HARRISBURG, Pa. (AP) — Pennsylvania Gov. Josh Shapiro will deliver his third budget proposal to lawmakers next week, a plan that’s expected to seek substantially more aid for the poorest public schools, emphasize frugality and press the politically fraught topics of bailing out public transit and legalizing marijuana.
The plan to be unveiled Tuesday also is expected to carry aid for rural hospitals, boost pay for workers who care for the elderly or disabled and introduce taxes on skill games that are seen as competitors to casinos and lottery contests.
It comes at a time when Pennsylvania has an enormous surplus. It’s projected to have $10.5 billion in reserve when the fiscal year ends June 30.
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But the state also faces growing deficits, a slow-growing economy, a fast-growing retirement-age population that is costly to care for and cost pressures from a range of human services.
Passage will require approval from Pennsylvania’s Democratic-controlled House of Representatives and the Republican-controlled Senate.
Here’s what to watch for:
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SPENDING
Lawmakers approved a $47.6 billion spending plan for the current fiscal year. That represented a 6% increase over the prior year’s approved budget and held the line on sales and income tax rates, the state’s two major revenue sources.
Big increases went toward public schools, nursing homes and services for the intellectually disabled. However, it required about $3 billion of surplus cash to balance, eliciting warnings from Republicans that the state must slow the pace of spending or risk depleting its surplus within several years.
The state is expected to bring in $46 billion in tax collections this fiscal year — likely well below what Shapiro will propose in spending.
Lawmakers say they expect Shapiro’s forthcoming plan to emphasize cost savings and scraping up unused cash in program accounts to help offset spending increases elsewhere.
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PUBLIC SCHOOLS
Public schools are expected to be a top priority again.
Shapiro is under pressure from education allies and Democratic lawmakers to marshal billions more for schools in response to a court decision that found that Pennsylvania’s system of public school funding violates the constitutional rights of students in the poorest districts.
Lawyers for the schools that sued the state are asking for a $1 billion increase in “adequacy” money for schools that have been disadvantaged by the funding system, plus another $325 million for instruction and special education to help all districts keep pace with rising costs. That’s almost 13% more.
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PUBLIC TRANSIT
Shapiro has been adamant about preventing cutbacks by the Southeastern Pennsylvania Transportation Authority, the Philadelphia region’s public transit agency, which hasn’t regained ridership lost during the pandemic.
Republican lawmakers have insisted on finding a new revenue source and packaging transit aid with more cash for highway projects in their districts.
Last year, Shapiro proposed a $150 million tax on the skill games that are popular in bars, convenience stores, pizzerias and standalone parlors around the state. Lawmakers are again eyeing it as a way to raise the money.
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HUMAN SERVICES
Organizations that provide home care for the elderly and disabled are seeking increases in Medicaid reimbursement rates.
Direct care workers’ pay rates have fallen far behind, and it’s getting harder to find workers, making the services harder to get for people who need them, said Mia Haney of the Pennsylvania Homecare Association.
The association is seeking about $500 million in rate increases, around 7% more. Pennsylvania has among the lowest in reimbursement rates among its neighbors and comparable states, it says.
Separately, nursing home operators want at least $139 million more, or about 7%, to help keep beds open, and a $20 million increase, or about 10% more, for day programs that help the elderly get medical, nutrition, rehab and other needs met.
Gary Pezzano of LeadingAge PA said nursing home operators are taking beds offline because they can’t affording staffing costs, and that’s causing emergency rooms to get backed up because there’s a lack of beds to accept people in need of rehab or nursing care.
Counties are seeking another $100 million for the mental health services they administer — about a 33% increase — and say the network that serves its social services and criminal justice system is on the verge of collapse.
Shapiro, meanwhile, has said he’ll propose more money to support health care in rural Pennsylvania.
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ENERGY
Shapiro wants to fast-track the construction of big power plants and offer hundreds of millions of dollars in tax breaks amid an energy crunch that threatens to raise electricity bills across Pennsylvania.
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LEGALIZING MARIJUANA
Sen. Sharif Street, D-Philadelphia, said he believes passage of forthcoming legislation he’ll sponsor to legalize marijuana is possible by July 1, although getting enough Senate Republicans on board has been a challenge. Shapiro supports legalizing marijuana.
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VIOLENCE PREVENTION
The anti-gun violence group CeaseFirePA said it found big drops in gun violence — a 42% drop in victims and a 38% drop in deaths since 2022. It urged lawmakers to “double down” on $56.5 million it budgeted this year for violence prevention.
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Follow Marc Levy on X at: https://x.com/timelywriter
