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Transit, education expected to headline Shapiro’s 2024 Pa. budget address

Credit: COMMONWEALTH MEDIA SERVICES

Kate Huangpu, Spotlight PA 
February 2, 2024

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HARRISBURG — Proposals to restructure Pennsylvania’s higher education system and boost public transit funding are expected to be centerpieces of Gov. Josh Shapiro’s upcoming Feb. 6 budget address.

But while the Democrat has already released overviews of some of those plans, his formal address will bring additional, key details. It will also confirm Shapiro’s priorities on a raft of other issues, from the question of whether he’ll keep supporting politically contentious school choice vouchers, to how hard he’ll push for a minimum wage hike, to his feelings on restoring a sidelined home-repair program.

The governor’s proposals will require the approval of both state Senate Republicans and House Democrats, who lead their respective chambers. Last year, that negotiation process led to a monthslong budget impasse.

Already, GOP leaders are voicing caution about funding. State Senate Majority Leader Joe Pittman (R., Indiana) told Spotlight PA that it appears “there will be a vast number of areas where Gov. Shapiro will propose increasing spending.”

Republicans, Pittman said, “are committed to making sure the final cost of the budget respects taxpayers.”

Shapiro’s address is the first step in legislative talks that will last through the summer. Here’s what to watch for.

K-12 public school funding

Since Commonwealth Court declared last year that Pennsylvania’s basic education funding plan is unconstitutionally inequitable, education has become an automatic plank of any state budget.

After a commission was convened to study the issue and members held hearings around the state, legislative Democrats and Republicans on the commission proposed two different plans to restructure the funding system.

They agree that more funding is necessary, and that Pennsylvania must protect poorer districts from year-to-year fluctuations in state resources. However, Democrats estimated a $5.4 billion price tag in their final report, while Republicans did not include a specific dollar amount.

Notably, the Republican report included an appropriation for a school voucher program that Shapiro has publicly supported.

The program would allow public dollars to flow to private schools via state-funded scholarships for children in poor districts. It was at the center of the conflict that blew up budget negotiations last year.

As Shapiro now attempts to chart a path through the General Assembly for education policy, his stance on vouchers, which route public money to private schools, will be in the spotlight.

The GOP-controlled state Senate is pushing hard for vouchers. In his statement to Spotlight PA, Pittman said programs that “further empower parents in the education of their children” are essential moving forward.

The Democrats who narrowly control the state House have meanwhile been unified against vouchers.

They argue vouchers divert state funds from public schools, and say public dollars shouldn’t go to schools that can deny students’ admission based on religion, sexual orientation, or English proficiency — as private schools in Pennsylvania can.

The issue also doesn’t break easily along party lines. State Sen. Anthony Williams (D., Philadelphia) argues vouchers give parents more school options, telling Spotlight PA a voucher program is “not a solution, it’s not a replacement. But it’s a mechanism that can help those who are trapped.”

PASSHE, public transit, and being “competitive as hell”

The three proposals Shapiro announced ahead of his address focus on the state’s higher education system, public transit, and economic development.

The commonwealth spends less on higher education than almost any other state, and the governor’s office says Pennsylvania’s State System of Higher Education — 10 publicly funded universities, known as PASSHE — has skyrocketed as a result.

Shapiro’s pitch would group those 10 PASSHE schools with Pennsylvania’s 15 public community colleges under a new governance arrangement.

It would also cap tuition for these state-owned universities and community colleges at $1,000 per semester for students from median-income families, plus boost grants from the Pennsylvania Higher Education Assistance Agency by $1,000 per student.

And the plan would create a new, performance-based funding formula that would apply not only to the PASSHE schools and community colleges, but to Pennsylvania’s four state-related universities, Lincoln, Penn State, Pitt, and Temple. This change would sidestep an existing requirement that funding for the state-related schools be approved by a two-thirds vote of the General Assembly, a growing political challenge.

The administration hasn’t yet released details about paying for the plan, saying only that the governor will pitch “a significant investment.” In initial press releases, Republican legislative leaders have said they support Shapiro’s proposals but want to see funding details.

PASSHE Chancellor Dan Greenstein
PASSHE Chancellor Dan Greenstein said in 2020 that the system needed to “dramatically” accelerate a redesign.

Shapiro also announced that he would propose a $1.5 billion increase in state funding for public transit over the next five years, which would mean nearly $283 million for the next fiscal year. The funding would come from an increase in the amount of the state’s sales tax revenue that is dedicated to transit.

It would mark the largest increase in state funding for public transportation in a decade, and comes as transit systems around the commonwealth warn they are approaching a fiscal cliff as federal stimulus dollars dwindle

The proposal could face political headwinds. Republican leaders in the state Senate want to tie a funding increase to expanding legislative power over Philadelphia’s district attorney.

Shapiro also released a 10-year economic development plan that details his aim to grow the agricultural, energy, life sciences, manufacturing, and technology sectors.

The plan aligns with one of the broader goals Shapiro has voiced throughout the first year of his governorship: making Pennsylvania more competitive. In last year’s budget address he told listeners, “I’m competitive as hell — and I’m sick and tired of losing out to other states.”

The economic development pitch includes a $40 million investment in various projects, including $25 million for revitalizing main streets across the state and $10 million for “innovation” in agriculture. Some of the programs in question already exist; Shapiro’s proposal would primarily increase funding.

The grants would be disbursed by the Department of Community and Economic Development, and any new funding would need to be approved by the legislature. The administration has not yet released full details about the proposal.

Environmental advocates have pushed back against the plan’s emphasis on using the commonwealth’s natural gas supply, saying that relying on fossil fuel-dependent industries will result in unsustainable and unstable economic growth.

Katie Blume of Conservation Voters of PA said the way the administration talked about natural gas and pipelines was “extremely concerning.”

“We continue massive incentives for fossil fuels in this state yet we refuse for some reason to do the same level investment on renewable energy,” said Blume.

Unfinished business

Some Democratic priorities that initially made it into last year’s budget deal fell victim to haggling over school vouchers, and supporters are watching to see whether Shapiro fits them back into his plan this year.

One program, Whole-Home Repairs, provides grants to homeowners and landlords with few properties to make health, safety, and energy efficiency improvements. It was slated to receive another $50 million, but that funding was never authorized in bills lawmakers passed in December. Another program, Level Up, provides additional funding to the state’s poorest schools and was initially set to receive $100 million, but similarly fell by the wayside.

When asked if Shapiro had recently discussed the programs and still supported them, a spokesperson for the administration said to “tune in February 6th,” adding that education and housing are “key priorities” for the administration.

Also on the table are a slew of perennial wish list items that eluded Pennsylvania’s last Democratic governor.

The biggest is an increase to Pennsylvania’s minimum wage, which is $7.25 per hour, the lowest level allowed by the federal government.

Shapiro pitched a $15 minimum wage in his budget address last year but the issue didn’t make it into a final deal.

While both chambers have passed legislation that would raise the minimum wage, they disagree on a number. Throughout the past year, Pittman has said he is open to raising it, and reiterated that position this week. But he also said he hopes Shapiro’s proposal is “a commonsense number we could reach agreement on.”

Legislative leaders on both sides of the aisle have also expressed support for further lowering the commonwealth’s corporate net income tax rate. Though the state is on track to reduce the rate to 4.99% by 2035, Shapiro has said he would like to slash it deeper, and sooner, to 4% by next year.

An early version of the fiscal code would have lowered the rate, but included mandated reporting requirements for companies based in the state that Senate Republicans opposed. The final code passed without any such language.

Stephen Caruso of Spotlight PA contributed reporting for this story.

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