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What We’re Watching For In Gov. Shapiro’s Budget Address

Josh Shapiro

On Tuesday morning at 11:30 a.m., Gov. Josh Shapiro will deliver his first budget address to a joint session of the General Assembly at the State Capitol in Harrisburg.

The challenge before Pennsylvania’s new governor is to begin making good on campaign promises that were made on the trail.

In addition, the Commonwealth Court of Pennsylvania has ruled the state’s public school funding formula to be unconstitutional, adding to the list, as well as trying to make the state more attractive to major companies.

The governor has been under pressure to solve the funding formula issue and increase spending on K-12 aid. Sen. Vincent Hughes (D-Philadelphia), minority chair of the state Senate Appropriations Committee, wants $3.1 billion, including $1 billion for cleaning up health hazards like mold, asbestos and lead in old school buildings. Others on the winning side of the lawsuit say $2 billion is a good start this year.

“We have the funding necessary to fulfill our constitutional promise to all of Pennsylvania’s students, said Democratic Senate Education Chair Lindsey M. Williams.” It’s far past time for the legislature to prioritize students over their political agendas and create a system where all students have access to the quality public education they are guaranteed by our state constitution.”

Shapiro has promised to cut Pennsylvania’s corporate tax rate by at least one-half within two years in an attempt to woo technology companies to consider the Commonwealth.

“Pennsylvania is open for business,” Shapiro said earlier this month. “We’re going to be a leader in the industries of the future, and my administration is ready to make that happen.”

He also told KYW Newsradio in a Friday interview that he will propose a tax credit for Pennsylvanians who acquire a license or certification in front-line professions, including teachers, nurses and police officers, or for individuals in these fields who move to the Keystone State with Pennsylvania-recognized credentials.

They would be eligible for a refundable tax credit of up to $2,500 a year over three years.

Shapiro said during the interview that he will propose no new tax increases, only tax cuts. During his campaign, he proposed eliminating sales and gross receipts taxes on cell phone bills — a total of 11 percent — and slashing the 8.99% corporate net income tax rate to 4% by 2025. Tax collections on cell phone bills are about $300 million annually while the corporate net income tax is on track to collect more than $5 billion in this fiscal year.

“We are focused on putting forward legislation and ideas that help families restore economic freedom while positioning communities to thrive,” said Senate President Pro Tempore Kim Ward (R-Westmoreland). “As we work to strengthen Pennsylvania and empower families, we would like to take the opportunity presented to us by the courts and work with the governor and House to establish a 21st century education framework that ensures every student in Pennsylvania is workforce-ready and has the opportunity to get a degree or obtain a skill to secure a job. We also hope to expand upon the childcare tax credit which we enacted last year and push for investments in behavioral and mental health.”

The good news for the new governor – Pennsylvania has a nearly $11 billion surplus due to federal pandemic aid and tax collections. The bad news – the state has divided government with Democrats in the majority in the state House and Republicans controlling the state Senate.

Let the negotiations begin.

After presenting the full budget plan to the General Assembly, the heads of state departments will begin sitting for hearings with lawmakers on budget priorities, while legislative leaders and the administration will hash out spending and revenue agreements ahead of the June 30 deadline.





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