HARRISBURG — Gov. Josh Shapiro introduced his first Pennsylvania budget Tuesday, a $44.4 billion plan that featured significant new tax relief, law enforcement and education proposals, thrusting his new administration into its initial round of fiscal wheeling and dealing with lawmakers.
Mr. Shapiro, a Democrat, spoke to a joint session of the state Legislature in the ornate House chamber, with his wife and two of his four children present. A former state attorney general and House member, he hit on the same themes of “commonsense” and practicality that he campaigned on last year and renewed in his Jan. 17 inaugural address. Speaking for almost 90 minutes — a duration a Senate Republican leader later called the longest budget address ever — Mr. Shapiro repeatedly called on both parties and chambers to work together.
“The tasks we face are too great,” Mr. Shapiro said. “It requires a collective effort.”
There were no jarring changes of direction for Pennsylvania in his plan, but plenty of proposals aimed at fixing problems or helping specific groups. He pitched a new funding structure for Pennsylvania State Police, made a blunt call for reforming the higher education system, and set the stage for a later retooling of K-12 education funding.
“This budget lowers costs and cuts taxes for Pennsylvanians,” Mr. Shapiro said. “It cuts red tape, speeds up permitting, and supports business. It strengthens our communities and strives to keep them safer and more just.”
Mr. Shapiro went into his address with the luxury of having more than $5 billion in the state’s so-called Rainy Day Fund and a projected $6-billion budget surplus at the end of the current fiscal year. His proposed overall spending figure would be an increase of about 4% from projected spending in the current fiscal year of $42.7 billion.
"If you take one thing away from this address, let it be this,” the governor said. “This budget is packed with commonsense solutions to the problems the people of Pennsylvania face every single day."
Mr. Shapiro’s address came against the backdrop of a new power dynamic in Harrisburg. Republicans control the Senate as they have for years, but Democrats have a razor-thin, one-seat majority in the House — their first time controlling the lower chamber in more than a decade. His presentation kicked off a months-long process of hearings, negotiations and votes to enact the state’s 2023-24 fiscal plan by a June 30 deadline.
And Mr. Shapiro faces high expectations as governor: The cross-party appeal of his 2022 campaign was heralded as a blueprint for Democrats, and some of his early moves in office seemed tailor made to reach Republicans.
Initial reaction to his address from lawmakers played out in dueling, simultaneous news conferences held by Democrats and Republicans within the cavernous Capitol Rotunda, where cheering for one party occasionally drowned out speakers for the other. Republican reaction ranged from congenial agreement on the need to work together to outright rejection of Mr. Shapiro’s math.
State Rep. Tim O’Neal, R-Washington, said that when money placed in a new fund to pay for State Police is included, the proposed spending increase is actually 6%. He called it “reckless” and noted Mr. Shapiro’s own projections show the surplus being gone in three years and the Rainy Day Fund balance tapped out in five.
“State government should not be looking to spend more and more and more,” said Mr. O’Neal, the House Republican whip.
Senate President Pro Tempore Kim Ward, R-Westmoreland, said only time and negotiations will tell, because “the devil is in the details.” Senate Appropriations Committee Chairman Scott Martin, one of the top Republican budget negotiators, said the plan called for “outspending revenues” in a way that doesn’t promote fiscal stability.
The Democratic leader in the Senate, Jay Costa of Allegheny County, said Mr. Shapiro’s plan is financially “reasonable and responsible” and based on a “very, very conservative” estimate of revenue growth. Another veteran Democrat, Sen. Judy Schwank, D-Berks, called Mr. Shapiro “a governor who gets it.”
Several Republicans said they were happy to hear Mr. Shapiro’s emphasis on items like workforce development and infrastructure improvement. And echoing a priority Ms. Ward expressed before Mr. Shapiro spoke, the governor said he wants the state to use federal money to cap and plug the state’s estimated 350,000 orphaned and abandoned oil and gas wells.
Those wells include boreholes and equipment left behind by more than a century of oil and gas development, many of them drilled and abandoned before Pennsylvania enacted regulations for decommissioning. They pose health, safety and environmental hazards as potential conduits for methane, a powerful greenhouse gas that can collect indoors and risk explosions.
