One of the biggest challenges we faced in creating this year’s state budget was addressing Pennsylvania’s troubling economic and demographic trends. To put it in the simplest terms possible, not enough employers are choosing to expand and relocate here, and too many people are leaving Pennsylvania for education and job opportunities in other states.

Pennsylvania’s fastest-growing age demographic is adults aged 80 and above. Kindergarten enrollments continue to decline, with this year’s class being one of the smallest in decades. Our Commonwealth is one of just eight states that lost population from July 2022 to July 2023. And over the next 25 years, while the nation’s population is expected to grow by 20 percent, Pennsylvania’s rate of growth is projected to be just 1.6 percent. 

If we continue down the same path, there won’t be enough working-age Pennsylvanians to sustain the growing needs of our communities, and the impact on future generations would be catastrophic. 

To address these challenges, the recently approved state budget includes several key measures to reverse our population decline and send a powerful message that Pennsylvania is open for business. 

For years, employers have passed on Pennsylvania so they wouldn’t have to contend with an extremely unfriendly tax structure and permitting delays that often stretched months or even years.

In this year’s budget, we took major steps to address both these pervasive problems. 

We continued our plan to bring Pennsylvania’s job-killing Corporate Net Income Tax from one of the nation’s highest to one of the nation’s lowest by 2031. We also began the process of reforming Net Operating Loss deductions (commonly called the Start-Up Penalty) to bring our Tax Code in line with how the federal government and most other states operate, making Pennsylvania a more competitive environment in the process.

Several critical improvements to the state’s permitting process will also prevent a repeat of the infamous loss of a $1.5 billion U.S. Steel facility in 2021 and many other abandoned projects that resulted from egregious bureaucratic delays.

To help prevent the loss of similar projects, we created the Streamlining Permits for Economic Expansion and Development (SPEED) Program to establish permit review timelines by DEP and conservation districts. We also created a permit tracking system and added the option for third-party review of air, earth disturbance and water permit applications.

Essentially, these changes eliminate one of the major hurdles that prevent quality jobs from coming to our communities – all by simply getting state government out of the way. 

One of the other critical parts of this year’s budget was approval of the Grow PA post-secondary education and career training plan introduced by Senate Republicans to help more young people go to school here, get good jobs here after graduation, and put down their roots here.

The plan includes grants of up to $5,000 per year for students enrolled in educational programs for careers in high-demand industries that Pennsylvania needs; scholarships to reduce the cost of education for out-of-state individuals who attend schools in the Pennsylvania State System of Higher Education; expanded Ready to Succeed Scholarships; and historic investments in career and technical education.

The new grants and scholarships are designed to keep graduates in Pennsylvania. Students who accept the Grow PA grants or scholarships will be required to live and work in the state for at least 12 months for each year they receive the aid. If they do not meet these requirements, then the grants and scholarships are converted to loans.

The result will be more students attending our schools, graduating with less debt, and being connected directly to careers that will drive Pennsylvania forward.

That’s not to say the 2024-25 budget is a perfect product. No budget ever is. This year’s negotiations were extremely challenging with Republicans controlling only one chamber and Democrats controlling the other and the Governor’s office. 

Despite these obstacles, we successfully cut $740 million from Governor Shapiro’s original request, and we managed to keep the total spending below the limits set in the Taxpayers’ Bill of Rights. It was only possible this year thanks to the conservative budgeting in previous years and emphasis on building our Rainy Day Fund, but we cannot forget those are one-time dollars that won’t last forever.

As I’ve noted many times before, state government cannot print more money like the federal government. Our budget is constitutionally required to be balanced. Working together to find a way to achieve a structurally balanced budget should be among our highest priorities going forward. 

Thankfully, while we continue to have these debates and find the best way to meet the state’s needs, we have positioned ourselves to grow both economically and demographically with pro-growth policies that can move Pennsylvania forward.

Senator Martin represents the 13th District (parts of Lancaster and Berks counties) in the Pennsylvania Senate. He serves as part of the Senate Republican Leadership team as Chair of the Senate Appropriations Committee, which plays a key role in developing the state budget.