Gov. Josh Shapiro will make his second budget address on Tuesday in the Capitol Rotunda.
While there is a new venue for the speech, as the House chamber is being repaired, some of the topics will be the same as the governor addresses members of the General Assembly beginning at 12:30 p.m.
Here are five things that we are watching for in the budget address.
Basic Education Funding
The Basic Education Funding Commission adopted a Democratic-backed report that addressed the Commonwealth Court decision in William Penn School District, et al. v. Pennsylvania Department of Education et al.
The adopted report suggests an adequacy gap – or the gap between rich and poor school districts – of $5.4 billion in K-12 funding, about $800 million less than that suggested by the plaintiffs in the school funding lawsuit. The report does say that the state is on the hook for 95 percent of that funding.
While the plaintiffs in the case are pleased with some aspects of the report, they acknowledge that more must be done to improve facilities and invest in pre-K education. Shapiro has hinted that he wants more to improve supports for teachers and students.
Ears will be trained, listening for hints that the governor will propose appropriations for a school voucher program that he has publicly supported, in opposition to his party’s position. These vouchers would allow public dollars to go to private schools via “lifeline scholarships.”
Republicans have noted that state support of public education in 2023-24 reached an all-time high of nearly $15.5 billion and has done little to close an achievement gap.
Higher Education Funding
Shapiro has already gone public with his three-point plan to make changes in higher education in the Commonwealth. Much of his blueprint is based on the work of the Higher Education Working Group – a group of higher education leaders from across Pennsylvania appointed by Shapiro to develop a series of recommendations for improving higher education in the Commonwealth.
Pennsylvania spends less on higher education than every other state except New Hampshire. The long-term erosion of state support in Pennsylvania has increased the financial burden on students and institutions, resulting in tuition hikes, cuts in services, and the need to take on more debt, the governor’s office said.
His proposal calls for a new system of higher education that unites Pennsylvania State System of Higher Education (PASSHE) universities and the state’s fifteen community colleges under a new governance system, preserving local leadership while uniting both types of institutions behind the goal of educating Pennsylvania.
Shapiro also proposes that Pennsylvanians making up to the median income pay no more than $1,000 in tuition and fees per semester at state-owned universities and community colleges.
The third prong is direct appropriations to publicly funded colleges and universities be distributed on the basis of a predictable, transparent, outcomes-focused formula that will incentivize colleges and universities to focus on what’s most important to the Commonwealth. That prong would also affect the four state-related universities (Penn State, Pitt, Temple and Lincoln), allowing the quartet to work around an existing requirement that funding for the state-related schools be approved by a two-thirds vote of the General Assembly.
PASSHE chancellor Dan Greenstein is supportive of the plan, while Republican leaders are looking for more details in hopes that Pennsylvania can move toward a student-first, family-focused, and taxpayer-accountable system of higher education.
Funding for Public Transit
The governor has also announced his proposal to increase the share of the state’s costs for public transit throughout the Commonwealth, calling for Pennsylvania to shoulder nearly $1.5 billion over the next five years.
Shapiro hopes that the subsidy will spur economic growth, attract new business to the state, and prepare for upcoming major events in Pennsylvania, including America’s 250th birthday, the FIFA World Cup and the 2026 Major League Baseball All-Star game.
While the majority of the Commonwealth does not have public transit as part of its daily lives, Philadelphia’s SEPTA and Pittsburgh’s PRT are vital to the regional economy.
The plan would establish the largest increase in the state’s share of public transportation funding since 2013 legislation earmarked $450 million yearly from the Pennsylvania Turnpike.
Funding would come from an increase in the amount of the state’s sales tax revenue that is dedicated to transit.
Economic Development
The Shapiro Administration has also signaled its desire to make Pennsylvania a leader in innovation and economic development with the unveiling of a comprehensive plan to guide the Commonwealth’s economic growth.
The ten-year playbook sets five goals for the Commonwealth, including investing in economic growth and prioritizing economic development; making government work at the speed of business to provide an attractive environment; increasing opportunities and pathways for the workforce; improving innovation; and building flourishing regions throughout the state to meet the needs of businesses.
Resources will be focused in agriculture, energy, life sciences, manufacturing, and robotics and technology. $25 million will be earmarked for a Main Street Matters program to support small businesses and commercial corridors, while another $3.5 million will launch a new Pennsylvania Regional Challenge, which is designed to incentivize regional growth.
Republicans believe that the governor must reduce regulatory regulations that inhibit the ability to compete for business and jobs with other states.
Minimum Wage Increase
Since 2009, the state’s minimum wage has been stagnant at $7.25. That figure is the lowest allowed by the federal government. The contiguous states to Pennsylvania – New Jersey ($15), New York ($15), Maryland ($14), Delaware ($13.25), Ohio ($10.45) and West Virginia ($8.75) – all have a higher minimum wage than does the Keystone State.
A recent report from the Keystone Research Center entitled “Who Benefits? The Demographic Impact of a Minimum Wage Increase in Pennsylvania,” sheds light on the powerful benefits that increasing the minimum wage to $15 per hour by 2026 would deliver to workers across the state.
Shapiro made a call to increase the wage to $15 per hour in last year’s budget address but the figure did not make it into the final deal agreed to by the General Assembly.
Other Things to Watch
The governor is also expected to touch on other subjects, including a strategy for legalizing marijuana in Pennsylvania, as well as addressing questions about mental health services, Medicaid costs, the Regional Greenhouse Gas Initiative, election integrity and security, and the corporate net income tax rate.
Steve Ulrich is the managing editor of PoliticsPA.