HARRISBURG — Gov. Josh Shapiro is asking Pennsylvania’s divided legislature to send more money to the state’s poorest schools, bump funding for struggling public transit systems, and raise the minimum wage as part of a $53.2 billion budget.
To help pay for the proposed 5% increase in spending, Shapiro again called on lawmakers to tax and regulate slot-like skill games and legalize recreational marijuana. He also wants them to close a corporate tax loophole that allows national companies to reduce their in-state liability.
Shapiro delivered his address Tuesday at the state Capitol, just four months after lawmakers ended a 135-day budget impasse driven by disputes over many persistent issues — particularly, how to pay for new spending amid a structural deficit.
“We all recognize it took too long last year, and that had real impacts on Pennsylvanians,” Shapiro will tell lawmakers, according to prepared remarks. “But we learned some valuable lessons through that process.”
Tuesday’s speech formally kicks off budget negotiations ahead of the June 30 deadline, and Shapiro said that a meeting between all four caucus leaders is planned for Wednesday. After lawmakers failed to meet last year’s budget deadline, Shapiro and the majority and minority leaders from the state House and Senate did not meet in person until late October, Spotlight PA reported at the time.
In recent years, lawmakers have used cash reserves built up during the COVID-19 pandemic to make up the difference in revenue and spending. Even if lawmakers embrace all three of Shapiro’s ideas to generate more money — which is unlikely, considering all failed last year amid heavy lobbying — it wouldn’t be enough to cover new spending. As proposed, Shapiro’s budget pitch would still require the state to use $4.6 billion from savings.
About half of the proposed new spending would go to the state’s human services budget, which includes health care and food assistance for low-income Pennsylvanians, as well as funding for rape crisis and domestic violence centers, and homeless assistance programs.
Shapiro is also proposing an additional $565 million for school districts with an “adequacy gap” and $300 million more for public transit agencies starting in 2027.
He’s also asking for $100 million from the rainy day fund to create a “federal response fund” to mitigate “actions or inactions” by the federal government and $100 million for a state innovation fund to subsidize venture capital firms, clinical trials, and university research. The latter would be funded by the sale of tax credits to insurance companies.
Shapiro used his Tuesday address to also renew calls for policy changes, like raising the minimum wage. The legislature last voted to raise the state’s minimum wage in 2006, and it is currently aligned with the federal minimum of $7.25 an hour.
On housing, Shapiro wants to cap rent increases on manufactured homes’ lots, seal eviction records, and modernize the state’s planning code, among other changes.
He is also calling on the legislature to regulate data centers and invest in economic development by rewriting existing tax credits or starting a new billion-dollar debt-backed program to invest in “critical infrastructure” like power plants.
And amid criticism from survivors that he hasn’t done enough, Shapiro is asking lawmakers to open a long-awaited window so adult victims of childhood sexual abuse can file lawsuits.
This story will be updated.