A major fight over education stands in the way of a budget deal in Pennsylvania

PA reflector is an independent, nonpartisan, nonprofit newsroom dedicated to investigative journalism and public service that holds government accountable and drives positive change in Pennsylvania. Sign up for our free newsletters.

HARRISBURG — The issue of how much money should be allocated to Pennsylvania’s public education system has emerged as a key obstacle to a budget agreement as lawmakers began a series of talks ahead of a June 30 deadline.

Split-term leaders say there are potential compromises on other key issues, including overhauling the state’s permitting process, lowering college costs and creating up-to-date tax credits.

But deciding how much money to spend on K-12 education remains a hurdle to closing a deal. Democrats who want to escalate spending point to decades of funding inequities between well-off and needy public school districts, while Republicans who want to contain costs warn of financial disaster if spending increases too quickly.

Lawmakers are facing a major overhaul of Pennsylvania’s basic education funding system, following a judge’s ruling last year that the status quo is unconstitutionally unfair. The commonwealth is also flush with cash, with $14 billion in reserves that are still growing this year.

” READ MORE: Mayor Cherelle Parker addressed her critics and lobbied for education funding during a visit to Harrisburg

Budget negotiations began in February when Gov. Josh Shapiro, a Democrat, made the decision His annual appearance to the Legislature. It called for $48.5 billion in spending, an 8% increase over last year, and proposed that most of the new money go to the state’s K-12 education system. That spending would be covered by $3 billion of the state’s $14 billion in cash reserves, Shapiro proposed.

The idea of ​​tapping the state’s cash reserves has raised alarm bells among legislative Republicans. As the measure enters its final stages, state Senate Republicans’ primary goal is to keep spending under control, Majority Leader Joe Pittman (R-Ind.) told reporters last week.

“We don’t have a set number in mind,” Pittman said last week. “What we’re focused on [is] “maintaining expectations, maintaining reasonable spending increases that allow us to make sure that taxpayers are protected.”

While some education issues, such as allocating more money for school construction, have bipartisan support, Pittman said his goal is to ensure the state does not exhaust its reserves in the next three years.

That puts the state Senate at odds with House Democrats, who have called for up-to-date education funding for years when they were in the minority and are now determined to utilize their narrow majority to win a victory on the issue. State Court Ruling 2023 the study found that Pennsylvania was underfunding public education in poorer neighborhoods, adding to their pressure.

Democratic lawmakers and the Shapiro administration wrote a report earlier this year, he proposed setting a baseline per-pupil spending amount that would increase based on factors such as poverty and English-language proficiency in the district.

The report estimated that it would cost $5.4 billion just to bring each district up to the new standard over the next seven years, plus an additional billion dollars in property tax abatements, school construction, teacher training and school mental health resources. among others.

AND Bill which would implement this plan and includes changes in the way districts reimburse online schools that could save counties millions of dollars passed the House of Representatives with bipartisan support earlier this month.

” READ MORE: Bye. The House has taken a step toward changing the school funding system and now must convince the Senate to sign off on it

Maintaining such spending would quickly drain Pennsylvania’s cash reserves. But the University of Pennsylvania report released last week showed that the benefits of increased education spending would outweigh the costs to taxpayers, by increasing graduation rates and leading to “improved individual earnings, health, economic productivity, and reduced crime and dependence on government.”

“We have always emphasized that Pennsylvania is paying an enormous price, and has been for literally decades, because it does not adequately fund public education,” House Majority Leader Matt Bradford (R-Montgomery) told Spotlight PA about the study.

Negotiations are ongoing behind closed doors, but people close to the company say that if legislators reach an agreement on the amount allocated for education, the remaining elements of the agreement should enter into force.

Lawmakers say there is room for compromise on lowering higher education costs, modernizing the state’s business licensing process and lowering taxes.

State Senate Republicans have introduced a package of bills that would provide scholarships to people who pursue certain in-demand career paths, such as… IT and nursingBradford added that he hopes to add elements of Shapiro’s higher education plan to find agreement.

“I think there is a consensus on the need to make college more affordable while retaining Pennsylvania students,” Bradford said.

Years of Republican efforts to change how regulators hand out permits could also bear fruit this year.

The state senate passed Bill last year, it would have required the agency to set internal schedules for each permit application. Under this bill, a permit would be automatically approved if the applicant did not receive a response within these deadlines.

” READ MORE: The fight over Pennsylvania school vouchers is back – and both sides have new strategies

Democrats and environmental groups have traditionally opposed such efforts, arguing that the practice could lead to more pollution and potentially endangering funding related to enforcing federal environmental laws. But Shapiro has tried to speed up the permitting process throughout his administration, and Bradford said last week that he was “listening” to the state Senate on his bills as talks progressed.

“We believe effective government is in the best interests of everyone,” Bradford said.

Finally, tax policy appears to be a potential bargaining chip. In response to Shapiro’s spending plan, state Senate Republicans voted $3 billion tax cut plan in May with the support of Democrats, arguing that Pennsylvania’s good financial situation should be a signal to cut taxes, not increase spending.

Their bill would slightly reduce the state’s flat income tax. The benefits plan would be small and focused on higher-income people, the liberal Pennsylvania Policy Center said in a brief. According to the group’s data, the richest 1% of taxpayers would save an average of $5,400 a year, while the poorest 20% would get back only about $20.

Last week, Pittman said the state Senate proposal was an attempt to “do something in the tax world to provide momentum in encouraging economic growth and investment” and that he welcomed the House Democrats’ counterproposal.

Bradford told Spotlight PA he was willing to consider tax cuts as part of a budget deal. He also argued that the best way to get money into the pockets of working people would be a state version income tax relief obtaineda federal program that provides people with tax breaks below a certain income level.

AND Bill that would create such a program passed the House of Representatives last year but lingered in the Senate.

The deadline for concluding the transaction is Sunday. Both houses have voting sessions scheduled throughout the weekend, which are likely to be filled with closed-door negotiations, noisy public rallies and late-night votes.

The rates for missing a deadline are initially low. While a timely budget has symbolic value for lawmakers in the middle of a crucial election year, a delay of a few days or even a week is not a big problem for government operations.

The state is required by law to pay its employees, cover debt repayments and continue many other important government functions even without a budget. But last year’s delayed budget — which was not approved until December — showed that within a few weekslack of funds may limit the activities of district authorities, libraries and other basic services supported by public money.

Pittman and Bradford say the ticking clock won’t force them to change their approach.

“We judge a product based on its content,” Bradford said.