Josh Shapiro delivers his second budget address, calling for education and SEPTA funding increases

Gov. Josh Shapiro unveiled an ambitious $48.3 billion spending plan Tuesday that attempts to tackle decades of deferred investments in education and proposes no new tax hikes.

The cornerstone of the governor’s budget proposal are major funding increases for the state’s public school and higher education systems. He proposed a nearly $1.1 billion increase in funding for K-12 public schools that includes $872 million in the next fiscal year as a down-payment to address decades of chronic underfunding and inequity. Shapiro also pitched a new system for higher education that would combine state-owned schools and community colleges under one governing body, among other efforts to make getting a college degree more affordable in Pennsylvania.

“No one here should be OK with an unconstitutional education system for our kids, or the status quo on higher ed, where we rank 49th in the nation in state investment,” Shapiro said.

As is tradition after the governor’s budget address, legislative leaders joined their caucuses for press conferences to challenge or celebrate the governor’s proposal.

Despite the historic nature of Gov. Josh Shapiro’s budget address, Tuesday was no different. And Senate Republicans were not happy.

“As I listened to that budget, [it was] a bunch of unicorns and rainbows without any real explanation of how we’re going to implement it and how we’re going to pay for it,” said Senate President Pro Tempore Kim Ward (R., Westmoreland).

Philadelphia Mayor Cherelle L. Parker said Gov. Josh Shapiro’s $48.3 billion budget proposal was “a great place for us to start.”

Parker, who visited Harrisburg for his address for the first time as Philadelphia’s mayor, said she wants to see further investment from the state for SEPTA as it faces a revenue pitfall. Shapiro proposed a $160 million increase in funding for the southeast’s transit system, but it doesn’t fill the whole $240 million impending deficit that Parker wants to see filled.

“We have to make sure SEPTA gets to that $240 million mark so that we don’t see a cut in services in any way, shape or form,” Parker added.

Gov. Josh Shapiro's pitch for additional state transit funding was "the strongest start we could have," said Leslie S. Richards, chief executive of SEPTA.

"I was in the [Capitol] rotunda watching three standing ovations on transit. I have never experienced anything like that in Harrisburg," Richards, a former state Transportation Secretary, said.

Shapiro made an economic case for public transit and specifically called out SEPTA.

Gov. Josh Shapiro proposed spending $100 million to fight violent crime, including the creation of an Office of Gun Violence and hiring additional state police auditors who ensure gun dealers are following regulations.

The new funding would also includes increased aid to local police departments and prosecutors for investigating gun-related crimes.

Additionally, Shapiro called on the legislature to close loopholes in the background-check system for purchasing firearms, saying it was the best opportunity to pass gun reform in 20 years.

In one of the more pointed moments of his budget address, Gov. Josh Shapiro implored lawmakers to address the state’s shortage of professional caregivers, such as those who help people who need 24/7 medical attention.

“The biggest reason why people can’t access care is because there aren’t enough caregivers, and the reason there aren’t enough caregivers is because they aren’t getting paid enough,” he said. “We’re asking someone to do this incredibly difficult, skilled, labor-intensive work, and the state rate that helps determine their paycheck yields about 12 bucks an hour.”

Shapiro highlighted advocates who have pushed for more aid for caregivers they need.

In his budget address, Gov. Josh Shapiro reiterated his calls for raising the state’s minimum wage to $15 per hour.

“It’s anticompetitive and it's hurting our workers,” he said of Pennsylvania’s reliance on the federal minimum wage of $7.25 per hour. “We’ve seen proof that Pennsylvania workers living in border counties would rather drive into another state for work so they can earn a higher wage than take a job at home in Pennsylvania.”

Shapiro called for raising the wage in his first budget address, but the proposal went nowhere in the face of Republican opposition.

Gov. Josh Shapiro proposed a $500 million bond program to attract new businesses to Pennsylvania.

Shapiro proposed using the money for site development — preparing properties for businesses to move in and clearing permitting hurdles.