“I’ve seen some of those wells myself,” Mr. Shapiro said. “I’ve taken a Zippo lighter — made right in Bradford, by the way — and watched a big fireball go up. That invisible gas — that is the methane that’s leaking into our atmosphere every day.”
On specific topics, Mr. Shapiro’s proposal included the following:
K-12 education: Mr. Shapiro’s proposal calls for a 7.8% increase in funding for basic education and a $104 million boost for special education. That comes as his administration and lawmakers are exploring how to proceed after a state court ruled that Pennsylvania’s funding system for K-12 education is unconstitutional. The ruling did not offer a solution and will likely face appeal, but Mr. Shapiro said it was “a call to action.”
Higher education: Mr. Shapiro bluntly described the state’s higher education system as “not working” and said he has asked Acting Education Secretary Khalid Mumin to convene a group of college and university presidents in a “time-limited work group.” Their job, he said, would be to come up with a plan that he could pitch to lawmakers next year. “Colleges are competing with one another for a limited dollar, they are duplicating degree programs, they are driving up the cost,” Mr. Shapiro said. “And they are actually reducing access, particularly for so many in our minority communities.”
Property tax and rent relief: Mr. Shapiro wants a major expansion of the program that gives out refunds for property tax and rent payments to people who meet set income thresholds. Among the specifics, Mr. Shapiro said, is a proposed increase in the maximum rebate for senior citizens, from $650 to $1,000. The changes would almost double the number of seniors who qualify, he said. While many lawmakers applauded the proposals, Sen. Lisa Boscola, D-Northampton, said they did nothing to address the underlying problem of rapidly rising property taxes. And the effect of Mr. Shapiro’s proposed increases for both rent and property tax relief, she said, might be to “devalue homeownership.”
State Police funding: Mr. Shapiro took on a persistent Harrisburg headache by proposing a major reform to Pennsylvania State Police funding through the creation of a “Public Safety and Protection Fund.” The new funding system, he said, would rapidly diminish reliance on transfers from the Motor License Fund to fund state police. Because of that, he said, about $1.5 billion more would be available over the next five years for road and bridge projects.
Professions in need: The governor proposed a tax credit to encourage people to become police officers, nurses, and teachers — professionals generally believed to be in short supply across Pennsylvania. And he proposed a first-time, $10 million state investment in public defenders.
Minimum wage: Mr. Shapiro urged lawmakers to raise the state’s minimum wage from $7.25 an hour to $15 an hour. The current minimum hasn’t changed in 14 years, lags 30 other states and makes it tougher for Pennsylvania to compete, he said.
Norfolk Southern: Mr. Shapiro said that in a meeting with Norfolk Southern CEO Alan Shaw, the executive “heard me loud and clear: They need to pay for this, and they are.” The rail company has pledged to spend more than $7 million in Pennsylvania on the response and recovery from the wreck, which spilled toxic chemicals and left residents on both sides of the state border fearing for their health.
Other items: Among many other specific moves, Mr. Shapiro proposed $16.4 million for more state troopers, an additional $10.4 million for preschool early-intervention services, and a $100-million school-based Mental Health Supports block grant program.
Mr. Shapiro’s address also featured a number of guests from Western Pennsylvania, including Jess Porter, a third-grade teacher in Pittsburgh, and Freddy Notue, a first-year apprentice with Iron Workers Local 3 in Allegheny County. He paid tribute to the late McKeesport police Officer Sean Sluganski, who was shot and killed last month in the line of duty, and thanked Officer Charles Thomas, who survived being shot in the same confrontation. Officer Thomas joined guests in the Capitol.
“Officer Sluganski made the ultimate sacrifice protecting all of us,” Mr. Shapiro said, extending prayers to Officer Thomas and to the Sluganski family.
He also touted Astrobotic Technology, a Pittsburgh firm working on a lunar lander, as a “a company that this commonwealth believed in and invested in.”
Ford Turner: fturner@post-gazette.com; Adam Smeltz: asmeltz@post-gazette.com. Anya Litvak and Megan Tomasic contributed.
First Published: March 7, 2023, 10:30 a.m.
Updated: March 7, 2023, 11:04 p.m.
