Shapiro’s 1st Pa. budget to focus on schools, business taxes

Pennsylvania Democratic Gov. Josh Shapiro speaks during a news conference in Philadelphia on Feb. 16, 2023. (AP)

HARRISBURG (AP) — Gov. Josh Shapiro is expected to emphasize funding for Pennsylvania’s poorest school districts and making the state more competitive for cutting-edge tech firms when he delivers his first budget to the Legislature on Tuesday.

Shapiro’s budget proposal comes as Pennsylvania keeps taking in robust tax collections, leaving it with $11 billion in reserve cash, even as it faces demands for more money for schools and social services and what Shapiro calls a workforce crisis.

Shapiro, a Democrat, will address a joint session of the House and Senate late Tuesday morning.

Perhaps the most prominent feature of Shapiro’s budget will be what he called a “down payment” on the billions of dollars that public school allies say are necessary to comply with a court decision that found Pennsylvania’s school funding system violates the constitutional rights of students in the poorest districts.

Shapiro also has said he wants to be a cheerleader to attract new high-tech firms and slash the state’s corporate net income tax rate by more than half by 2025, a move that would save businesses billions of dollars.

That pledge comes as Pennsylvania competes for a federally funded hydrogen hub and tries to attract the kind of multibillion-dollar battery plants and microchip factories that other states are landing.

All told, Shapiro’s budget plan for the 2023-24 fiscal year that starts July 1 is likely to exceed the current fiscal year’s $42.8 billion approved budget. He has said he will seek no tax increases.

Whatever Shapiro proposes will require approval from the Democratic-controlled House and the Republican-controlled Senate.

Most details of Shapiro’s plan remain under wraps, but he has discussed some parts of it publicly.

In addition to boosting school funding, Shapiro has said he wants to put a mental health counselor in every school building and pump more money into subsidies for child care, local civic improvement projects, university research on cutting-edge manufacturing and STEM programs in schools.

He also said he will seek financial incentives to help address complaints from school boards, police departments and hospitals about the growing difficulty in filling critical positions in public safety, health and education.

The year will be challenging, as federal pandemic subsidies expire and the state begins removing hundreds of thousands of people from Medicaid rolls who were allowed to stay on during the COVID-19 pandemic emergency, even though they were no longer eligible.

In the meantime, good fiscal times could be ending.

A legislative agency, the Independent Fiscal Office, projects that Pennsylvania will soon return to its long-term pattern of deficits now that federal pandemic aid has been spent and inflation-juiced tax collections subside.