HARRISBURG, Pa. — Next week, Pennsylvania Governor Josh Shapiro will present his third budget proposal to the state legislature, focusing on increasing funding for the most underprivileged public schools while also tackling sensitive issues such as public transit funding and marijuana legalization. The budget expected to be revealed on Tuesday is reported to aim for significant financial support for rural healthcare facilities, raise wages for caregivers of the elderly and disabled, and impose taxes on skill games thought to compete with traditional gambling outlets.
This budget proposal comes at a time when Pennsylvania is enjoying a substantial financial surplus, projected to reach approximately $10.5 billion as the fiscal year concludes on June 30. However, despite the surplus, the state confronts formidable challenges, including widening deficits, sluggish economic growth, and a rapidly aging population that incurs considerable care costs. These issues compound alongside rising expenditures associated with various human services programs.
For the proposal to be implemented, it will need to gain the endorsement of Pennsylvania’s Democratic-majority House of Representatives as well as the Republican-controlled Senate.
**Spending**
In the current fiscal year, lawmakers passed a budget of $47.6 billion, which was a 6% increase compared to the previous year’s financial plan. Funding was increased significantly for public schools, long-term care facilities, and services for individuals with intellectual disabilities. However, this increase relied heavily on around $3 billion from surplus funds, prompting Republican legislators to caution against unsustainable spending that risks depleting the surplus in the coming years.
Projected tax revenue for this fiscal year is expected to be around $46 billion, suggesting that Shapiro’s proposed spending may exceed available revenues. Legislative members anticipate that the forthcoming budget will prioritize cost reductions and the use of unspent funds in programs to balance increases in other areas.
**Public Schools**
Another significant area of focus in Shapiro’s proposed budget will likely be public education. With mounting pressure from education advocates and Democratic lawmakers, the governor is urged to secure billions more in funding for underprivileged schools. This push follows a recent court ruling that declared Pennsylvania’s public school funding system as unconstitutional for failing to meet the needs of students in impoverished districts. Legal representatives for the plaintiffs are requesting an increase of $1 billion to ensure adequate funding and an additional $325 million for instructional and special education to help manage escalating costs across all districts.
**Public Transit**
Governor Shapiro has consistently pushed for measures to prevent budget cuts to the Southeastern Pennsylvania Transportation Authority, which serves the Philadelphia area and has yet to recover from ridership losses incurred during the pandemic. Republican lawmakers have called for new revenue sources while advocating for a combined funding approach that allocates additional funds to road projects in their constituencies alongside transit support. Last year, the governor proposed introducing a $150 million tax aimed at skill games popular in various venues across the state; legislators are revisiting this as a potential revenue generation mechanism.
**Human Services**
Non-profit organizations that offer home care services for seniors and individuals with disabilities are requesting increases in Medicaid reimbursement rates to better compensate direct care workers, whose pay has not kept pace with rising costs. Mia Haney from the Pennsylvania Homecare Association noted the challenges in recruiting staff, leading to diminished service availability. The association is seeking a $550 million increase, equating to approximately 22%, to enhance reimbursement rates, as Pennsylvania currently ranks among the lowest in this regard compared to neighboring states.
Additionally, nursing homes are appealing for at least $139 million — a 7% increase — to maintain operational capacity, while day programs are requesting an increase of $20 million, around 10%, to provide older adults with crucial services. Nursing home operators have reported difficulties in keeping beds available due to staffing costs, contributing to an overflow in emergency rooms as a result of limited capacity for rehabilitation or nursing care.
Counties are also advocating for an additional $100 million to expand the mental health services they offer, seeking a 33% increase due to perceived imminent challenges in the social services and criminal justice frameworks. Governor Shapiro has mentioned plans to allocate more funding for rural healthcare as part of his budget.
**Energy Initiatives**
Amid an impending energy crisis that threatens to inflate electricity costs across Pennsylvania, Shapiro aims to expedite the development of significant power plants and propose numerous millions of dollars in tax incentives.
**Marijuana Legalization**
Senator Sharif Street from Philadelphia has expressed optimism about the possibility of advancing marijuana legalization legislation before July 1, though securing the support of Senate Republicans remains a hurdle. Shapiro has expressed favor for the legalization of marijuana.
**Violence Prevention Efforts**
According to CeaseFirePA, a group committed to anti-gun violence efforts, there has been a notable decline in gun-related incidents, reporting a 42% decrease in victims and a 38% drop in fatalities since 2022. The organization is urging lawmakers to reinforce their commitment to violence prevention funding, which currently stands at $56.5 million in this year’s budget.
This article has been amended to clarify that the Pennsylvania Homecare Association is seeking $550 million, as opposed to $500 million, with an increase percentage of 22%, not 7%.
