Shapiro unveils his first budget

Posted 3/14/23

HARRISBURG, PA — Gov. Josh Shapiro was the picture of temperance and careful, calculated spending as he unveiled his administration’s first budget proposal for Pennsylvania.

As he …

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Shapiro unveils his first budget


HARRISBURG, PA — Gov. Josh Shapiro was the picture of temperance and careful, calculated spending as he unveiled his administration’s first budget proposal for Pennsylvania.

As he spoke to a divided General Assembly last Tuesday about the spending proposal, he repeatedly called it a “commonsense” budget—painting his spending plan in more muted colors than those of his predecessor, Tom Wolf, whose budgets were usually described with more impassioned adjectives like, “bold” and “progressive” by his supporters, and “unsustainable” and “irresponsible” by his opponents.

“We’ve built our budget around a conservative revenue estimate—so conservative, in fact, that we’re using projections that are three billion dollars lower over the next five years than the Independent Fiscal Office—a notoriously cautious group of economic forecasters,” Shapiro told the General Assembly. “We’re prepared to weather a storm should it come.”

The $44.4 billion proposal calls for a 3.6 percent spending increase over the current fiscal year.

Flanked on either side by both houses’ leaders, Democratic House Speaker Joanna McClinton and Republican Senate Pro Tempore Kim Ward, Shapiro also pushed for bipartisanship and collaboration.

“It takes 102 House members, 26 senators, and one governor to accomplish anything. And as those numbers make clear, it requires a collective effort,” he said. “While we should hold firm to our individual values, that should not preclude us from opening up our minds and our hearts to one another to find common ground so that we can deliver the results the people of Pennsylvania deserve.”

Cutting taxes, expanding rebates

Thanks to pandemic-era federal funding and past investments, the state’s general fund surplus and its rainy day fund are more flush with cash than ever before in Pennsylvania’s history, the governor said. He wants to preserve those coffers while investing in “things we can all get on board with.”

With the hopes of appealing to both the Republican-controlled Senate and the just-barely Democrat-controlled House, Shapiro proposed raising the income threshold for a state property tax rent-rebate program for Pennsylvania seniors from $35,000 to $45,000 a year.

Increasing the cutoff figure takes inflation into account, the governor said, who added that PA has not updated its formula for the rebate program in 17 years. His proposal would also raise the maximum rebate for seniors from $650 to $1,000. Under these changes, he said about 175,000 more residents will qualify for the rebate, and many of the 400,000 seniors who already qualify will see their rebates “nearly double.”

In an effort to lessen the “mountain of rising prices” facing many Pennsylvania households, Shapiro also pitched eliminating the state’s cellphone tax, something his office says will save residents $124 million in taxes a year.


While the new governor emphasized saving and careful spending, he also has eyed some key pieces of the state’s economic infrastructure where he’d like to invest millions: a 50 percent bigger investment in the state’s Manufacturing Innovation Program, which connects universities and businesses to spur job creation; $20 million for a new state program that invests in historically disadvantaged businesses; $25 million in job retention and recruitment efforts; and an estimated $1.5 billion for road and bridge projects throughout the commonwealth.


Likely one of the hardest sells from Shapiro’s camp will be its investment in public education. The Commonwealth Court just recently ruled in a landmark trial that the way the state funds public education is unconstitutional, because it keeps less-wealthy districts at a disadvantage. The court, however, did not prescribe many specifics for how to improve it.

The governor, who as attorney general filed an amicus brief on the side of the underfunded school districts in the trial, called for investing $567 million in new basic education funding for public schools. His budget did not include any extra funding for the state’s Level Up program, which provides support to the 100 school districts most in need.

The proposed investment is only a drop in the bucket of what’s needed, advocates have said. They estimate that PA should invest $4.6 billion into public education to balance the disparities between wealthy and impoverished districts. And given no increase for Level Up, they called this year’s budget a “step backward.”

“This year’s proposed education budget does not do enough to meet the standard set by our state constitution and the urgency of this moment,” read a joint statement from the attorneys representing underfunded districts in the recent trial. “This year’s increases are only pegged to keeping school funding on pace with inflation… the moment calls for more.”

Ward, the Republican leader in the state Senate, meanwhile said she wanted to see “lifeline scholarships” included in the budget proposal, but “they weren’t there.”

A lifeline scholarship program, similar to a voucher program, provides state-funded scholarships to students in grades one through 12 in districts with the lowest state test scores. These scholarships could then be used by parents—among other uses—to place their students in a private school.

Though not included in the budget proposal, Shapiro did indicate during his gubernatorial campaign that he was open to funding such a program. Some advocates, meanwhile, pan such proposals as an “attack” on already underfunded schools.

“This bill is a truly terrible piece of education policy,” PA State Education president Rich Askey said in opposition to a lifeline scholarship bill in 2022. “It’s nothing less than a full attack on public education. It would take $144 million from school districts most in need of state resources and give it to parents to spend on private school tuition, fees, uniforms, tutoring, computers or all kinds of other educational expenses.”


Ward said that this year’s budget proposal was not as “ideological” as the ones she is used to seeing from the previous Wolf administration, but she and other Republican state senators promised “extensive work to be done” before the budget resembles anything they would vote yes on.

“The governor said a lot of things that we can all get on board with. We just need to figure out how we’re going to pay for those things,” Ward said in an address.

GOP House members gave a similarly measured response, calling Shapiro’s proposal “a good start.”

Democratic leaders, meanwhile, welcomed the budget proposal with more gusto.

“I’m excited to relay that the governor’s budget proposal is one that had all Pennsylvanians in mind,” Speaker McClinton said. “From our youngest neighbors to our wisest, I can say with confidence that this budget has the potential to work for all.”

With the initial proposal now laid out, four months of public hearings and closed-door meetings between the Shapiro administration, the Republican Senate and the Democratic House are to follow. The state’s leaders must try to iron out an agreement on spending by June 30.

To read Sen. Lisa Baker’s My View on the budget, click here.

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