Pa. House approves $45.2B budget, sends it to Senate

(*This story was updated Thursday, 7/7/2022, at 7:35 p.m. to include additional comment from Senate lawmakers.)

The Pennsylvania House of Representatives on Thursday passed a roughly $45.2 billion budget plan that includes an $850 million increase for K-12 school districts, more money for mental health, and the largest investment in environmental protection in a decade.

The vote on the general appropriations bill — touted as a bipartisan compromise that invests in people and the future of the commonwealth — passed by a 180-20 vote and now heads to the Senate.

Erica Clayton Wright, a spokesperson for Senate Majority Leader Kim Ward, R-Westmoreland, told the Capital-Star that the GOP caucus is going through the spending plan line by line. She added that a formal agreement had not been reached as of Thursday afternoon.

“We want this as much as everyone,” Clayton Wright said, adding that they want to do it right.

Senate Minority Leader Jay Costa, D-Allegheny, and Sen. Vincent Hughes, D-Philadelphia, told reporters that they hoped the upper chamber would reach an agreement Thursday evening or early Friday. Costa said Democrats in the Senate are on board with the existing proposal.

“There’s clearly momentum to move forward,” Hughes, the ranking Democrat on the Senate Appropriations Committee, said.

The proposal would increase spending by 2.9 percent over the 2021-22 budget and pay down $2 billion in debt while growing the rainy day fund to $5 billion and preserving $3.6 billion of the state’s surplus in the general fund for the future.

It also provides tax relief for individuals and businesses with a brand new state child tax credit, increased property tax rebates for senior citizens, and a reduction in the corporate net income tax to gradually bring Pennsylvania into line with other states. 

The budget also calls for spending more than $2 billion in one-time federal pandemic aid on a variety of programs including water and sewer projects, affordable housing and home repair, and refilling the state’s unemployment trust fund to avoid a tax increase for employers.

House Appropriations Chairperson Stan Saylor, R-York, said on the House floor that the package is the most comprehensive fiscal plan he has seen in his 30 years in the Legislature. Saylor, who lost a primary challenge, will leave the House at the end of the year.

“I want to thank all four caucuses for working together to put us in a fiscally responsible position for moving forward,” Saylor said. “This is a comprehensive budget that puts the needs of people before the needs of government.”

Republican leaders said the proposal reflects the majority’s commitment to producing a fiscally conservative budget while making investments in schools, working families, and businesses while addressing shortfalls in mental health funding and public safety.

 “This is really a reflection of what we’ve been working on throughout the session with some of our priorities — economic recovery, getting people back to work, [strengthening] our schools, strengthening families, and [keeping] our communities safe,” House Majority Leader Kerry Benninghoff, R-Centre, said.

Benninghoff said the plan also adheres to the Republican leaders’ goal of presenting a fiscally responsible budget to Gov. Tom Wolf by reserving some of the state’s federal pandemic assistance money.

“We pepper that over several budgetary cycles, which has enabled us to be in the position we are now,” Benninghoff said. 

Wolf’s spokesperson, Elizabeth Rementer, said the governor urged lawmakers to continue working to get a budget to his desk.

“We’re pleased that the House has put forth this bipartisan plan, which includes the governor’s call for historic increases to education and focuses on other key areas that the governor has prioritized in his own budget proposal,” Rementer said in a statement.

The ranking Democrat on the House Appropriations Committee, Matt Bradford, of Montgomery County, said the proposal is an example of the opportunities for bipartisanship in the General Assembly and corrects poor budget practices of the past.

“It is something that anyone who calls themselves a conservative, Democrat or Republican, can be proud of,” Bradford said.

While he expected some Democrats to say the budget doesn’t go far enough with investments in education and human services, he said it provides a sustainable increase in spending.

“If you want to make these investments I would say to my most strident Democratic friend you have to be able to sustain them in the inevitable economic downturns,” Bradford said.

House Republican leaders also highlighted the proposal’s tax relief provisions, including a state child care tax credit equal to 30 percent of the federal credit, a one-time 70 percent property tax rebate for senior citizens, and more money for the utility assistance program.

“This budget sets us up on a path to be more attractive to our job creators large and small,” Saylor said.

Small businesses would also receive additional tax credits in the form of expense deductions for investments in equipment and growth and by allowing them to carry forward tax liabilities for gains on property transactions. 

The budget proposal also includes a phased reduction in the corporate net income tax from 9.99 percent to 4.99 percent over the next nine years.

“This is a budget that prioritizes investments in people, not big government,” Saylor said.

Although the $525 million increase in basic education funding is less than half of Wolf’s $1.2 billion proposal, it is nonetheless a historic boost in state assistance for Pennsylvania public schools, education advocates have said.

It also increases Level Up funding for the state’s 100 neediest school districts by $225 million and special education funding by $100 million. One-time grant programs for school security and mental health investments would each receive $100 million.

House Minority Leader Joanna McClinton, D-Philadelphia, said the school funding increases are a much-needed bipartisan effort to address deficiencies in education funding that affect taxpayers who can least afford it and disadvantaged students.

“I’m so thrilled that we have taken several steps to end these inequities,” McClinton said. 

The Pennsylvania State System of Higher Education would receive a $75 million increase in general fund money and $125 million in pandemic funding to pay for the ongoing process of integrating its campuses.

Speaking to reporters before the vote Saylor touted the budget’s environmental initiatives.

“It’ll help clean up the Chesapeake Bay. It’ll clean up our streams across this Commonwealth. And it’ll take a lot of the needs that our local communities all across Pennsylvania [have] with sewer and water projects that we need to do to meet the EPA standards,” Saylor said.

They include using $220 million in federal relief funds for agricultural programs to reduce nutrient and sediment runoff, $100 million in relief funds and $56 million in oil and gas lease revenue to improve state parks and forest areas, repaying the Commonwealth Financing Authority $320 million for water and sewer projects, $6.8 million for conservation districts.

The budget calls for spending $260 million on public safety initiatives including violence intervention and prevention, local law enforcement support grants, and gun violence investigation and prosecution grants. 

Another $100 million in relief funds would go toward a mental health initiative intended to help providers deliver psychiatric care in primary care settings. It differs from a plan pushed by Rep. Mike Schlossberg, D-Lehigh, that would have paid for social workers to become regular members of police departments, increase mental health care capacity and provide training and outreach.

“It’s the number we were looking for, which is fantastic news,” Schlossberg said of the proposal. 

He also applauded an announcement by Saylor that House leaders would collaborate with the Senate to form a blue-ribbon commission to investigate how to prevent mass shootings such as the Highland Park parade shooting this week. 

“It will give us more time to hear from experts, build consensus and gain support for continued allocations in the future,” Schlossberg said.

House Republicans also highlighted $45 million in spending for election integrity in conjunction with a bill that would ban the use of third-party money, dubbed “Zuckerbucks” after Facebook founder Mark Zuckerberg’s foundation provided grants to some Pennsylvania counties in 2020.

McClinton said that although preventing the use of third-party money to assist counties was not a priority for Democrats, the state does not currently provide any aid to counties for election administration.