Pennsylvania Gov. Josh Shapiro proposes $48.3 billion spending plan with focus on education, revenue generation

Pennsylvania Governor Josh Shapiro presented his annual budget address on Tuesday, revealing a substantial $48.3 billion spending plan aimed at bolstering various sectors, including public education and transportation, while also introducing measures to legalize recreational marijuana and regulate skill games.

Shapiro's proposal taps into the state's $14 billion cash reserves, allocating approximately $2 billion to support increased funding for both K-12 and higher education. To generate additional revenue, the plan includes taxation on legalized marijuana sales and the regulation and taxation of skill games commonly found in bars and restaurants across Pennsylvania.

Speaking before an audience in the Capitol rotunda, Shapiro emphasized the necessity of these investments, stating: "We can’t afford not to invest right now." This budget signifies a departure from Shapiro's previous approach, which aimed to maintain relatively flat costs.

However, the proposed budget faces criticism from some quarters. Critics argue that drawing from the state's reserves for such spending is unsustainable, with estimates suggesting the reserves could be depleted by 2029 without significant adjustments to future budgets.

Republican leaders in the state legislature have voiced concerns about the fiscal responsibility of Shapiro's plan. State Senate President Pro Tempore Kim Ward described it as "a budget of unicorns and rainbows," emphasizing the need for cautious fiscal management.

One of the key areas of focus in Shapiro's budget is education spending, particularly for K-12 schools. The plan allocates almost $1.86 billion in new funding for preschool and K-12 education, nearly doubling the previous year's allocation. This increase comes in response to a Commonwealth Court ruling last year that deemed Pennsylvania's public school funding system unconstitutionally inequitable.

Public education advocates have rallied behind Shapiro's proposals, with groups like PA Schools Work praising it as "a public education budget worth fighting for." The Pennsylvania State Education Association also voiced support, calling it "a solid beginning to a multiyear process."

In addition to education, the budget addresses various other areas, including public transit, economic development, housing, and healthcare. Shapiro aims to bolster state higher education spending and proposes significant investments in public transit agencies facing financial challenges.

One of the more contentious elements of the budget involves the regulation and taxation of skill games, which resemble slot machines. Shapiro's plan includes a 42% tax on daily gross revenue from these games, estimated to generate about $150.4 million for the state in the next fiscal year.

The budget also outlines plans for the legalization of recreational marijuana, with a proposed 20% tax on sales. However, this initiative faces hurdles, particularly in the GOP-controlled state Senate, where opposition to legalization remains strong.

Despite the challenges, Shapiro remains committed to his proposals, arguing that failure to invest would be a disservice to Pennsylvania. Legislative Democrats have echoed his sentiments, calling the budget a bold attempt to invest in the commonwealth's future.