PHILADELPHIA (KYW Newsradio) — Pennsylvania’s four-month-long budget impasse has come to an end, as both the state House and Senate agreed on a spending bill on Wednesday.
The $50.1 billion spending plan is 4.7% higher than last year’s budget. Democratic Gov. Josh Shapiro signed the key bill Wednesday afternoon. The governor said lawmakers could have taken the easy way out, but leaders from both parties stuck to their ideals while working across the aisle to eventually find compromises that benefit all Pennsylvanians.
“I think the key when you're in these positions, and I know the leaders feel the same way, is staying at the table, staying true to your principles and values, but also understanding the needs of the folks on the other side who got elected by a different constituency and represent a different particular point," he said.
House Democratic leader Matt Bradford said it is a win for all of Pennsylvania.
“The second installment of public education investments … a historic new entitlement for working families, a tax cut for our working families — that’s real dollars in their checkbook next year,” he said.
In a concession to Senate Republicans, the plan ends any talk of Pennsylvania’s participation in a multi-state emissions reductions pact, the Regional Greenhouse Gas Initiative. The RGGI has been tied up in courts since Gov. Tom Wolf’s executive order in 2019.
The deal abandons the regulation that could have forced power plant owners to pay for their planet-warming greenhouse gas emissions. House Republican leader Jesse Topper said the threat of RGGI was costing Pennsylvania jobs.
“Being a part of the Regional Greenhouse Gas Initiative is truly what was keeping energy development out of Pennsylvania, as we were losing jobs to West Virginia and Ohio,” he said.
Democratic state Sen. Carolyn Comitta of Chester County voted in favor, though she said it was a tough decision as climate change is a real threat.
“RGGI has become a political lightning rod, so I am willing to set it aside,” she said. “However, doing nothing, my friends, is not an option.”
Budget talks had been stuck as majority Senate Republicans had balked at the price tag, pointing out it’s about $5 billion higher than expected revenues and would blow through Pennsylvania’s cash reserves in a couple of years. State House majority Democrats and Shapiro said the plan would use some of Pennsylvania’s surplus to invest in programs that would expand revenue without raising taxes.
“Most other states are running deficits. We've got an $8 billion surplus, and we didn't tap into the rainy day fund, and we managed to make investments and cut taxes. I think that speaks to how well we all work together to get this done," Shapiro said.
The state Constitution mandates that budgets must be finalized by June 30. Both sides said during the summer that talks were progressing, but partisan bickering ramped up last month. Party leaders accused each other of using the budget for political gain as school districts and nonprofits that rely on state funding began sounding the alarm. The collapse of those talks forced SEPTA to enact significant cuts, prompting Shapiro’s administration to dip into a capital improvement fund to cover expenses for two years. Shapiro said long-term funding remains a priority.
"We're going to continue to work on transit and other priorities that aren't in this budget. I know we all had to accept a compromise. Transit remains a critically important priority for me and every member who's standing up here," he said.
SEPTA General Manager Scott Sauer said it's disappointing.
“While we have known for some time that new transit funding was unlikely to be included in this year's state budget, it is disappointing to see another year pass without action to address the immediate day-to-day needs of our riders and increasingly critical short-and long-term infrastructure investments," Sauer said in a statement.
While the state spending plan clears the major hurdle and ends the impasse, several other code bills specifically directing money still must be passed.
Democrats won’t get the amount of money that Shapiro originally sought in his initial budget proposal, but the deal is expected to deliver substantial new sums to public schools, as Democrats had sought, and an earned income tax credit for lower earners.
The advancing votes in the politically divided Legislature arrive weeks after counties, school districts and social service agencies warned of mounting layoffs, borrowing costs and growing damage to the state’s safety net. School districts, rape crisis agencies and county-run social services have gone without state aid since July 1, when the state lost some of its spending authority without a signed state budget in force.
Gas emissions
The agreement to back off the carbon dioxide cap-and-trade regulation on power plants comes six years after then-Gov. Wolf made joining the RGGI the centerpiece of his plan to fight climate change.
Wolf’s regulatory plan went around resistant Republican lawmakers in a bid to make Pennsylvania — the nation’s second-largest natural gas producer — the only major fossil fuel-producing state to undertake a carbon cap-and-trade program.
It has yet to take effect while the state’s highest court considers a legal challenge that questions whether the carbon-pricing plan amounts to a tax, and is thus unconstitutional without legislative approval.
Backers of the regulation included environmental advocates as well as solar, wind and nuclear power producers who called it the biggest step ever taken in Pennsylvania to fight climate change.
It was opposed by Republicans, fossil fuel interests and the labor unions that work on pipelines, refineries and power plants who warned that the cost was sending energy companies to other states to build new gas-fired power plants.
Shapiro had also expressed misgivings about it, and an alternative plan that he proposed has yet to receive traction in the Legislature.