| Newly elected Governor Josh Shapiro presented his first budget proposal to a joint session of the General Assembly on Tuesday, March 7th, as required under the Pennsylvania Constitution. The speech marked several historic milestones in the General Assembly. It was the first time an African American presided over a legislative joint session, as Austin Davis, of nearby McKeesport, is the first African American to hold the position of Lieutenant Governor.
Fueled by larger-than-anticipated state revenues, as well as continued federal financial support from the COVID-19 public health emergency, our current year is expected to run a substantial budget surplus. For his first term as Governor, Shapiro’s proposal will leverage Pennsylvania’s continued economic recovery to bring new investments in education, broaden our economic progress, and keep financial promises to seniors, students, and workers – without raising broad base taxes. In fact, the budget proposal reduces the state’s corporate tax rate.
While my analysis of his proposal has only just begun, here are some key aspects from his presentation:
- Reduces the state corporate tax rate from 9.99% to 8.99%.
- Provides almost $570 million in basic state funding for general K-12 education (a 7% increase) as well as a 7.8% increase in special education funding. Additional funds would also expand who is eligible for free school meals.
- Envisions legalization of adult-use marijuana with tax revenue for the state starting at almost $16 million for the 2024/25 fiscal year and increasing to almost $190 million in the 2027/28 fiscal year.
- Expands eligibility for the Property Tax/Rent Rebate Program for older Pennsylvanians from the current $36,000 to $45,000 – and would index eligibility thresholds to inflation.
- Increases the minimum wage to $15 an hour, up from the current $7.25 an hour.
- Invests $20 million in county mental health services to expand the ability of counties to provide services to schools as well as their communities.
- Creates a first ever $10 million investment in public defenders for Pennsylvania, which is one of only two states that does not have state funding for public defenders.
The Governor’s proposal is just the beginning of a three-way negotiation between both chambers of the General Assembly and the Governor. There will be a lot to review and discuss in the upcoming months, but no doubt the strength of the state economy is continuing a strong economic rebound compared to recent years during the pandemic. The budget and all related code bills need to be completed by the end of the fiscal year, which is June 30.
If you missed the Governor’s budget address, you can read his full remarks here. Additionally, if you would like a more in-depth look at the proposal, the House Democratic Appropriations Committee has prepared a breakdown on the Governor’s numbers, where you can find the 2023/24 Executive Budget At-A-Glance and the more in-depth 2023/24 Executive Budget Briefing.
Already, the House Appropriations Committee has kicked off three weeks of budget hearings. Most, if not all, of these hearings will be available online and you can find more information about that at pahouse.com. You can also watch the hearings on PCN or attend them in person if you are visiting Harrisburg (contact my office if you need assistance). The complete hearing schedule is also available for your review by clicking here.
In addition, I recently sat down to hear from our new Lieutenant Governor, Austin Davis. You can listen to our conversation in the most recent episode of my podcast here.
If you need help or have questions about any state matter, please contact my office by emailing [email protected] or calling 412-343-3870.
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