Gov. Josh Shapiro’s second budget proposes significant increases to education and economic development and would regulate adult use marijuana, while leaning heavily on Pennsylvania’s flush reserves to underwrite his vision.
The Democrat on Tuesday unveiled his budget for the 2024-25 fiscal year, which begins on July 1, in front of a joint session of the House and Senate in the ornate Capitol Rotunda.
Referring to his inaugural spending plan as a “down payment” on his vision for Pennsylvania, Shapiro called on lawmakers to enact his projected $48.3 billion budget to inject more cash into underfunded public schools and attract major industrial and high-tech projects to invigorate a slow-growing economy.
“I know that’s a bold vision, and some will reflexively be opposed, saying, ‘We can’t afford that,’” Shapiro said. “But I would argue we can’t afford not to invest right now.”
He said it taps into his “competitive spirit,” and acknowledged his proposal is ambitious.
In the wake of a court ruling that last year determined the state needed to better fund its public schools, Shapiro wants a $1.1 billion, or 14%, increase to public schools. A significant portion of that would go toward helping poorer schools, a proposal which drew enthusiasm from education advocates.
The budget does not call for a tax increase, or require one for at least five years, Shapiro said. Instead, about $3 billion in reserve cash would be used to balance the budget, with tax collections projected to increase by $1 billion, or 2.2%. Shapiro’s spending request would increase total authorized spending by 7% through the state’s main bank account.
The proposal would hold the line on taxes on income and sales, the state’s two largest sources of income, while public schools, higher education, public transit and human services would absorb much of the increase in spending. The proposal would shrink the state’s cash reserve from $14 billion to $11 billion.
With a nod to his burgeoning catchphrase, Shapiro called on lawmakers to “get more stuff done.” Acknowledging the divided Legislature, with Republicans controlling the Senate and Democrats the House, Shapiro made his plea for bipartisan cooperation.
As a new revenue stream, Shapiro wants to legalize adult-use marijuana, following the example of Pennsylvania’s neighbors, including Ohio, New Jersey and New York. He called for expunging records of those incarcerated for marijuana, and using $5 million of proceeds for restorative justice. Shapiro’s administration estimates the industry would eventually yield $250 million in additional annual revenue.
For public schools, of the $1.1 billion increase, about $872 million would go toward helping the state’s poorest districts provide a better education for its students.
Shapiro also called for more funds for student teacher stipends, mental health, special education and school construction, and tighter limits on charter school reimbursements. He is also requesting funds to place menstrual hygiene products in schools.
“If you combine those savings with the new money I’m proposing for our 500 school districts, that would mean nearly 2 billion dollars more for our public schools next year,” he said to applause. “This is ambitious. None of this is easy and all of it will require us to work together.”
Pennsylvania lags nearly every other state in funding higher education. To bolster students continuing through post-secondary, Shapiro’s budget allots an extra $200 million, or 10%, more for the state’s higher education institutions. The extra funds and a revised state-owned higher education system seeks to raise Pennsylvania from being one of the worst states in college affordability and state funding.
Beyond the continued push for a $15 minimum wage and the additional revenue stream of recreational marijuana, Shapiro wants legislators to fund economic development projects to attract major industrial and high-tech businesses to cultivate a more dynamic workforce. He proposes borrowing $500 million to go toward site development, to better entice industrial and tech businesses to choose Pennsylvania over other states.
“We need to build a more competitive Pennsylvania that starts in our classrooms, runs through our union halls and our small businesses, through our farmlands and our high rises, our college campuses, and leads to a life of opportunity and a retirement with dignity,” Shapiro said.
Shapiro’s proposal would boost spending on home and community services for the intellectually disabled and autistic by about $200 million, or 12% more. That’s about half the amount that advocates say is needed to fix a system beset by staffing shortages and long waiting lists.
Another significant investment would go to public transportation, increasing the state share by $283 million, or about 2%. A bit under half of that would go to Philadelphia’s primary public transit authority, the Southeastern Pennsylvania Transportation Authority, commonly known as SEPTA.
Under Shapiro’s proposal, about $31 million more would flow to help Pennsylvania State Police maintain and update its fleet of vehicles and aircrafts. The funding comes after a high-profile prison escapee eluded officers.
Specifically targeting gun violence, an additional $1.5 million would increase staffing of state troopers and civilians by auditing gun retailers and monitoring social media for threats.
To curb youth-based gun violence, Shapiro wants about $23 million to increase after-school programming for adolescents, and to dedicate resources to cleaning up shared spaces like parks and recreation areas that are most affected by gun violence.
Smaller line items target housing needs — like $50 million for home repair subsidies, and $10 million for the next four years to rehab properties and build new homes and apartments. Funds would also be allocated for those facing eviction to have legal counsel.