Capital Numbers Games

If there’s one predictable thing about Pennsylvania’s yearly state budget negotiations, it’s that the process of developing and finalizing a state budget is entirely unpredictable. 

Take last year’s state budget, for example. It took until December – six months after the state’s summer budget deadline – for lawmakers and the governor to finalize the last-remaining pieces of the budget. 

That stalemate was precipitated by a disagreement over using public tax dollars for private school vouchers, an issue that could reemerge as a defining issue in this year’s budget cycle. 

As lawmakers in the state Capitol hunker down for a flurry of budget-related activity throughout the month of June, City & State examines some of the top political issues that could surface in this year’s budget negotiations. 

Basic education funding 

There’s perhaps no more salient issue in this year’s budget negotiations than that of education funding.

Facing a 2023 ruling from the Commonwealth Court that determined the state’s system of funding public education to be unconstitutional, lawmakers have been at odds over how exactly to respond to the court’s ruling.

With support from some Republicans, House Democrats in Harrisburg advanced a sweeping education reform bill in June that, among other things, reforms the state’s basic education funding formula and would increase its base amount from $5.88 billion to $7.87 billion. The legislation also identifies an adequacy gap (the amount needed to close the existing statewide adequacy gap and ensure schools have enough funding to meet student needs) of $5.1 billion.

The legislation – House Bill 2370 – would also usher forth transparency and ethics measures for cyber charter schools and would establish a statewide cyber charter tuition rate of $8,000 per student, something sought in Gov. Josh Shapiro’s 2024-25 executive budget proposal.

The bill does not contain funding on its own, so lawmakers would need to iron out the funding levels in this year’s budget for the bill to have a meaningful impact from a funding perspective. However, GOP lawmakers think the state should be taking a different approach and instead embrace more school choice options and other means of education.

“Continuing to think inside a confined box in the education space and expecting a different outcome isn't productive,” Republican state Rep. Robert Leadbeter said during a House floor debate on the bill in June. “Just as public education evolved from the one-room schoolhouse, it’s now time for public education to break out from the traditional system and embrace innovation. Let’s prioritize the needs and aspirations of our students over the preservation of outdated systems and structures.”

Democratic state Rep. Joe Ciresi, a former school board member and longtime advocate for cyber charter school reforms, said on the House floor that the bill represents an opportunity to save taxpayers dollars, all while keeping the state’s existing school choice programs as they are. 

“This reform will give back our taxpayers $530 million a year – half a billion dollars will be returned to the great taxpayers of the great state of Pennsylvania,” Ciresi said. “At the same time – and let me say this three or four times because sometimes this message doesn't get through – we will maintain school choice. Let me say that again: We will maintain school choice. Again, we will maintain school choice. There is no cutting of school choice going on here.”

Private school vouchers

Speaking of school choice, on the other side of the education debate is a push for private school vouchers that has continued on from last year’s budget talks. 

Last summer, GOP lawmakers in the state Senate advanced legislation that would have used $100 million in personal income tax revenues to fund a scholarship program allowing students at low-performing public schools to attend private schools. The proposal even had the support of Shapiro, but Shapiro ultimately vetoed the funding to gain the Democratic votes needed to advance the state budget.

That has stopped the statewide push for vouchers – an issue that has gained traction in other state legislatures across the country, including Texas, where pro-voucher Republicans primaried GOP lawmakers who opposed the idea. 

In Pennsylvania, Senate Appropriations Chair Scott Martin said during a May speech that the Senate Republican Caucus remains committed to school choice proposals like vouchers, which are also known as Pennsylvania Award for Student Success, or PASS, scholarships. 

“The ultimate form of accountability and education is when you have vested parents who are saying, ‘This isn’t working for my kid, and I want to put them in something that works for them,’” Martin said in May. “That will never falter and will continue to be our push.”

Legislative proponents of school vouchers could also get support from an unexpected source: rapper and Roc Nation founder Jay-Z.

Jay-Z’s entertainment company Roc Nation announced in June that it would be launching a public campaign in support of PASS scholarships, with the company hosting 10 events from June 10 to June 21, according to Billboard. 

Paid medical and family leave

Could paid family leave finally become a reality in Pennsylvania? Lawmakers took steps in early June to bring paid family leave to fruition, with the GOP-led Senate Labor & Industry Committee approving the bill, Senate Bill 850, with 8 “yes” votes, 0 “no” votes and three lawmakers not voting. 

SB 850, also referred to as the Family Care Act, is sponsored by Republican state Sen. Devlin Robinson and Democratic state Sen. Maria Collett.

The bipartisan legislation would set up a statewide family and medical leave insurance program in Pennsylvania, which would be funded through worker contributions.

After the committee passage of the bill, Collett said in a statement that she was “thrilled” by the committee’s vote after years of inaction.

“Far too many Pennsylvanians are forced to make the impossible choice between putting food on the table and keeping a roof over their heads or caring for a new or sick family member,” Collett said. “I was thrilled to see the Senate Labor & Industry Committee pass Senate Bill 580 today, bringing us one step closer to delivering paid leave to working Pennsylvanians – and a competitive edge to our small businesses.”

