College students, SEPTA, and legal weed: The winners and losers of Pa.’s new $47.6 billion budget

Pennsylvania’s new $47.6 billion budget includes big changes to how the state funds its public schools and a new approach to higher education.

But like any time a state needs to divide its finite resources, there are the haves and the have-nots.

Here’s a look at the biggest winners and losers in this year’s final budget.

Pennsylvania injected more than $1 billion into K-12 public schools for the next fiscal year, including several new initiatives to help school districts provide equitable and adequate education.

The full budget deal includes less spending than Gov. Josh Shapiro asked for earlier this year, and invests less than what public education advocates had said was necessary to bring tangible change to schools. But leaders maintained that the investments are a significant down payment to right decades of underfunding, and advocates recognized that the new money will be transformative for students who had been getting unequal educational opportunities due to where they live.

Changes to the state university landscape include a new higher education board and new scholarship programs for out-of-state students or for those who enter in-demand jobs after graduation and promise to stay in Pennsylvania.

Like schools across the country, Pennsylvania’s colleges and universities are struggling with enrollment declines, leading to mergers and closures. Officials say creating a new board to oversee state universities — including community colleges, state-owned, state-related and private schools — will make it easier for students to transfer credits between schools and help school leaders communicate with one another.

Lawmakers from both parties have been looking at new ways to grow Pennsylvania’s population, as demographics continue to decline. And they hope these changes will keep more students in the state after they graduate.

“We’ve done things that will help Pennsylvania keep our kids here,” said Senate President Pro Tempore Kim Ward (R., Westmoreland) in a news conference Thursday night.

Student teachers will also continue to benefit from a popular stipend program, which leaders approved for another year.

Following major missteps in budget negotiations last year that held up a final deal until December, the first-term Democratic governor landed on his feet this budget season.

“We trusted one another and we listened to one another, and we understood one another,” Shapiro said in a news conference Thursday night.

Shapiro was able to avoid another ugly fight between the divided legislature over proposed school vouchers, which he and GOP lawmakers support, amid opposition from many members of Shapiro’s own party. But in skirting that issue he again failed to accomplish one of his priorities, which would have delivered on his campaign promise to reach across the aisle.

Senate Republican leaders expressed frustration with Shapiro’s unwillingness to stick his neck out for vouchers, but promised to bring it up again in future years.

Shapiro also got to show off his ability to deliver a successful bipartisan budget in his second year as governor as his name continues to be floated nationally as a potential presidential or vice presidential candidate if President Joe Biden drops off the Democratic ticket this year.

This budget season lacked any major showdown. The tight-lipped group of bipartisan leaders negotiated the budget behind closed doors, with little insight into the deal until it was unveiled and fast-tracked through the General Assembly to Shapiro’s desk.

Pennsylvania is the only state in the country with a divided legislature, so no one got everything they wanted at the negotiating table.

“We did it with not a lot of fight and fanfare,” Ward said.

The conservative advocacy group Commonwealth Foundation, which supports pro-school choice candidates and policies, has been itching for a win over the last few years.

The group had been hoping it could pressure Shapiro and House Democrats into creating a new school voucher program, a longtime Republican priority among lawmakers and school choice advocates.

In a sour-grapes statement, the group criticized Shapiro for failing to advance the school voucher issue and said he missed opportunities to make “meaningful tax and regulatory reform.”

Those hoping that Pennsylvania would catch up with most of its neighboring states and legalize recreational cannabis will be waiting still. Shapiro had estimated it could have brought $41 million in tax revenue in its first year, and hundreds of millions of dollars from there on out. But it didn’t make it into a final budget deal.

Another potential revenue generator for the state also lost out, as leaders kicked the can down the road on regulating skill games. The slot machine look-alikes have proliferated in stores and bars across the state, and are currently not subject to taxes. They were also recently banned from Philadelphia convenience stores.

Residents hoping Pennsylvania would raise its minimum wage from $7.25 — the federal minimum that all neighboring states except Pennsylvania have surpassed at this point — will also keep waiting. No minimum wage increase made it into the deal. Shapiro and fellow Democrats have long pushed for an increase but struggle to gain traction on the issue in negotiations with their Republican colleagues.

Public transportation will get a one-time $80.5 million infusion of state money for operating expenses, but transit systems are left hoping that lawmakers will pick the issue back up in the fall to offer more.

SEPTA, which is struggling financially, will get only about $53 million as a temporary holdover payment.

SEPTA projects a $240 million operating deficit this fiscal year, as the last of its $61 billion in federal pandemic relief aid runs dry.

Republican leaders originally said they were open to setting aside funds for mass transit — as long as it included more funds for roads and bridges. But that idea was removed from the table just days before the deal was finalized, said Rep. Morgan Cephas (D., Philadelphia), who chairs Philly’s delegation to Harrisburg and helped get some money back into the budget deal.

“One of the things we’ve been adamant about, particularly myself as the Philadelphia delegation chair, is that we’re not leaving Harrisburg unless we get some type of down payment to start the conversation to ensure that mass transit is made whole and that there is sustainable funding,” Cephas added.

Staff writers Maddie Hanna and Thomas Fitzgerald contributed to this article.