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HARRISBURG — Gov. Josh Shapiro on Tuesday pitched a $1.5 billion increase for public schools as part of an overall $51.4 billion state budget for the next fiscal year.
That total tab would be a $3.5 billion increase in spending over the current year and pull $1.6 billion from the state’s rainy day fund — leaving it with a balance of $6.4 billion.
In his nearly 90-minute speech, Shapiro touted the work his office has completed since his term began two years ago and repeatedly said, “Pennsylvania is on the rise.”
“We’ve moved the ball down the field and we put points on the board – and we should celebrate that,” Shapiro said. “But we should be hungry for more.”
Shapiro’s education spending proposal includes a $75 million boost for basic education, $40 million more for special education and another $526 million toward rectifying the funding disparity between high and low-income school districts.
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Speaking to the members of a divided General Assembly, Shapiro addressed the results of the November election, which saw the Republican Party hold the majority in the U.S. House, seize one in the U.S. Senate and win the White House.
“But despite all that change in D.C., the voters here in Pennsylvania returned a Republican-controlled Senate and a Democratic-controlled House – with the exact same margins,” Shapiro said.
“The good people of Pennsylvania looked at all we’ve accomplished together and spoke loud and clear through their votes and said, ‘Go do more of that,’” he added.
But Senate Republicans, speaking at a post-speech news conference, raised a red flag over Shapiro’s proposal to tap the state’s reserves, pointing to Independent Fiscal Office projections that the state will deplete its rainy day fund by the start of the 2027-28 fiscal year if it continues to spend as it has.
“When you talk about taking money out of rainy day fund, it’s only supposed to be done for emergency purposes,” said Sen. Scott Martin, a Martic Township Republican and chairman of the Appropriations Committee. “I mean, it’s clear-cut in law.”
Martin warned that draining those funds could cause a snowball effect on rating agencies’ outlook on Pennsylvania’s fiscal health, raising the cost of servicing new debt.
State Rep. Tom Jones of East Donegal said spending down the state’s reserves will leave lawmakers with “the hard question of cutting government services or raising taxes.”
“The logical approach would be to stop the overspending now and immediately begin to put Pennsylvania back on a responsible fiscal track,” Jones said.
Shapiro’s address kickstarts budget negotiations ahead of the end-of-June deadline, which lawmakers frequently overshoot. Both chambers will hold budget hearings over the next few months to review and shape Shapiro’s proposal.
Here are five key aspects of Shapiro’s pitch that residents of Lancaster County ought to know.
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K-12 education boost
Last year, Shapiro and House Democrats successfully negotiated a $1.1 billion increase in education funding. However, the final result lacked a multi-year commitment to increased funding sought by advocates.
Shapiro said the $1.5 billion boost in education funds he’s seeking next year would build off that investment, which resulted in a $9.5 million boost in state funds for the School District of Lancaster. Funding equity is a big issue statewide thanks to a Commonwealth Court ruling two years ago which ruled that the current system of funding schools with property taxes was unconstitutional.
His new proposal would also boost funding for Career and Technical Education by $5.5 million, and provide about $40 million in student-teacher stipends – an increase from last year by $20 million.
Though state Rep. Bryan Cutler of Drumore Township said he supports the funding for career technical training, he said “the many negatives” of the governor’s overall budget pitch “far outweigh the few positives we see in this proposal.”
To address a 7,500-person waitlist for adult literacy courses, Shapiro is seeking $6 million for adult literacy centers. Mountville resident Alexandra Lon, who completed an adult literacy course and received her GED certificate last year, attended Shapiro’s speech as a special guest.
Taxing pot, skill games
Mirroring his pitch last year, Shapiro wants the Legislature to legalize and tax recreational marijuana sales. If taxed at the proposed 20% rate, the administration estimates Pennsylvania could generate about $250 million annually in revenue.
Shapiro’s plan would also spend $10 million in restorative justice funding and expunge the records of those incarcerated on charges of only marijuana possession.
Lawmakers last year were also unsuccessful in regulating skill games, slot machine-like terminals often found in bars and convenience stores. At a 52% tax rate, the administration is predicting doing so this year could create about $8 billion in new revenue over the next five years.
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Housing repairs, development
Shapiro wants $50 million to create a new statewide fund to assist residents with repairs in aging homes. Such a program, the Whole Home Repairs program, already exists, but lawmakers have not funded the program again since its initial passage in 2022.
He’s also proposing an additional $10 million for the Pennsylvania Housing Affordability and Rehabilitation Enhancement Fund. The administration said the program has been used to start construction on 2,000 new homes and apartments and provide repairs to another 2,300 in the last two years.
Shapiro urged lawmakers to pass legislation that would seal eviction records for individuals who win their eviction cases in court. Lancaster City state Rep. Izzy Smith-Wade-El has proposed such a bill.
Saying he was “grateful” that Shapiro included this measure in his speech, Smith-Wade-El said, “Eviction records are one of the factors contributing to the housing crisis in America. … I don’t think any of us truly believe one mistake ought to follow someone around forever and ruin their chance at a stable life in a good community.”
Shapiro’s office said the housing recommendations are based on feedback received from developers, labor leaders, nonprofits and local governments following the governor’s executive order last year to create a Housing Action Plan.
Innovating in agriculture
Shapiro is looking to add $13 million to expand the Agricultural Innovation Fund his administration first launched as part of this year’s state budget. He and Secretary of Agriculture Russell Redding visited Brubaker Farms in East Donegal Township on Monday to announce the first round of grant winners.
Statewide, projects funded in the first year include technologies to generate energy while reducing nutrient waste and support crops that store carbon or replace non-renewable resources.
Shapiro also is seeking another $2 million for a low-income food assistance program, called the State Food Purchase Program, and $4 million for the Pennsylvania Agricultural Surplus System.
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Hospitals and health care
Lancaster County could benefit from a $20 million statewide increase to offset the costs of providing behavioral health services. And Shapiro urged lawmakers to codify the Affordable Care Act into state law in anticipation of possible threats to funding at the federal level.
To address rural health care worker shortages, Shapiro called for $5 million more to educate, train and recruit nursing professionals.
”}]] Gov. Josh Shapiro on Tuesday pitched a $1.5 billion increase for public schools as part of an overall $51.4 billion state budget for the next fiscal year. Read More
