Gov. Josh Shapiro's first state budget includes a Scranton twist

Mar. 7—In his first budget address Tuesday, Gov. Josh Shapiro proposed more spending on public schools, a sharp increase in senior citizen property tax and rent rebates, eliminating cellphone taxes and further cutting the corporate income tax.

Basic public school funding would increase by $567.4 million and by another $103.8 million for special education. Shapiro called the budget "a down payment" on fixing a state school funding formula that a Commonwealth Court judge ruled unconstitutional last month. Shapiro told state legislators the ruling will likely stand and amounts to "a call to action."

"And that means we are all acknowledging that the court has ordered us to come to the table and come up with a better system, one that passes constitutional muster," he said.

Shapiro also called for more money to keep providing free breakfast for all school children; $100 million to match local spending for school building environmental upgrades; and tax breaks of up to $2,500 to attract new teachers. New nurses and police officers, part of other professions having trouble attracting new workers, would get the same tax break.

The budget, which would go into effect July 1, would total $44.37 billion, or 4% more than the current one, according to an administration estimate. The increase would be 6%, but the Shapiro administration moved the $930 million state police budget out of the state's operating account, according to the Associated Press.

Unlike his predecessor, Gov. Tom Wolf, Shapiro avoided proposing a natural gas extraction tax or increasing state income and sales taxes. Gross receipts and sales and use taxes on cellphones would disappear, but Shapiro proposed increasing the one-time 911 surcharge on each cellphone to $2.03 from $1.65. That would provide another $36 million for emergency and firefighting services. Another $50 million would go toward helping short-staffed 911 centers attract qualified dispatchers.

To highlight the proposed increase in property tax and rent rebates for senior citizens, Shapiro told the story of Gaylean Macuska, a mother, grandmother and great-grandmother from Scranton. She sat in the House chamber as Shapiro spoke.

"She made the choice to start college at 43 after leaving an abusive marriage. She then went on to earn three different degrees," the governor said. "She's an active volunteer who loves to give back to her community in Scranton, and she's living with stage 4 breast cancer. Gaylene's life has been full of family, full of learning and full of community."

Shapiro said rebates helped Macuska keep her home, but the program hasn't changed in 17 years.

"I want to raise the maximum rebate for seniors from $650 to $1,000," he said. "I want to increase the (income) cap for renters and homeowners to $45,000 a year. Finally, I want to tie that cap to increases in the cost of living so that this commonwealth never has to tell another senior, 'Hey, sorry, you're out of luck because your Social Security payment went up but we didn't act.'"

He said almost 175,000 more Pennsylvanians will qualify for the program under his plan.

During his election campaign last year, Shapiro called for cutting the 8.99% corporate tax to 4% by 2025, instead of the current schedule of 4.99% by 2031. Shapiro did not propose a specific time frame Tuesday, but said the state needs to keep lowering the tax to remain competitive.

Shapiro also called for money to hire 384 more state police officers and investment in historically disadvantaged businesses.

Like Wolf, Shapiro proposed increasing the minimum wage to $15 an hour, but instead of rising incrementally each year, the $15-an-hour wage would start July 1. He vowed never to allow Pennsylvania to become a "right-to-work" state, promised to keep reducing the backlog of unemployment insurance claims and proposed adding almost $67 million for child care workers .

He also proposed providing $10 million to pay public defenders who defend indigent suspects. Pennsylvania offers no support

now. Lackawanna County Chief Public Defender Larry Moran welcomed the proposal as a step toward equity with better funded and equipped prosecutors. The office, with 14 assistant public defenders and one part-time investigator, handles more than 2,000 cases a year, Moran said. New funding could allow hiring more lawyers and investigators to help defendants whose problems typically stem from drug addiction, he said.

House Republican leaders, often quick to bash a Democratic governor's budget, sounded more conciliatory than usual while also referring to the spending plan as unsustainable in future years.

"What we heard today from Gov. Shapiro was a starting point," House Republican Leader Bryan Cutler, R-100, Lancaster, said in a statement with other Republican leaders. "But one thing is for certain: We will not abandon our core principles that have made Republicans the trusted fiscal stewards we are."

In the same statement, Senate President Pro Tempore Kim Ward, R-39, Westmoreland, said the budget doesn't talk about "unleashing" Pennsylvania's energy resources or creating a modern education system that produces "necessary skilled workers to support an innovative economy." Senate Majority Leader Joe Pittman, R-41, Indiana, said Shapiro's tax breaks for teachers, nurses and police ""picks winners and losers."

House Speaker Joanna McClinton, D-191, Philadelphia, said in a statement that Shapiro's budget maintains a $5.1 billion rainy day fund while supporting public schools, improving communities' health and safety and building a stronger workforce and economy.

"His plan creates a solid foundation for the House and Senate to work from in crafting a spending plan that serves all Pennsylvanians," McClinton said.

Contact the writer: bkrawczeniuk@timesshamrock.com; 570-348-9147; @BorysBlogTT on Twitter.