Deal Done: Shapiro Signs State Budget for $47.6 Billion

Mission completed successfully.

Yes, It’s Been 10 Days, But the General Assembly Has Delivered a $47.6 Billion Budget to Pennsylvania’s Desk Governor Josh Shapiro who signed the bill into law on Thursday evening.

“From day one in office, I have focused on getting things done for the good people of Pennsylvania, solving the most pressing issues we face, and bringing people together in a bipartisan way to achieve results — and I am proud to sign this budget into law that makes historic investments in education and economic development, while continuing to invest in public safety and violence prevention, all while cutting costs and lowering taxes,” Shapiro said.

“Pennsylvania is the only state in the country with a divided legislature — and I am proud that we have come together with leaders from both houses and both parties to show that together we can do a lot to improve the lives of Pennsylvanians.”

The $47.6 billion plan represents a 6% enhance in spending over the FY24 budget. Most of the additional funding is earmarked for public schools and social services.

The main bill on spending passed by the state House of Representatives 122-80and Senate, 44-5.

“This budget delivers on many Democratic priorities,” House Speaker said Joanna McClinton (D-Delaware/Philadelphia) “It benefits our students by putting in a solid down payment to address funding inequity and create opportunities for students of all ages. It benefits our communities by investing in proven public safety initiatives and providing tools to law enforcement to keep our streets safe. And it benefits working families by helping them stay home, afford child care, and access the health care they need.”

“On behalf of the Pennsylvania business community, the Pennsylvania Chamber thanks the General Assembly and Governor Shapiro for passing a budget that takes important steps to make Pennsylvania more competitive,” said Chamber President and CEO Lukasz Bernstein“This budget includes several key legislative priorities that the PA Chamber has long supported, including eliminating Pennsylvania’s startup tax by raising the net operating loss limit, modernizing our permitting processes, and promoting workforce initiatives. This legislation will help attract new economic opportunities, expedite project approvals so businesses can grow and create jobs, help employers address workforce challenges, and equip Pennsylvanians with the skills they need for the future.”

As Shapiro has repeatedly noted, he is the only governor in the country with a divided legislature, noting that not everyone will get what they want in this budget.

For example, his proposals to legalize marijuana for adult recreational employ and to regulate and tax games of skill were not passed.

“I’m disappointed that we haven’t been able to do anything for the kids trapped in the failing schools. … I want to come back at some point and fight for this program that the governor said he supported, but this time he had no interest in continuing,” the interim Senate president said Kim Ward (R-Westmoreland).

Representative Seth Grove (R-York), the ranking Republican on the House Appropriations Committee, spoke about the state’s shrinking budget surplus and urged his faction and others to reject the plan.

“What does he get for it? Has state government changed that much? Are voters saying, ‘Thank you for spending more money?’ Does it really improve government services? I don’t get those calls, and I doubt this budget will make a difference,” Grove said.

“The surplus will be gone next year, and this body will be looking for billions of dollars in new revenue. So, Pennsylvanians, the IRS is coming for your wallets. You can guarantee it.”

Chairman of the House of Representatives Appropriations Committee Jordan Harris (D-Philadelphia) said the budget reflects a powerful moral compass.

“This budget represents one of the most important investments we will make in our most precious resource: our children,” Harris said.

The budget does not include any increases in sales or income tax rates, the state’s two main sources of revenue, though the package does include tax cuts for businesses, which will be able to deduct more losses, and for students, who will be able to deduct interest on loans.

That would require about $3 billion in excess cash to offset, leaving about $10.5 billion in reserve. Shapiro had initially proposed a $48.3 billion plan.

Public education advocates have asked that Pennsylvania allocate $850 million in fresh K-12 funding this year, on top of the $7.9 billion the state already spends, to comply with a Commonwealth Court order. Instead, only $500 million of the $1 billion in fresh education funding will go toward that goal.

“Despite the commendable efforts of public education advocates in both chambers, the final funding package falls far short of what the House approved last month and lacks a multi-year adequacy plan to ensure that our most vulnerable children are used as bargaining chips in every budget season unless there is a change in Senate leadership,” said the president of the Philadelphia Federation of Teachers. Arthur Steinberg.

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