HARRISBURG, PA - JANUARY 17: Josh Shapiro waves after speaking at his swearing in as Governor of Pennsylvania at the State Capitol Building on January 17, 2023 in Harrisburg, Pennsylvania. Shapiro defeated Republican nominee Doug Mastriano by nearly …
HARRISBURG, Pa. - Gov. Josh Shapiro is proposing a hefty an increase in aid to Pennsylvania's schools in his first budget delivered Tuesday to the Legislature, but the Democrat's administration also emphasized prudence, saying a massive cash surplus will dwindle over time.
Shapiro’s budget proposal comes as Pennsylvania keeps taking in robust tax collections, leaving it with $11 billion in reserve cash, even as the administration faces demands for more money for schools, highways and social services.
Spending would rise modestly while Shapiro is proposing no increases in income or sales taxes, the state's two main sources of revenue.
Shapiro did not, however, repeat his call during the campaign to more than halve the corporate net income tax rate over two years, preferring instead to discuss to lawmakers while his administration keeps an eye out for volatility in collections.
Shapiro is also proposing no major one-time spending items using the reserve cash, although roughly $1 billion in new money for public schools will come with grants for mental health needs, security improvements and removing environmental hazards.
Shapiro will address a joint session of the House and Senate late Tuesday morning.
All told, Shapiro’s budget plan for the 2023-24 fiscal year that starts July 1 boosts spending to $44.4 billion, an increase of almost 4%.
It will require approval from the Democratic-controlled House and the Republican-controlled Senate.
Most of the new money will go to education, health care and social services.
His administration said it will seek no tax increases, other than a slight increase in an emergency services fee — from $1.65 to $2.03 on monthly telephone bills — to fund county emergency response systems.
On the flip side, Shapiro is proposing to eliminate taxes of 11% on mobile phone service — a promise he made during last year's campaign.
Perhaps the most prominent feature of Shapiro's budget is what he said would be 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.
He is proposing an increase of $567 million — or about 7% more — for day-to-day school operations, plus about $100 more apiece for special education, mental health counselors, anti-violence grants, and removing environmental hazards in school buildings like mold, lead and asbestos.
That cash, however, may disappoint public school advocates and the school districts that won last month's landmark court decision. They had hoped for at least $2 billion to start.
In the meantime, good fiscal times could be ending.
The proposed budget will need to siphon about $2 billion from reserves, as tax collections are projected to dip.