On February 8, Governor Tom Wolf gave his eighth and final budget address to a joint session of the Pennsylvania General Assembly. As anticipated, the Governor recalled his past budgetary/policy successes before highlighting how the strong fiscal health of the
Commonwealth––buoyed by growing revenues and large projected surpluses––makes the timing right for significant increases in state spending in his priority areas.
Pennsylvania is currently operating under a state budget of just under $39 billion. And, tax collections for the current fiscal year have greatly exceeded expectations. In fact, in his February 1 press release, PA Department of Revenue Secretary Dan Hassell reported that fiscal year-to-date General Fund collections total $26.1 billion which is $1.8 billion or 7.6 percent above estimate. Additionally, Pennsylvania has $2.2 billion in unspent one-time American Rescue Plan funds and $2.9 billion in the state’s “Rainy Day Fund.” All of this positive fiscal momentum has prompted the Governor to propose a nearly $44 billion spending plan for the 2022-2023 fiscal year. If enacted, the Governor’s proposal would increase state spending almost 17% over the current budget. These are unprecedented numbers.
During his tenure Governor Wolf’s has made increasing state funding for public education his top priority. As a result, in his time as Governor during the past seven years, Pennsylvania has increased its spending on public education by $2 billion. That is a 30% increase from the time he took office. For this coming fiscal year, he is calling for a $1.55 billion increase in basic education funding which is a 24% increase.
Despite his commitment to public education, the Governor is again proposing a statewide payment rate of $9,800 for public cyber charter schools which would result in a massive funding cut to what has become a critical educational resource for thousands of children and their families across the Commonwealth.
While the Governor has long advocated for Pennsylvania’s most vulnerable citizens, his 20222023 proposal falls short of providing sufficient funding to attract and retain essential direct support professionals (DSPs).
Additional key provisions of the Governor’s address include:
- Level funding Grants to the Arts at $9.59 million
- Providing a 5% increase to the University of Pittsburgh and the other state-related universities
- Increasing funding by 15% ($1.5 million) for regional economic development initiatives through the Partnerships for Regional Economic Performance (PREP) line-item and giving small increases to the lines for Marketing to Attract Business and World Trade PA
- Adding $60 million (a nearly 25% increase) for Pre-K Counts
- Proposing $75 million in federal funds to recruit and retain behavioral health providers
- Proposing an additional $36.6 million for county behavioral health services
- Proposing an additional $18.8 million to remove 832 individuals off the waiting list for intellectual disability and autism services
- Investing an additional $875,000 in Medicaid payments for hospitals that offer essential obstetric and neonatal services, $481,000 for hospital based burn centers, and $1,134,000 for trauma centers
As tradition has long dictated, House and Senate Republican leaders provided immediate comments regarding the Governor’s 2022-2023 budget plan. While sharing some of the Governor’s perspective on the overall fiscal well-being of the Commonwealth, Republican leadership from both chambers were critical of many aspects of the Governor’s spending proposals. Generally, they stressed the need for a disciplined approach to determining what will should be contained in a responsible budget for the coming year. They stated their collective concern that using billions in one-time funding for such a significant increase in spending will likely force the next Governor and the legislature to raise taxes to balance the 2023-2024 budget.
From here, the 2022-2023 budget process moves to the House and Senate Appropriations Committees so that legislators from both parties in both chambers can dig deeper into the details of the Governor’s proposed spending plan. How that analysis goes and how able state budgeteers are to find middle ground on key priorities will determine when a final agreement on a state budget for the coming year can be sent to the Governor for his signature.