A SEPTA special prosecutor, blocked funding for Penn Vet, and other winners and losers in the Pa. state budget deal

HARRISBURG — Pennsylvania, the only state with a divided legislature, finally finished its state budget late Wednesday night, nearly six months after the fiscal year began.

The final deal tied up loose ends for more than $1 billion of new and expanded programs, including a new child-care and dependent-care tax credit program and a 40% increase in a private school tax credit program.

While the bulk of the state budget was approved after a monthlong standoff during the summer, some pieces of state spending remained tied up in partisan disagreement.

Getting the rest of the budget across the finish line — with a one-seat Democratic majority in the House and a solid GOP majority in the Senate — was not a small feat. Here’s a look at the winners and losers in Pennsylvania’s final budget agreement signed by Gov. Josh Shapiro on Wednesday night.

Call it holiday cheer or goodwill, but the energy in the Capitol building shifted this week.

Lawmakers showed a willingness to work across the aisle and sent a combined 34 total bills to Gov. Josh Shapiro’s desk this week — about as many as he has signed all year up until this point. In closed-door negotiations, leaders horse-traded dozens of legislative priorities, including $100 million in new grants to address the youth mental health crisis, higher fines for so-called porch pirates who steal packages, and more.

“We just wanted to prove that we could work together,” said House Majority Leader Matt Bradford (D., Montgomery).

That bipartisanship continued late into the evening Wednesday, before House lawmakers planned to leave town through mid-March. (The Senate is scheduled to return in January while House leaders say they’ll have an extended break, in part, to fix water damage in the House chamber.)

Shapiro hosted a late-night news conference Wednesday after all of the bills were finalized. He was joined by Republican and Democratic leaders to celebrate the finalization of the state budget — six months overdue.

“Here’s the thing: Bipartisanship requires compromise. It forces us to learn and work together to give a little bit here or there, but always stay focused on making progress,” Shapiro said alongside the leaders. “They now understand that a whole lot better than maybe we all understood that before.”

Shapiro, who has been in the national spotlight in the last week as he spoke out against antisemitism, will finish his first year in office on a high note.

The University of Pennsylvania School of Veterinary Medicine receives more than $31 million in state funds each year, and has received some form of state funding since 1889.

Not this year.

Penn Vet’s funding was the only major subject lawmakers did not tackle this week, which could leave the money in limbo until March.

The funding — which makes up about a quarter of the school’s operating revenue each year — failed to pass with a two-thirds majority vote in the House after the state Senate amended the bill to remove already-approved funding for Lincoln University with mostly Republicans opposing its appropriation.

Penn president Liz Magill resigned Saturday amid backlash over her comments to a congressional committee in which she hedged on whether calling for the genocide of Jewish people violated the school’s code of conduct.

House Minority Leader Bryan Cutler (R., Lancaster) said on the House floor that Magill’s resignation was “a good first start,” but the school will need to rewrite its code of conduct to ensure that antisemitism and hate are not permitted on campus before he’ll support funding for the veterinary school.

”Hate does not belong here in the commonwealth that was founded on the principles of religious tolerance and acceptance,” Cutler said.

The state attorney general will now be able to appoint a special prosecutor to investigate crimes on SEPTA. That move marks a victory for Senate Republicans, who are vocal critics of Philadelphia District Attorney Larry Krasner and have sought to circumvent his office to enforce laws in the city.

Most Philadelphia Democrats, along with some from surrounding suburban districts, opposed the bill in the 159-44 House vote Wednesday night. Reps. Amen Brown, Pat Gallagher, and Ed Neilson were the lone Philly Democratic representatives who supported the bill.

Krasner and Sen. Sharif Street (D., Philadelphia) urged Shapiro to veto the bill at a news conference Thursday. Shapiro — who clashed with Krasner as attorney general — plans to sign it, a spokesperson said, and Shapiro said Wednesday that the bill was wrapped into an overall agreement with the legislative leaders.

The budget deal significantly expanded child- and dependent-care tax credits, which Democratic leaders say will help people reenter the workforce.

”At a time where my Republican friends talk about the need to get people off the sidelines and into the workforce, there’s a workforce that’s underutilized, there is a workforce that’s crying out for quality child care,” Bradford said.

More than 200,000 Pennsylvania residents who use child care or dependent care can now have state tax credits totaling more than three times what they were previously eligible for under federal rates.

For example, a low-income family of four with two children in child care was previously eligible for a $630 credit on a state tax return. Now, that family would be eligible for a $2,100 credit, Shapiro said.

Two major Democratic priorities were cut from the budget: a home repair program and extra funds for some school districts, which were aimed at helping some of the state’s poorest residents. The funds for those programs were approved in the original budget agreement in August, but without accompanying legislation to direct the spending, that money will sit in the state Treasury until the next fiscal year.

The Whole-Home Repairs program, which was championed by State Sen. Nikil Saval (D., Philadelphia), was a major win for progressives when it began last year. It’s been touted as a way to help people stay in their homes and has been popular in every county that’s started giving out the funds. But additional funding to continue the program didn’t make the cut this year.

Additional spending for some of the state’s poorest school districts, another Democratic priority, was also lost in the deal.

Senate Majority Leader Joe Pittman (R., Indiana) said Democrats needed to concede the programs, since the Senate GOP did not get their top priority: a private school voucher program. Shapiro helped create that voucher proposal but then vetoed it over the summer after it failed to get support from House Democrats.