PA 2024-25 budget: Shapiro calls for massive investments in education, economic development

HARRISBURG, Pa. — Gov. Josh Shapiro laid out an ambitious $48.3 billion budget Tuesday afternoon that would rebalance basic education funding, unify state-owned colleges and community colleges under one banner and make serious investments in the state’s economic development strategy.

Speaking to a joint session of the General Assembly from the Capitol Rotunda, Shapiro said Pennsylvania should spend down its excessive surplus by $3 billion to invest in the state’s future. The state’s rainy day fund is more than robust enough to address any unexpected emergencies that could come along, he said. And taxpayers expect their money to go toward needed services rather than just sit around in a state-owned bank account.

That means spending an additional $1.1 billion on basic education, limiting college tuition and fees for some Pennsylvania residents to $1,000 a semester at state-owned schools, and taking out a $500 million bond to attract businesses with shovel-ready sites.

“I know that’s a bold vision, and some will reflexively be opposed, saying, ‘We can’t afford that.’ But I would argue we can’t afford not to invest right now,” Shapiro said during a 90-minute speech.

In addition, Shapiro revealed plans for a new Office of Gun Violence, urged senators to pass legislation outlawing discrimination of the LGBTQ+ community, called for legalizing marijuana and expunging the records of non-violent offenders convicted of simple possession

Basic education

A year after increasing basic education by $567 million, Shapiro proposed a $1.1 billion increase for the next school year. Much of the increased spending would come under a new funding formula that would need to meet criteria from a 2023 Superior Court ruling that determined the existing system is unconstitutional.

At the same time, Shapiro reiterated his continued support for school vouchers, which would allow for families in struggling school districts to pay for tutors or attend a different school. Shapiro and Senate Republicans hammered out a deal on vouchers last year only to see it rejected by House Democrats.

“We’ve left room for the House and Senate to find common ground on this. Let’s not shy away from the many difficult conversations around education,” Shapiro said.

The plan would also standardize the amount school districts pay to cyber schools for each student enrolled. The change would save school districts $262 million, Shapiro said.

In addition, the budget would provide $300 million for environmental repairs at schools, which would assist schools with projects such as removing lead paint and asbestos. The 2023-24 budget set aside $175 million for similar projects.

And while he didn’t provide a price point, Shapiro said he’s asked the Department of Education to develop a digital literacy and critical thinking tool kit. With the internet providing children the world at their fingertips, it’s important for parents and educators to help children identify misinformation and make well-informed choices, he said.

“I don’t care whether our kids take a position on the left or on the right, but I do care that they’re able to discern fact from fiction,” Shapiro said.

Higher education

Shapiro’s 2024-25 budget proposal would create a new governance system for the 10 state-owned PASSHE schools and 15 community colleges. The new system would receive $975 million in funding, a $125 million increase from this year’s budget.

Once the new system is in place, his plan calls for slashing student costs in the 2025-26 budget. Shapiro said his plan would reduce tuition and fees at these schools to $1,000 a semester for state residents who earn no more than the state’s median income. That would amount to a $279 million investment, according to the Shapiro administration.

“If we can give Pennsylvanians the freedom to chart their own course and the opportunity to succeed, then economic opportunity will follow,” he said.

PASSHE schools include Kutztown University, East Stroudsburg University and West Chester University. Lehigh Carbon Community College and Northampton Community College are among the state-owned community colleges.

The tuition cuts wouldn’t apply to state-related schools, such as Penn State University and the University of Pittsburgh. However, they would see a 5% funding increase this year under a new mechanism that ties future funding to student outcomes.

The specific outcomes would need to be negotiated by lawmakers, but the proposal gives both parties something to work toward. Democrats have called for greater investments in higher education to reduce financial burdens on students while Republicans have demanded greater accountability from colleges to curb steadily rising funding requests.

Economic development

Shapiro proposed the state take out a $500 million bond to expand a pilot program that develops sites to attract businesses to Pennsylvania. Once companies move into these locations, the money generated will go toward paying off the bond, he said.

The market is demanding a program like this, he said. The pilot operated with just $10 million but received more than 100 applications seeking more than $235 million in investments.

The lack of shovel-ready sites is making it nearly impossible for the Keystone State to compete with neighbors that have already made serious investments, he said. Ohio has 1.5 million fewer residents but spends seven-times more on economic development than Pennsylvania, he noted.

“You know what? Their investment is paying off. I’m sick and tired of losing to friggin’ Ohio! We need to catch up!” Shapiro said.

Local lawmaker’s react

Reaction to the budget proposal by Lehigh Valley lawmakers fell along predictable partisan lines. Democrats such as Rep. Peter Schweyer, D-Lehigh, hailed Shapiro’s commitment to improving accessibility to education. The plan accomplishes that by ensuring students receive a quality education regardless of where they live and by earmarking more money to improve the physical condition of classrooms.

“I am strongly encouraged with what the governor outlined today; and my committee is ready to work hard to advance these initiatives. I also look forward to enjoying an honest exchange of ideas and finding those opportunities for consensus on key issues with my friends from across the aisle,” he said in a news release.

Rep. Michael Schlossberg, D-Lehigh, praised Shapiro’s commitment to mental health, including an $100 million for K-12 students and another $20 million for community-based mental health services.

“Pennsylvanians have a right to expect government to work. The years of gridlock and acrimony need to end. Gov. Shapiro’s budget is a starting point,” he said.

But Republicans such as Sen. Jarrett Coleman and Rep. Ryan Mackenzie, both of Lehigh County, criticized the package as fiscally irresponsible. Pennsylvania spent the 2010s with little to no money in its Rainy Day Fund. Building a surplus only to immediately burn through it isn’t good public policy, they said.

“We just can’t print money like the federal government. Therefore, we need to focus on our priorities and deliver a no-tax increase budget that is balanced,” Mackenzie said in a release.