Overview of Pennsylvania’s New $47.6 Billion Budget
Josh Shapiro, the Governor of Pennsylvania, recently signed off on a $47.6 billion budget that ramps up public education spending, infuses new dollars into economic development, and introduces a one-time injection for transit systems and a new college scholarship program.
Education Front and Center
The discussion around this year’s budget was heavily directed towards education. In response to a state appellate court ruling that found Pennsylvania’s funding for public school districts to be constitutionally lacking, the final agreement boosts K-12 education funding by over $1 billion. This increased investment is principally aimed at the state’s poorest school districts. However, critics argue that more funding is still required.
Transit Systems Receive Critical Support
The question of increasing funding for public transit systems has been a late bone of contention in the budget talks. Across the nation, public transit authorities have warned of a looming financial catastrophe as federal stimulus dollars begin to dry up. This issue is especially critical for larger systems like Philadelphia’s SEPTA and Pittsburgh’s PRT, who have declared a potential need to cut services if they did not receive additional state funding.
The final budget now boosts transit agencies with a one-time injection of $80.5 million.
Boosting Site Development and Permitting Reforms
One major development in the budget is the addition of $500 million for grants or loans for developers or local government agencies to prepare sites for industrial or mixed-use projects. Another critical agreement reached by lawmakers is a streamlined process for businesses to apply for specific air, water, and land disturbance permits.
Enhancing Solar Energy in Schools and Introducing Electric Vehicle Fee
A significant highlight of the budget is the agreement to fund a grant program for schools, community colleges, and technical schools to finance solar energy projects alongside enforcing a new fee on electric vehicles to increase the revenue for road maintenance.
Despite some backlash from environmental advocates and legislators concerned that the bill may deter prospective electric vehicle consumers, the legislature unanimously approved the bill. Many lawmakers viewed the fee as an equitable compensation for utilizing the state’s roads.
Reforms in Higher Education Funding
Several alterations to Pennsylvania’s higher education system were also incorporated into the final deal, including a new scholarship program that grants students up to $5,000 per academic year for an “approved course of study” such as nursing or education, given that they stay and work in Pennsylvania post-graduation for 12 months per grant received.
Also, a new State Board of Higher Education was agreed upon, designed to develop strategic plans for the systems and recommend methods for schools to collaborate.
Tax Reductions and Credits
Following a compromise between lawmakers, the budget deal includes a higher percentage of annual operating losses that businesses can carry forward to reduce their tax liability. This increased deduction is expected to assist businesses traverse through their first few years. Plus, the deal provides employers tax credits if they aid employees in covering child care costs or matching an employee’s contribution to a state-run college savings plan.
Despite the budget agreement, there were specific exceptions: It does not cut personal income tax or allocate taxpayer money for private school vouchers as pushed by Senate Republicans. It also sidelines revenue-generating suggestions made by Governor Shapiro, such as legalizing recreational cannabis or regulating slot-like skill games.
Additionally, the budget plan emphasizes housing, an area that garnered much attention in Governor Shapiro’s address. Main highlights include an increase in realty transfer tax revenue for an affordable housing program, a $5 million boost in state homelessness aid, and $2.5 million to bolster legal protections for low-income tenants facing evictions.
