The Pennsylvania House on Monday passed a 2023-24 General Fund Budget, the proposal drawing praise from supporters and criticism from opponents.
The plan passed on a party line vote, with Democrats supporting Gov. Josh Shapiro’s budget proposal and adding significantly to it, and Republicans rebuking it.
Marc Stier, Executive Director of the Pennsylvania Policy Center, said in a statement Monday that even with what he termed “welcome additions” to Shapiro’s proposal, the budget passed is a fiscally responsible plan.
“The state remains on pace to have a more than $13 billion budget surplus at the end of the current fiscal year, including an $8 billion operating surplus and over $5 billion in the Rainy Day Fund,” Stier stated. “The House budget for 2023-24 expects an ending balance of $5.6 billion before additions to the Rainy Day Fund, essentially the ending balance the governor proposed in March.”
Stier said the additional funding proposed by the Appropriations Committee is supported by higher revenue expectations for the current fiscal year and Fiscal Year 2023-24 compared to projections made in March. He noted that the higher revenue expectations are based on recent projections by the Independent Fiscal Office and remain in step with recent revenues and consensus estimates for growth in the state’s economy over the next year.
House Republicans said the Democrats’ plan increases spending by $1.08 billion over the $45.9 billion proposed by Shapiro and is a $5.7 billion increase over the current fiscal year.
House Republican Leader Bryan Cutler of Lancaster stated that Democrats broke ranks with their governor, gutted his budget and replaced it with a bloated spending plan. Republicans claimed the new budget will drain the Rainy Day Fund and put Pennsylvania on a path to bankruptcy.
“While Gov. Shapiro’s budget was bad enough, Democrats today have increased spending and raised taxes, bloated state government, and rammed through a massive and unsustainable spending plan with only six hours for lawmakers and the public to read it,” Cutler said in a statement. “This is not only gross mismanagement and a lack of transparency by House Democrats, but it is the kind of sneak attack politics that the public abhors.”
Stier said that while Shapiro’s budget did not propose any additions to the Rainy Day Fund, noting that Treasurer Stacy Garrity said last week that the budget should “preserve” the $5.1 billion fund, the House appropriations committee budget proposes not only to preserve it but add an additional $558.7 million to the Rainy Day Fund.
Stier added that adopting the new budget means that at the end of the 2023-24 fiscal year on June 30, 2024, Pennsylvania will own an accumulated surplus of more than $10.5 billion, including a General Fund operating surplus of $5 billion and a $5.7 billion Rainy Day Fund.
Shapiro’s budget contained the correct priorities but lacked spending in certain key areas, including K-12 education, workforce development, and housing, said Stier. The new budget follows Shapiro’s priorities but adds spending in areas that deserve additional support. He noted that the spending is supported by additional revenue expected in both the current fiscal year and in years 2023-24.
Stier listed the areas where the House budget went beyond Shapiro’s proposal:
“The first five items in the list constitute a strong down payment on the spending that will be necessary to meet the constitutional requirement to provide an adequate education to every child in Pennsylvania,” said Stier.
He said funding for job training is a crucial investment for workers and economy. Stier said the addition to the Whole Home Repairs program will take another step forward in helping low- and moderate-income Pennsylvanians deal with the affordable housing crisis.
“The state remains on pace to have a more than $13 billion budget surplus at the end of the current fiscal year, including an $8 billion operating surplus and over $5 billion in the Rainy Day Fund,” said Stier.
House Republican Appropriations Chairman Seth Grove of York said the spending plan is fiscally irresponsible and reflects poor budgeting.
“A simple, kitchen-table idea is that you should not spend money you do not have,” said Grove. “However, the budget created and forced through the House today by House Democratic leadership not only does that, but it ensures money the state has to save Pennsylvanians from a tax increase will be gone earlier than anyone expected.”
Grove added that the new budget continues attacks on small businesses by weaponizing the Department of Labor and Industry and threatens Pennsylvania with insolvency. He said the plan reflects the “one-sided priorities” of the Democrats.
“There is so much in here that Democrats must be ashamed of that they rushed their unilateral spending plan through with only a few hours for Pennsylvanians to see what is in it,” said Grove.
The bill now heads to the Republican-controlled Senate.