such as microchip factories.
“If you want to compete domestically and internationally, you need investment,” Shapiro said last month.
Shapiro also wants to more fully address last year’s court ruling that found Pennsylvania’s public school funding system violates the constitutional rights of students in poor districts. The pressure is on.
Mr. Shapiro’s appointees last month endorsed a nonbinding recommendation to send an additional $1.3 billion to public schools next year, including grants for high-tax districts and school construction. He did not say whether his own budget proposal would reflect that recommendation.
financial situation
Tax collections are meeting expectations, and Mr. Shapiro has a strong financial cushion for now.
The state will have $13 billion in cash in the fiscal year ending June 30, thanks to federal COVID-19 aid over the past four years and tax collections that have filled the state coffers, fueling inflation. We expect to be able to hold it.
Meanwhile, Pennsylvania’s credit rating upgrade in November comes after six downgrades, including two by each of the three major rating agencies, between 2012 and 2017 while it grapples with persistent post-recession budget deficits. This was the first time since I had done so.
Still, Pennsylvania is running a deficit again, using $1 billion in extra cash to support spending this year.
The state also suffers from low economic growth, a shrinking working-age population, and challenging demographic trends with a rapidly growing retirement-age population due to lower tax payments and increased care costs.
Shapiro’s priorities
Mr. Shapiro has compiled a list of items he considers unfinished business.
These include raising the minimum wage to $15 an hour, which was blocked by Senate Republicans, and creating a new $100 million private school voucher program, which House Democrats blocked.
Voucher programs are particularly radioactive for Democrats, and Shapiro’s support for the program sets him apart from other Democratic governors across the country.
Like 19 other states, Pennsylvania’s minimum wage is the federal minimum wage of $7.25.
tax
Mr. Shapiro said he would propose a tax cut budget, but did not provide details.
Shapiro and lawmakers in December approved raising monthly phone charges from $1.65 to $1.95 to raise an additional $60 million for the county’s 911 emergency response service.
Other cost pressures
School boards say they pay too much money to charter schools, and Democratic lawmakers are calling for the reinstatement of a dormant grant program for school construction projects.
Meanwhile, providers of services for people with intellectual disabilities and autism say the system is underfunded and understaffed.
Counties say their safety-net mental health services urgently need more funding to create more beds and more counselors for people in need on-call.
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