Robinson, the bill’s prime sponsor, said the bill will provide security to Pennsylvania workers in times of need. 

“Everyone is going to have to care for a sick parent or spouse, welcome the birth or adoption of a child or deal with their own personal health challenges,” Robinson said in a statement. “This bill will allow them to do so while maintaining a steady source of income and protecting their job.”

Momnibus bills

The Pennsylvania Black Maternal Caucus has led the charge on a series of bills – known as the “Momnibus” bill package – aimed at improving maternal health across the state. According to a report from Spotlight PA, there’s a chance that several proposals from the Momnibus package could wind up in a negotiated budget package. 

One Momnibus bill recently passed by the House mirrors a budget ask from Shapiro: $3 million to create a grant program to distribute menstrual hygiene products to schools. During his budget address in February, Shapiro said his wife Lori spoke with Pennsylvania students “who have literally missed school because they got their period and had to run home in the middle of the day – because nothing was available for them at school.”

“This budget makes feminine hygiene products available at no cost in our schools, because girls deserve to have peace of mind so they can focus on learning,” Shapiro said at the time. 

The bill, House Bill 851, is sponsored by Democratic state Rep. Darisha Parker, and was approved by House lawmakers with a 117-85 vote on June 4. Whether that language and funding will make it into the final budget remains to be seen, though there was vocal GOP opposition expressed in the House. 

All things energy

Democrats and Republicans alike have made energy policy a key priority in 2024, making it possible that some energy policy changes could surface in this year’s budget. 

In March, Shapiro unveiled a two-part energy plan, promising to pull the state out of the controversial Regional Greenhouse Gas Initiative in exchange for a state-specific plan to regulate carbon emissions from the power sector.

The governor also expressed a desire to update the state’s Alternative Energy Portfolio Standards Act and increase the percentage of electricity generated from alternative sources. 

Meanwhile, Republicans who control the state Senate have advanced their own priorities for Pennsylvania’s energy sector. 

The chamber approved legislation in May that would create an Independent Energy Office, while amending the bill to create a new state authority that would allow energy companies to bypass the Pennsylvania Department of Environmental Protection when applying for permits to build, according to a report from StateImpact Pennsylvania. 

State Senate Majority Leader Joe Pittman said following the bill’s passage that it would “unleash” economic opportunity in Pennsylvania. Pittman also told City & State earlier this year that there are areas of common ground on energy policy between Democrats and Republicans. He cited plugging orphaned and abandoned wells, the remediation of abandoned mine reclamation sites and cleaning up the Chesapeake Bay Watershed as areas where both parties could work together.

Other economic opportunities

Shapiro and lawmakers have tossed around several ideas to increase state revenues and provide relief to Pennsylvania taxpayers – and it appears that several of those could be in play in this year’s budget. 

Shapiro identified two potential new revenue sources for the state in his executive budget plan: regulating and taxing adult-use recreational marijuana, and the regulation of games of skill, which are video gaming machines that are currently not regulated by the state’s chief gaming law, but have been effectively made legal by a series of court decisions.

Republicans, in a separate move, are pushing for tax cuts ahead of the June 30 budget deadline. 

Senate Republicans, joined by some Democrats, in May approved Senate Bill 269, a bill sponsored by GOP state Sen. Chris Gebhard that would cut the state’s Personal Income Tax from 3.07% to 2.8%, while also eliminating a gross receipts tax on electric energy sales.

House Republicans, currently in the minority, want to see the tax cuts contained in SB 269 become a priority. “Simply put, the Senate plan to cut the Personal Income Tax and slash energy taxes is the most direct way to support Pennsylvanians who literally continue to pay the price for failed fiscal and energy policies,” the House GOP leadership team said in a statement following the bill’s passage in the Senate. 

Deadline Determinations

While issues like energy, higher education changes, and maternal health are all being considered this budget season, education is top of mind among both sides of the aisle as state lawmakers and the Shapiro administration eye the state’s June 30 budget deadline. 

Like last year, disagreement on education could delay a vote on a final budget product, but the governor, speaking to reporters in mid-June, expressed a sense of optimism about negotiations. 

“I know sometimes it looks a little noisy between Democrats and Republicans, and I realize sometimes folks feel the need to chirp at me as the governor. No problem – as long as students win at the end of the day, I'm happy to accept their chirping all the time,” Shapiro said during a June 12 press conference on education. 

Shapiro didn’t commit to completing the budget by June 30 but said he’s “confident we'll be able to get that done relatively soon.”

But beyond any political posturing that may be occurring between Democrats and Republicans in Harrisburg, Shapiro said early budget talks have been constructive, once again hammering home his intention to secure major investments in education. 

“I think we're all in a good position now to understand the needs that exist in education, safety, economic development – that we all want to make investments,” he said. “We've got some different ideas on how to do that. That's OK. I'm willing to compromise, and while I don't know exactly how the numbers will shake out in this budget, here's what I absolutely can tell you will happen: We will all compromise. and no one will get everything they want.”