The state has already piloted a $10 million site selection program, Shapiro said, and received applications totaling $235 million.

SEPTA leaders and Philadelphia elected officials are anxious to see how Shapiro's proposal for $282.8 million in new state funding for transit systems will play in the divided legislature as the largest of them faces a massive deficit and potential deep cuts.

To accomplish this, the governor wants to increase by 1.75% the percentage of sales-tax revenue going each year to the Public Transportation Trust Fund. That would generate nearly $1.5 billion over five years for the state's transit systems.

SEPTA would get $160 million yearly the proposal, a potential help in closing a projected $240 million deficit beginning July 1. Officials are preparing service cuts of 20% and a fare increase of up to 30% in case state aid does not arrive in time.

The budget documents did not offer additional details on Gov. Josh Shapiro’s plan to institute a performance-based funding system for the state-related and state-owned colleges under which schools would get money based on meeting certain benchmarks, such as graduation rates and retention rates.

Shapiro said in an interview last week that the criteria would be developed by a bipartisan committee but that it would include a component that for the first time in Pennsylvania would award colleges money for keeping their graduates in the state — addressing a long-standing “brain drain” concern that too many leave for jobs elsewhere. There also will be incentives for producing graduates in such shortage areas as nursing and enrolling first-generation students, he said.

The plan “calls for a predictable, performance-based funding formula aligned with our workforce needs, while increasing transparency and accountability for taxpayer dollars,” the budget plan said.

Gov. Josh Shapiro called for a $279 million increase in financial aid to college students from families earning $70,000 or less, but that would not kick in until 2025-26.

Questions remain about exactly what that would mean for those families.

Under his plan, students who attend the state-owned universities and community colleges would receive aid so that they would pay no more than $1,000 per semester in tuition. But students from those families likely already qualify for the maximum federal Pell grand of $7,395 or close to it, and state grant of $5,750, which already more than covers tuition and fees at those schools. Shapiro’s aid plan is envisioned as a last-dollar scholarship, which means they would get the additional funding after other aid is applied.

For the first time in six years, the state-related universities — Temple University, Pennsylvania State University, Lincoln University, and the University of Pittsburgh — would see an increase in their basic funding.

Shapiro has proposed 5%. That would be a departure from the last five years when their funding was held flat amid legislative battles over the schools’ transparency, research and tuition increases. The schools received more than $603 million collectively in the current year.

“Through these investments and governance changes, Pennsylvania will build a thriving, innovative, and responsive higher education system that better serves students and grows our economy,” Shapiro’s office said in prepared remarks about the spending plan.

Pennsylvania’s state-owned universities and community colleges would be combined into one system and receive a 15% increase in funding under Gov. Josh Shapiro’s proposed budget released Tuesday.

The 15 community colleges and 10 state universities in the Pennsylvania State System of Higher Education would get a total of $975 million, up from the $850 million they received collectively this year.

For PASSHE, that percentage rise matches an historic increase the system received in 2022, but is significantly higher than the 6% it got in for the current year. Increases in state-funding over the last few years have helped PASSHE — which includes West Chester, Cheyney, Kutztown, Millersville, East Stroudsburg, Slippery Rock, Shippensburg, Indiana, Commonwealth and Pennsylvania West universities — freeze tuition for five consecutive years.

Gov. Josh Shapiro is also proposing to set a flat $8,000 rate for what school districts pay cyber charter schools for each enrolled student — a change long sought by school districts that would save them millions, if it passes the Legislature.

Reforming Pennsylvania’s cyber charter sector, one of the nation’s largest, has been politically thorny: The schools score poorly on standardized tests, but saw enrollment surge during the pandemic, and school-choice advocates have defended them as a needed option.

Still, there has been some bipartisan consensus backing changes to the funding system. Currently, school districts pay cyber charters a per-student rate; since school districts spend widely different amounts of money, the rate cyber charters get also varies — from $8,639 to $26,564 per student, depending on the sending district, according to the governor’s office.

