Gov. Josh Shapiro went big in his second budget address on Tuesday, proposing a $48.3 billion spending plan for 2024-25 with major increases for education, social services and economic development.
“We need to get more stuff done together for Pennsylvanians,” the governor said in his remarks, alluding to his administration’s unofficial motto.
The proposed budget would increase spending by about 7% over 2023-24, and would use about $3 billion in reserves to do so. The state can afford it, Shapiro said: Its reserves total nearly $14 billion.
Budgets are supposed to be passed by June 30, although that deadline is often missed. That was the case for 2023-24; Shapiro did not sign the main budget bill until August, and the additional “code bills” that were needed to release millions of additional dollars were not finalized until December.
Responding to last year’s state Supreme Court ruling that Pennsylvania unconstitutionally underfunds public education, Shapiro proposed an additional $1.1 billion in funding, a 14% increase. Almost all of it would be allocated under the “adequacy formula” developed by the Basic Education Funding Commission, which benchmarked spending against school districts where students are meeting academic performance goals.
Additionally, Shapiro is proposing $50 million more for special education, $30 million more for Pre-K and $300 million for school infrastructure repairs, the first installment of a $1.5 billion investment over five years.
He also proposed setting a uniform statewide per-student funding rate for cyber charter schools, a measure he said would both increase fairness and save school districts $262 million.
On higher education, Shapiro is proposing unifying the State System of Higher Education — the network that includes Millersville University — with the community college system. They would get $975 million in new funding, a 15% increase, and students from households making median income or less would pay no more than $1,00 a semester in tuition and fees.
The four state-related universities — Pitt, Penn State, Temple and Lincoln — would receive a 5% funding increase. Going forward, all higher-education funding, from community college on up, would be allocated based on a “predictable, transparent, outcomes-based funding system.”
Shapiro cited the plight of a family from Lancaster County to make the case for boosting funding to community caregiving services. With an average wage of $12 an hour, it’s no wonder providers struggle with chronic staffing shortages, he said.
He proposed boosting funding for home and community-based care by a little over $200 million, or 12%, which he said would leverage roughly $266 million in federal funding.
On housing, he proposed $50 million in funding for Whole Home Repairs, a statewide program that funds emergency renovations for low- and moderate-income homeowners. It was initially funded with federal pandemic aid in 2022-23; Democrats had hoped to include $50 million for it in the 2023-24 budget, but that initiative fell short.
The governor’s budget includes increased funding for medical insurance and an increase in the minimum SNAP benefit. Lastly, he called for raising the minimum wage from $7.25 to $15 an hour. All of Pennsylvania’s neighbors have raised their minimums, he said.
“It’s a shanda!” he said — a Yiddish word meaning shame.
Saying that a lack of shovel-ready sites is keeping companies from building in Pennsylvania, Shapiro proposed a $500 million bond issue to fund site preparation, paid off with tax revenue from companies that are brought here.
He proposed “the first major new investment in public transit in more than a decade” — $1.5 billion over five years. A new “Main Street Matters” initiative would build on previous “Main Street” and “Elm Street” programs, and a regional “competitiveness challenge” would encourage regional economic planning.
Legalizing, regulating and taxing marijuana, he said, could both free up law enforcement resources and bring Pennsylvania $250 million a year in added revenue. Like the minimum wage, Pennsylvania lags its neighbors, he said: “It’s time to catch up.”
As Shapiro noted, Pennsylvania is the only state with a divided legislature. In the Senate, Republicans enjoy a comfortable majority. The House is currently split 101-101, but Democrats are expected to recover their majority following a special election next week in a Democratic-leaning district in suburban Philadelphia.
In a statement, Senate President Pro Tempore Kim Ward said Shapiro’s budget “reflects an undisciplined strategy that lacks accountability” and grants government “greater control over our lives and businesses.”
The Senate’s Appropriations Committee Chair, Scott Martin of Lancaster County, said the budget is a “single-year spending spree” that would “put us on a path toward higher taxes and service cuts.”
The Education Law Center and Public Interest Law Center, which represented the plaintiffs in the education fair funding lawsuit, both praised Shapiro’s education funding proposal for its alignment with the Basic Education Funding Commission’s findings.
Advocacy groups representing social services offered positive assessments. The Rehabilitation & Community Providers called the community and home-based care funding a “major step.” PA Health Access said it was “very pleased” to see attention paid to health care cost issues, as did the Pennsylvania Health Access Network.