“My budget is balanced,” Gov. Josh Shapiro told legislators confidently at the state Capitol during his budget address Tuesday. “It does not raise taxes – in fact, it cuts them.”
But Republicans say Shapiro’s budget is only balanced because he uses the state’s Rainy Day Fund to pay for his soaring spending.
Continuing on the theme of “getting stuff done,” Shapiro asked the legislature to pass his $48.3 billion spending plan.
“Now is the time to invest some of that $14 billion surplus squirreled away here in Harrisburg,” Shapiro said. “I don’t want to take any more from the people of Pennsylvania than we need to. Instead, I want to invest in them.” He promised to keep $11 billion in the Rainy Day Fund.
Senate Republicans point out Shapiro’s budget would send spending up by more than seven percent, putting Pennsylvania’s future finances in jeopardy.
“What this budget does…is actually accelerate a black hole we will be facing of debt next year,” said Sen. Scott Martin (R-Lancaster), chair of the Appropriations Committee. “If we were to go with this $48.3 billion spending proposal he has, it’s a 7.1 percent increase. We’ll be faced with a $3 billion budget hole in the ‘25-’26 budget…What you just heard is a governor who wants us to basically spend down everything.”
Finance Committee chair Sen. Scott Hutchinson agreed Shapiro’s budget desires won’t work. “It is an unsustainable spending plan that increases expenditures by using $3.2 billion of one-time money and also relies upon overly optimistic revenue projections,” said the Oil City Republican. “The governor’s plan would set us up for a train wreck in two short years.”
Shapiro’s top spending priority is an additional $1 billion for education.
“Nearly 900 million dollars of that will be sent to support our school children under a new adequacy formula so we can ensure every school has the appropriate level of resources they need to serve their students,” Shapiro said. “My budget increases special education funding by another $50 million…And it invests another $30 million in Pre-K programs to help recruit and retain the teachers who get our kids off to a great start.”
Shapiro’s education funding announcement was hailed by Delaware Valley Democrats like Rep. Joe Ciresi (D-Montgomery).
“It’s a strong plan for public education that will help our students, taxpayers, and communities,” Ciresi said. “These investments in education are a first step on a path to making sure every school has the resources it needs.”
Republicans don’t agree.
“We need to be realistic,” said Sen. Dave Argall (R-Schuylkill/Carbon/Luzerne), chair of the Senate Education Committee. “We cannot follow California and New York down the path of reckless spending…We don’t want to make the same mistake…The Senate and the House now need to determine which numbers are real and which numbers are phony.”
Mass transit also made Shapiro’s spending priority list.
“I am proposing the first major new investment in public transit in more than a decade,” the governor said to rousing applause from Democrats. “Under my plan, transit systems across Pennsylvania will receive $1.5 billion over the next five years.”
He also unveiled details for how the Southeastern Pennsylvania Transit Authority (SEPTA) would benefit from the spending. Shapiro said SEPTA planned to address cleanliness and safety in exchange for a huge influx of taxpayer dollars.
“My administration is now prepared to increase our investment in SEPTA by $161 million, bringing the total state funding to $1 billion,” he said. Bucks, Delaware, Chester, Montgomery, and Philadelphia Counties would kick in a total of $24 million.
“That’s a bailout and not a solution,” said Commonwealth Foundation Senior Vice President Nathan Benefield. He pointed out that transit agencies, particularly SEPTA, are losing riders even as spending explodes. “Shapiro tries to solve problems simply by throwing more taxpayer dollars at them.”
One topic Shapiro left out of his speech entirely: The Regional Greenhouse Gas Initiative (RGGI).
A Shapiro-appointed panel studying RGGI failed to endorse it as a solution to reduce carbon emissions. The Commonwealth Court also tossed Pennsylvania’s forced entry into the RGGI multi-state cap and trade program last fall. Shapiro has appealed the decision to the state Supreme Court, saying the Commonwealth Court erred in curbing executive power. That decision is pending.
But Shapiro did get out front on legalizing recreational marijuana use. “This budget recognizes that the time has come for Pennsylvania to legalize adult-use cannabis,” Shapiro said, claiming sales “will yield $250 million in additional revenue for the Commonwealth.”
In Shapiro’s budget address, he said climate change needed to be addressed. But, more importantly, Shapiro wanted to see investment “in our clean energy economy and the jobs it supports.” He noted there were climate change bills in the legislation but didn’t endorse any of them.
That gave the American Petroleum Institute Pennsylvania (API-PA) hope for the future of energy in the state.
“Pennsylvania-produced natural gas is playing a pivotal role in helping to drive our economy and create good jobs – including attracting billions of dollars of investment in hydrogen technology to the region,” said Executive Director Stephanie Catarino Wissman. “More can be done to unlock Pennsylvania’s full potential and help ensure our energy future. That means advancing comprehensive permitting reform and putting smart policies in place that support Pennsylvania energy and build-out of critical infrastructure.”
Overall, Republicans expressed dismay and skepticism at Shapiro’s spending surge.
“I cannot help but think this year’s budget proposal is much like a phishing scam,” said House Republican Leader Bryan Cutler (R-Lancaster). “It looks good, it draws you in, and it makes you believe it is something it is not… Our problems can be managed by new thinking. They do not need to be managed by the new and future tax increases and the fiscal irresponsibility that will result from this budget proposal.”
“This budget address was a missed opportunity [by Shapiro] to separate himself from the typical tax-and-spend approach that defined the prior administration,” summed up Benefield. “Instead, Shapiro embraced the same tired liberal strategies that have created crippling budget deficits.”