In an almost 2-hour ceremony, the Pennsylvania 2024-25 budget was revealed yesterday

February 7 — From the Harrisburg Capitol Rotunda yesterday, Pennsylvania Governor Josh Shapiro outlined his initial plans for the 2024-25 fiscal year PA budget. 

The budget totals $48.3 billion in spending — it’s a 7.5% increase over last year.  

His full speech detailing the plan lasted about an hour and a half. 

Attorney Clint Barkdoll said, “It’s deficit spending and to me that’s always a non-starter when any government entity issues a budget that requires deficit spending.”

Some of the major items in the proposed plan include legalizing and regulating games of skill. They would be taxed at 42%. 

Barkdoll said, “The estimate is that it would generate $150 million.” 

In addition, there’s a proposal to legalize recreational marijuana. That would allegedly bring in about $250 million a year with a 20% wholesale tax on that. 

Barkdoll noted, “But even with all of these streams of revenue, there’s still about a $3.5 billion dollar deficit and Shapiro would balance the budget by pulling that $3.5 billion out of the rainy day fund. He’s pointing out well hey, there’s $14 billion in there. Let’s spend it. The problem with that kind of mentality as we know is once you create these new programs, you then have ongoing spending obligations and the rainy day fund doesn’t last forever. I think he’s also using some creative accounting on some things.”

A $15 an hour minimum wage is also part of this budget. 

Barkdoll said, “You drill down into the details of that. He says if the minimum wage goes up to that amount that will generate an additional $57 million a year in earned income tax revenue. Well that’s pretty clever when you think about it. I mean, that’s very theoretical. It doesn’t account for the fact that some employers may eliminate jobs and make cuts that might offset some of that revenue.” 

There’s more than $1 billion in new money for public schools. 

Barkdoll said, “There’s $100 million in new money for school mental health resources, $20 million for county mental health resources.” 

A big item in the school piece would cap cyber charter school reimbursement at $8,000 per student. 

Barkdoll said, “All local school districts say that is a budget buster, all these reimbursements they’re making to cyber charter schools. He’s saying cap it at $8,000 per student that would save Pennsylvania public schools about $250 million dollars plus per year. No real details on that PASSHE consolidation either. Yes, he brought it up. No details. The chancellor of PASSHE did an interview last night saying he’s very open to it, but no details whatsoever. Shapiro again said he supports school choice, school vouchers but not a dime in budget for it. My final point on this would be this has zero chance of passage. We know how this game works. The governor comes out with a wish list. Budget hearings will start in two weeks. The General Assembly will pare this down. My guess is just historically where this lands, he wants a 7.5% increase, it’ll probably land somewhere about half of that. That’s typically how it goes and they now have several months to dig into this and sort it out.” 

Michele Jansen of NewsTalk 103.7FM pointed out, “But with no real blueprints to do these things, these big pie in the sky things he wants to do. We already spent too much last year. It’s amazing to me that we would even consider these increases. It almost seemed like he was absolutely for the government taking care of you at every stage of your life. We’re going to give you free breakfast for school whether the kids need it or not. Free sanitary products for girls, whether they need it or not. Beyond those two things, we’re gonna take care of you if you’re going to be evicted. We’ll give you free legal help. We want you to finish out your years in comfort without worry. So apparently we’re going to take care of everybody who’s elderly and has Alzheimer’s or any other condition. It just felt like he was absolutely selling the fact that the government is the solution to all your problems.”

“Cradle to grave care, as the saying goes,” Barkdoll said. “It’s a good point. Here’s something else to keep an eye on. Last year I think was the first time ever they did what I called the piecemeal budget. They didn’t meet the June 30 deadline, but they kept passing patches of the budget in pieces the whole way into the fall. I do think some of these things are going to easily pass. The skill games regulation seems to have wide bipartisan support. That’s a piece I can envision the General Assembly gets behind. They pass it quickly. That’s in place. I also would not write off recreational marijuana legalization. There are a lot of Republicans in the Senate that seemingly are open to this. Even that minimum wage increase, you saw some Republicans last night saying they were open to it. So I wonder if the stage could be set that they try to do some of these as standalone bills and then just like last year, piece the budget together after the June 30 deadline.”

Jansen added, “It is dangerous that this is an election year because the thing people don’t understand, very emotionally when he did the whole minimum wage thing, I just want to scream when I hear that. First of all, most people are not at minimum wage. It’s such a farce that there’s all these breadwinners for their families being held at minimum wage. It’s an employee’s market out there right now. Most employers are paying way more than that, and we never, ever consider the fact that there’s so much more benefit to those lower wage jobs. We just discount that all together. When you raise that bottom, that doesn’t stop there. That means all the people above who earn more, they also will put the pressure on for more earnings. How does the state work? How does business work when our hands are tied, and you’re forced into these schemes that oh, emotionally sound so wonderful, but that lead us to more economic ruin?”

Barkdoll predicted, “I think you’d likely see cuts. That’s why it stood out to me where he’s saying this would bring in an additional $57 million a year in income tax, I think there’s some employers that would actually cut their workforce if they’re forced into a $15 an hour minimum wage, because everyone in the middle would then have to be given a raise as well. A lot of these places simply could not afford it.”

There’s also money in the budget for teacher incentive pay. 

Barkdoll said, “To give them incentives to get into the profession, but we know that there’s a shortage across the board and thus far these financial incentives like for student teachers, or other incentives that are related to student loans to get into the teaching profession have not worked. Yet, there’s tens of millions of dollars in this budget proposal that would be earmarked for those sorts of programs.

State Senator Doug Mastriano said, “A record setting budget that he wants to spend just about all that he has, plus he wants to dip into the rainy day fund. What we’ve heard in this message was that Josh Shapiro is great at spending other people’s money. The problem with spending other people’s money is eventually they run out of it.”