HARRISBURG, Pa. — Governor Josh Shapiro of Pennsylvania is set to present his third budget proposal to the state’s lawmakers next week. This upcoming plan is anticipated to significantly increase funding for the state’s most underprivileged public schools, maintain a focus on fiscal responsibility, and address contentious issues such as public transit funding and the potential legalization of marijuana.
The budget proposal, scheduled for unveiling this Tuesday, will also likely include financial support for rural hospitals, enhanced wages for caregivers of the elderly and disabled, and the introduction of taxes on skill games that compete with casinos and lottery revenues. This budget comes at a time when Pennsylvania boasts a large financial surplus, with reserves projected to reach $10.5 billion by the end of the fiscal year on June 30. However, the state is also confronted with escalating budget deficits, a sluggish economy, an increasing elderly population requiring care, and various cost pressures within human services. Passage of the budget will require endorsements from the Democratic-led House of Representatives and the Republican-majority Senate.
Among the key areas to watch within the proposal are spending priorities. The current fiscal year has already seen a $47.6 billion budget approved, marking a 6% increase over the previous year’s budget, while simultaneously keeping sales and income tax rates stable. Noteworthy investments have been directed towards public schools, nursing homes, and programs for individuals with intellectual disabilities. Critics within the Republican party have warned that using approximately $3 billion from the surplus to balance this budget might lead to the depletion of state reserves in the coming years, raising concerns about sustainability. The state is projected to generate around $46 billion in taxes this fiscal year, likely falling short of Shapiro’s anticipated spending plan. Lawmakers expect Shapiro’s new budget to prioritize cost-saving measures and utilize any unspent funds in program accounts to help counterbalance increased spending elsewhere.
Public education is anticipated to be a top focus again. Shapiro is facing mounting pressure from educational advocacy groups and Democratic lawmakers to allocate billions more for schools. A recent court ruling deemed Pennsylvania’s current public school funding system unconstitutional, particularly affecting the poorest districts. Attorneys for the schools involved in the lawsuit are requesting a $1 billion increase in “adequacy” funding, along with an additional $325 million earmarked for instruction and special education, which represents an almost 13% increase to keep pace with rising operational costs.
In terms of public transit, Shapiro remains committed to preventing service reductions by the Southeastern Pennsylvania Transportation Authority, which continues to struggle with ridership numbers post-pandemic. Republican lawmakers desire to pair additional transit funds with highway project investments within their jurisdictions. Last year, Shapiro had proposed a tax of $150 million on skill games proliferating in various establishments throughout the state, which lawmakers are again considering as a probable funding source.
When it comes to human services, organizations focused on providing in-home care for seniors and individuals with disabilities are advocating for raises in Medicaid reimbursement rates. Many advocates express concerns about the declining wages for direct care workers, leading to hiring difficulties which impact service availability. The Pennsylvania Homecare Association is seeking approximately $500 million in increased rates, representing about a 7% rise, to combat the state’s comparatively low reimbursement levels. Nursing home operators are requesting a minimum of $139 million more, about a 7% increase, to maintain operational capacity. Additionally, they are asking for a $20 million boost, which equates to a 10% increase, for day programs assisting the elderly in accessing medical, nutritional, and rehabilitative services.
The rising costs of staffing have resulted in some nursing homes shutting down beds, creating a backlog in emergency rooms due to insufficient facilities available for rehabilitation and nursing care. Counties across Pennsylvania are also vying for an additional $100 million to improve mental health services, which represents a 33% increase, as they warn that the social services and criminal justice systems are nearing a crisis point. Meanwhile, Shapiro has conveyed intentions to propose increased funding to enhance healthcare services in rural areas.
In the energy sector, Shapiro is advocating for expedited permits for large power plant constructions and plans to offer substantial tax incentives as the state grapples with an energy crisis that threatens to increase electricity costs for residents.
As for the legalization of marijuana, Senator Sharif Street believes that legislative efforts to legally permit marijuana could come to fruition by July 1, despite challenges in securing sufficient support from Senate Republicans. Shapiro has expressed his support for such measures.
In matters of violence prevention, the anti-gun violence organization CeaseFirePA reported significant reductions in gun violence, noting a 42% drop in victims and a 38% decrease in fatalities since 2022. They are urging lawmakers to reinforce the $56.5 million previously budgeted for violence prevention initiatives.
