HARRISBURG, Pa. (KYW Newsradio) — Gov. Josh Shapiro used his annual budget address to highlight bipartisan success from the first two years of his term, calling on Republicans and Democrats to continue to work together to keep making “real differences in Pennsylvanians’ lives.” But where the governor saw reasons for optimism, Republican leaders saw an irresponsible, expensive and unsustainable fantasy.
If there was an intended theme in the governor’s address, it would be “Pennsylvania is on the rise.” He said that phrase seven times in his hour-and-a-half speech to the General Assembly.
Shapiro says he understands Republicans will naturally push back on his proposals, but he urged lawmakers to continue to challenge themselves.
“I ask you to resist the temptation to put politics above people—and instead let’s continue to work together to solve more problems,” the governor said.
“Over the last two years, we haven’t shied away from hard conversations or solving complex problems.”
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Shapiro called on the legislature to continue efforts to entice business and industry to Pennsylvania, for example, speeding up corporate net income tax rate cuts.
He is seeking more money for universities, offering hundreds of millions of dollars in tax breaks to encourage new power plant construction and relying on billions in surplus cash to balance spending.
And he called for continued investment in workforce development, using life sciences as an example of an industry that could be doing more for Pennsylvania’s economy. Shapiro says Pennsylvania ranks fourth for the number of new life sciences patents, but gets only 3% of venture capital.
“That means we’re effectively doing the research but losing out on commercial opportunities to other states.”
Shapiro is also seeking more money for universities, offering hundreds of millions of dollars in tax breaks to encourage new power plant construction and relying on billions in surplus cash to balance spending.
Also in the plan, Shapiro is proposing to send nearly $300 million more, or about 20% more, to public transit agencies as he works to stave off cutbacks by SEPTA, Philadelphia’s public transit agency struggling to regain ridership lost during the pandemic.
There were a handful of bipartisan applause moments as Shapiro called for an increase in the minimum wage, in education and workforce development, the legalization and taxation of recreational marijuana and the regulation and taxation of so-called “skill games,” viewed as competitors to casinos and lottery contests. But Shapiro went off-script to take a dig at Republicans when they didn’t join Democrats in applauding his call for continued investment in agriculture.
“I’ve never seen so many people who rep farmers who can’t even clap for them,” the governor said.
But Republicans say the governor’s estimates of revenue from weed and “skill games” are significantly inflated. And they hammered his energy policy that prioritizes a “cap and invest” plan to cut down on carbon emissions.
Shapiro’s proposal surpasses $50 billion for a state budget in Pennsylvania for the first time, requesting $51.5 billion for the 2025-2026 fiscal year beginning July 1 as Shapiro gears up for his re-election campaign.
“Someone in that administration must have used the word frugality as a theme. You know, folks, that was the last F word I could think of when it came to thinking about it. I look at this as being fantasy,” said Lancaster County Republican Scott Martin, the Senate appropriation chair, as he pointed out Pennsylvania is on pace to blow through its reserves in two years.
However, Shapiro’s hands are tied to a great extent, bound by a huge increase in costs for the medical care for the poor, as well as a slow-growing economy and a shrinking workforce that is delivering relatively meager gains in tax collections.
Passage will require approval from Pennsylvania’s Democratic-controlled House and its Republican-controlled Senate.
The Associated Press contributed to this report.