Pennsylvania lawmakers passed a budget deal in a frenzy of votes Thursday, nearly two weeks into the new fiscal year, after being hampered by disagreements during closed-door negotiations over Democrats’ demand for increased public school funding.
The $47.6 billion budget for the fiscal year beginning July 1 is a 6% increase over last year’s approved spending, with the majority of the increased funds going to public schools and human services to improve pay for direct care workers. The proposal also allocates extra funds to make education more affordable in a state that is ranked among the poorest in the country in terms of affordability, as well as hundreds of millions to compete for large new projects such as multibillion-dollar microchip facilities.
Votes in the Republican-controlled Senate and Democratic-controlled House began within hours of rank-and-file members receiving their first glimpse at hundreds of pages of budget-related legislation, which became public on Thursday.
Democratic Gov. Josh Shapiro signed the major spending package late Thursday night, after it passed 122-80 in the House and 44-5 in the Senate. Republican opponents criticized it as a bloated and irresponsible budget that will increase debt and squander down surpluses in an aging state with projected year-over-year deficits.
House Appropriations Committee Chairman Jordan Harris, D-Philadelphia, stated that the budget shows a strong moral compass.
“This budget makes one of the most historic investments in what is our most valuable resources, and that is our children,” Mr. Harris said.
The plan does not raise sales or income tax rates, the state’s two main revenue sources, but it does provide tax cuts for businesses to deduct more losses and students to deduct loan interest.
It will take around $3 billion in surplus cash to balance, leaving $10.5 billion in reserve. Shapiro originally presented a $48.3 billion plan.
The measure increases public school instruction and special education funding by approximately $900 million, representing a 9% increase, as well as hundreds of millions more in additional subsidies for school construction and tuition to private and online charter schools.
A significant amount of the aid, approximately $526 million, is intended to be a first step in reacting to a court judgment that determined the state’s school finance structure violates the constitutional rights of pupils in poorer districts.
For weeks, Republicans and Democrats sparred behind closed doors about how to disperse the funds. Senate Majority Leader Joe Pittman, R-Indiana, described the education financing formula as “justifiable” and “accountable,” but one opponent, Sen. Lindsey Williams, D-Allegheny, claimed it was influenced by “political whims.”
In any case, the legislation falls far short of the $6.2 billion increase requested over five years by underfunded school districts who sued and prevailed in court. It is significantly less than the $870 million Democrats proposed as the first step toward a seven-year, $5.1 billion increase.
For higher education, the plan allocates an additional $260 million, or around 13% more, with the majority of the increase going to the state-owned university system and the Pennsylvania Higher Education Assistance Agency to boost student subsidies.
In recent months, Shapiro and Republican lawmakers have focused on making education more affordable. However, the plan does not raise funding to Temple University, the University of Pittsburgh, or Pennsylvania State University to cover in-state tuition.
On the human services front, Shapiro’s top goal, reducing a waiting list of thousands of families seeking assistance for an intellectually impaired adult member, would receive an additional $228 million, or 10% more, as the first stage in a multiyear strategy. That is roughly half of the amount advocates believe is required to repair a system plagued by worker shortages, low pay, and a thousands-long waiting list.
Nursing home operators will receive a 7% raise, totaling $120 million, despite warnings that inadequate Medicaid reimbursements are pushing an increasing number of places to close. Counties will receive a $20 million increase for mental health services, which falls far short of the $250 million they had requested for a system they deem crumbling and broken.
Meanwhile, Shapiro had requested an additional $280 million for public transit networks that are still trying to recover ridership following the pandemic. Instead, Republicans agreed to approximately $80 million WTAE stated.
In terms of economic development, Shapiro has pledged to compete with other states that are providing billions of dollars in subsidies to lure microchip fabrication plants, electric vehicle battery manufacturers, and other large projects. He recommended borrowing $500 million to prepare big areas of land. Lawmakers decided to borrow $500 million, with $100 million designated for road, water, and sewer extensions.