Pennsylvania governor expected to seek more money for schools and transit

HARRISBURG, Pa. — Pennsylvania Gov. Josh Shapiro is expected to seek more money for public schools and public transit when he delivers his third budget proposal to lawmakers Tuesday. Shapiro is also expected to reprise his support for legalizing marijuana and introducing taxes on skill games viewed as competitors to casinos and lottery contests.

Shapiro's budget proposal could approach $50 billion for the 2025-26 fiscal year beginning July 1. He was scheduled to address a joint session of the General Assembly at 11:30 a.m. in the House of Representatives as he delivered the document to lawmakers.

Passage will require approval from Pennsylvania's Democratic-controlled House and its Republican-controlled Senate.

Shapiro is under pressure from education allies and Democratic lawmakers to marshal billions more for schools in response to a court decision that found Pennsylvania's system of public school funding violates the constitutional rights of students in the poorest districts.

Shapiro's budget delivered a substantial increase for schools this year, while lawyers for the schools that sued the state are asking for a $1.3 billion increase for the next fiscal cycle, or almost 13% more.

Shapiro also has said he'll seek tax breaks to subsidize the cost of building new power plants and more money for rural health care services. He also is expected to make another pitch to legalize marijuana to skeptical Republican lawmakers.

Meanwhile, Shapiro has been adamant about preventing cutbacks by the Southeastern Pennsylvania Transportation Authority, the Philadelphia region's public transit agency struggling to regain ridership lost during the pandemic.

Republicans resisted giving Shapiro his full request last year, prompting him to divert one-time federal highway funds to stave off near-term service cutbacks and fare increases. One Shapiro-backed idea to pay for it is taxing the skill games that are popular in bars, convenience stores, pizzerias and standalone parlors around the state.

Shapiro is up against numerous pressures.

These include entreaties to boost pay for workers who care for older adults and disabled people while also navigating growing deficit projections, a slow-growing economy and a shrinking workforce.

Counties say the mental health services network they administer is on the verge of collapse and nursing home operators say they're getting rid of beds because they can't afford to staff them. Meanwhile, home care providers say it's getting harder to find and keep workers, making it harder for people who need their services to receive them.

Shapiro does have a cushion of about $10.5 billion in reserve, thanks to federal COVID-19 relief and inflation-juiced tax collections over the past few years.

However, this year's $47.6 billion spending plan required about $3 billion of surplus cash to balance, eliciting warnings from Republicans that the state must slow the pace of spending or risk depleting its surplus within several years.

The state is projected to bring in less than $47 billion in tax collections in the 2025-26 fiscal year — likely well below what Shapiro will propose in spending, especially after the state issues refunds.

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