On the same morning Americans awoke to news of the ended government shutdown, Pennsylvanians were greeted by the resolution of their state’s shutdown, as well.
The night of Nov. 12, as President Trump was signing the bill to reopen the federal government, Gov. Josh Shapiro was signing into law Pennsylvania’s four-month-overdue state budget. The budget was due on June 30, but Democrats and Republicans had been unable to agree on a funding plan for the commonwealth.
A major sticking point had been the total amount of money to spend. Republicans in Harrisburg demanded no more than $47 billion in money spent, while Shapiro and the Democrats were seeking upwards of $51 billion. The final budget will spend approximately $50.1 billion.
Concessions were made for both sides. A key victory for Republicans was Shapiro’s pledge to end Pennsylvania’s to join the Regional Greenhouse Gas Initiative (RGGI). This initiative is an agreement between several northeastern states to curb greenhouse gas emissions. Republicans railed against RGGI, saying it was detrimental to Pennsylvania’s natural gas industry. Their opposition had prevented Pennsylvania from fully joining the pact in the years since former Gov. Tom Wolf ordered Pennsylvania to enroll in 2022. Several Democrats criticized the move to drop out of RGGI; One Democrat noted Pennsylvania alone is responsible for 1% of global greenhouse emissions, more than many countries.
A victory for Democrats was a tax cut for low-income working Pennsylvanians. The budget will make many workers in low-paying jobs eligible for an earned-income tax credit, which reduces their tax burden to the state depending on income and family size. Over 940,000 Pennsylvanians will benefit from this program, which received bipartisan support.
Pennsylvania school districts and counties are receiving state funding for the first time since June, but it is not all good news for them. This budget allocated over $665 million to schools, a major increase in funding and another victory for Shapiro, but in the 135 days Pennsylvania operated without a budget since June 30, school districts, counties and other organizations that rely on state funding, like nonprofit organizations, were forced to take out numerous loans to stay afloat. Loans come with interest, and now, countless schools, counties and organizations owe thousands of dollars to banks. The budget does not provide money to cover these dues, and further, the budget-allocated money may not be used to make interest payments. This creates a financial conundrum for many in Pennsylvania, one that they will likely have to face alone.
The state budget also did not address mass transit. This is now 12 years without an increase of funding to transit agencies like SEPTA in Philadelphia, where money is shorter than ever and service cuts are rampant. Transit funding had been a major sticking point in negotiations, and in order to secure more Republican support, Democrats removed a provision in the budget which would have funded SEPTA. The transit agency is currently funded by a temporary emergency fund, which will likely expire before a new transit funding deal is reached.
Much more was included in the final text, including funding for child care recruitment and senior citizen support. So too was more left unaddressed, such as the budget’s refusal to tax skill games and its lack of support for the faltering home care industry. This budget will fund Pennsylvania through the 2025-26 fiscal year, which will run until June 30, 2026. A new budget for the next year will be due by then, which may be an equally contentious fight as Shapiro will be up for reelection that November.