HARRISBURG, Pa. (WHTM) \u2014 Just a few months after Pennsylvania\u2019s budget was completed, talks are heating up about the next budget, which, as usual, doesn\u2019t immediately have everyone\u2019s favor.<\/p>\n
Gov. Josh Shapiro (D) will give his fourth budget address Tuesday<\/a>. Last year, in February, talks were beginning about the budget, which was not finalized in November despite being due June 30.<\/p>\n The current year\u2019s budget did not touch the rainy day fund, which is at about $7.5 billion right now, but in its recent report the Independent Fiscal Office suggests that its current spending revenue levels project the upcoming budget to dip into the rainy day fund for $5 billion, so there are real fiscal warning signs this year.<\/p>\n Shapiro expected to address housing costs, energy demand, and unfinished business in budget pitch <\/a><\/p>\n \u201cThis has been building up a long time, so before COVID, we had a structural deficit of about $1 billion,\u201d director of the Independent Fiscal Office Matthew Knittel said. \u201cRoughly every year, it\u2019s increased by about a billion. Healthcare is a big driver of that; a lot of those costs are mandatory.\u201d<\/p>\n Although Knittel says there are good economic signs like sales and income taxes are ahead of their projections, meaning the state is taking in more than it had anticipated.<\/p>\n Close<\/a><\/p>\n Thanks for signing up!<\/p>\n Watch for us in your inbox.<\/p>\n Subscribe Now<\/p>\n Now again, the Governor\u2019s budget address is just a \u201cwish list.\u201d It has to be fought over, mostly with Senate Republicans because the House is mostly controlled by Democrats.<\/p>\n A battle over the rainy day fund seems to be brewing, as Republicans will not want to touch $5 billion of the $7.5 billion, considering they did not want to touch any of it this year, which was be the big line in the sand.<\/p>\n The way to fix a revenue problem is by either generating more of it, and will they do that with recreational marijuana<\/a> and skill games. Or you cut spending.<\/p>\n This is also an election year, meaning that lawmakers probably don\u2019t want the people voting in early November at the same time the budget is being finalized.<\/p>\n Copyright 2026 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.<\/p>\n