Gov. Josh Shapiro’s budget includes a more than $1 billion increase in basic education funding, the main pot of money for K-12 public schools. But more significant than the amount of money is how the governor proposes to distribute it.

Adopting the recommendation of a legislative panel, Shapiro is calling for devoting $872 million of that increase to a “first-year adequacy investment” — a calculation of how much school districts should be spending to educate students. That’s a direct response to last year’s Commonwealth Court ruling finding that Pennsylvania’s school funding system is unconstitutional, depriving students, particularly in poorer districts that can’t raise as much money through property taxes, of needed resources.

It also appears to incorporate the legislative panel’s proposal to not just give more money to struggling districts with weak tax bases, but to also compensate some better-funded districts with high property tax rates — what lawmakers called “tax equity supplements.” (You can read more about the proposal here.)

Gov. Josh Shapiro began his budget address by waxing poetic about the unique venue for the speech this year: the Capitol rotunda.

“The Pennsylvania General Assembly has never held a joint session in this rotunda, and the governor has never delivered a budget address here until today,” he said.

The address usually takes place in the State House chamber, but that was not possible this year due to repairs.

Gov. Josh Shapiro is making a historic address from the Main Rotunda in the state Capitol building, where he is unveiling a $48.34 billion budget, a 6.2% increase over last year’s spending plan.

Shapiro is delivering the address from the Main Rotunda for the first time. Traditionally, Pennsylvania’s governors appear before a joint session of the House and Senate within the House chamber. But the chamber is currently being repaired, so the session was convened in the opulent Main Rotunda, with attendees seated on the Moravian mosaic tile floor and the upper levels in the massive dome.

Shapiro is using the historic place to make an ambitious budget proposal, with its cornerstone pitch around major increases to education.

Philadelphia Mayor Cherelle L. Parker has returned to her old stomping ground in Harrisburg for Gov. Josh Shapiro’s budget address.

Parker, who served in Harrisburg for 10 years before joining City Council, is returning to the Capitol for the first time as the leader of Philadelphia.

Parker and Shapiro served together, and he was among her first calls when she was sworn in at the start of this year.

Gov. Josh Shapiro will make his second budget proposal from the Main Rotunda in the Capitol. He’s expected to propose a more than $45 billion budget with sweeping changes to Pennsylvania’s education systems — both higher education and public K-12 schools.

While much of the budget attention will be on education, the subject only makes up a portion of Pennsylvania’s annual budget. Shapiro is expected to propose funding increases in economic development, human services, violence prevention, and more.

Here’s what we’re watching for in Shapiro’s second budget pitch:

In his budget address last year, Gov. Josh Shapiro made clear that Pennsylvania’s system of higher education wasn’t working, with “colleges competing with one another for a limited dollar — duplicating degree programs, driving up costs, and actually reducing access.”

He vowed by the following year to “present a comprehensive and meaningful reform plan for higher education.”

On Tuesday, Shapiro will deliver that plan during his budget address, promising more details on a blueprint he rolled out Jan. 26 that called for combining Pennsylvania’s state universities with its community colleges under a new governing structure, reducing tuition at state-owned colleges to $1,000 for families making the median income of $70,000 or less, and instituting a performance-based funding system for public colleges.

Gov. Josh Shapiro plans to propose $282.8 million in new state funding for public transit in his upcoming budget, administration officials said, a development that comes as a cash-strapped SEPTA prepares for deep service cuts and a fare increase.

Shapiro’s new measure would generate an estimated $1.5 billion over five years by increasing the allocation of sales tax revenue dedicated to supporting commonwealth transit systems, the administration said. SEPTA would get the largest cut.

“Investing in and improving our public transit systems is a commonsense way to create good-paying jobs, spur economic development, and help Pennsylvanians reach their destinations safely,” Shapiro said in a statement.

Pennsylvania Gov. Josh Shapiro will deliver his second budget address in Harrisburg Tuesday from the Main Capitol rotunda.

Here’s what you need to know.

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