Gov. Shapiro’s Budget Address: Higher K-12 Spending and New Sources of Revenue

By: Darren McKenzie, Staff Writer

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In February, Governor Josh Shapiro gave his second budget proposal as Governor, unveiling a $48.3 billion spending plan that dedicates a large increase in funding to K-12 and higher education across the state for the 2024-2025 fiscal year.[1]This proposal, a notable 9% increase from the Governor’s first budget proposal last year, adds an additional $1.1 billion towards public school operation and instruction.[2] The proposed additional funding would go towards creating a governance system to oversee the Commonwealth’s public colleges and universities as well as funds for mental health, special education, and security improvements for K-12 schools.[3] Influencing these changes are the recommendations from the school funding commission created to address the constitutional issues regarding inadequate funding of public schools across the state.[4] In light of the fact that such funds will result in $3 billion decrease in the states surplus, Gov. Shapiro recommends funding these proposals through an implementation of “sin taxes”, which could see the legalization of recreational marijuana, as well as additional tax revenue from an increase in the state’s minimum wage.[5]

Instead of a recommendation to increase sales or income taxes, Gov. Shapiro turned to new sectors such as gambling and recreational marijuana taxes to support the new budget.[6] These taxes on skill games, such as slot machines found in bars, restaurants, and convenience stores, would yield an estimated $150.4 million based on a 42% tax on daily gross revenue.[7] Most significantly, however, is the Governor’s call on the state legislature to legalize recreational marijuana in order to impose a 20% tax on recreational sales.[8] Finally, Gov. Shapiro also looks on the state legislature to enact a $15 minimum wage that could bring in over $56 million in new tax revenue.[9]

The biggest challenge to these proposals will be getting enough support from across the aisle, as state legislators have already warned their disapproval of the budget. Much of the conflict regarding school spending comes from Gov. Shapiro’s scrapping of a $100 million voucher program for charter schools during last year’s budget proposal that was backed by heavy Republican support.[10] However, a major roadblock towards Republican support is the Governor’s use of state reserve funds, which Senate Majority Leader Joe Pittman (R-Indiana) calls ”absolutely fiscally irresponsible and unsustainable.”[11] While the state’s reserve budget has seen an increase over the years due to the help of federal stimulus funding during the pandemic, State Republicans worry that these proposals would not turn a profit for multiple years, dwindling the surplus to $6.2 billion, much of which would cut into the funds reserved specifically for emergencies and economic downturns.[12]

Furthermore, it is unclear whether the state legislature would approve laws to legalize recreational marijuana and raise the minimum wage. Currently, Pennsylvania is among half of the states that do not allow recreational marijuana but is one of the 13 states that do support the use of marijuana medically.[13] While the proposal has seen vast support among Democrats and even with some Republicans, major players in the Republican-controlled state senate have yet to support its legalization. Specifically, State Senate President Pro Tempore Kim Ward (R-Westmoreland) has stated that she will not support recreational marijuana legalization until the federal government ends cannabis prohibition.[14] With regards to the minimum wage increase, while there have been talks of increasing the wage from the federal floor of $7.25 an hour, Pittman (R-Indiana) finds $15 an hour ”not a practical number.”[15]

Despite these obstacles, Gov. Shapiro remains hopeful that this year is the time for the state to “get more stuff done.”[16]While these plans do create a deficit in the budget plan, Gov. Shapiro states that now is the time to spend some of that reserve money, acknowledging that ”it is not a badge of honor, nor is it something to be politically proud of for some lawmakers out there to say: I took more money from the good people of Pennsylvania than I needed and then bragged about how I just kept it in some bank account here in the Capital.”[17] Moving forward, the state legislature will soon begin budget hearings and will have until June 30th to pass a budget for the 2024-2025 fiscal year.[18]







[7] Id.

[8] Id.

[9] Id.





[14] Id.





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