Pittman: Pennsylvania budget negotiations need ‘a kick in the pants’ to meet June 30 deadline

An overhead from the Capitol Rotunda during Gov. Josh Shapiro's 2024 budget address in Harrisburg Feb. 6, 2024 (Commonwealth Media Services photo)

Pennsylvania lawmakers will need to pick up the pace of budget negotiations to get an agreed-upon spending plan to Gov. Josh Shapiro’s desk by the June 30 deadline, state Senate Majority Leader Joe Pittman (R-Indiana) said Tuesday.

Shapiro gave the General Assembly a $48.3 billion budget proposal in March that includes historic increases in education spending, a plan to overhaul the state’s higher education system,  $600 for million economic development, and more than $283 million in new public transportation funding.

Although the constitutional mandate to pass a budget by the end of the fiscal year has become increasingly fluid, Pittman said he doesn’t foresee a repeat of last June. Amid an impasse last summer with House Democrats over a private school tuition voucher proposal, the Senate passed its own version of the budget and left town until August.

That experience, when Senate Republicans and Shapiro negotiated a $100 million tuition voucher plan only to see it die in the Democratic-controlled House, “certainly set expectations within our caucus,” Pittman told reporters in a question and answer session Tuesday.

“Empowering parents needs to be a key part of this conversation relative to the expectations of additional funding in the public education space,” Pittman added, after identifying increased education funding as one of the main sticking points in the negotiations.

Pennsylvania lawmakers and Shapiro face a mandate from a state judge to close the gap in spending between the state’s wealthiest and poorest school districts. Commonwealth Court President Judge Renee Cohn Jubelirer ruled last year that the funding disparity violates the state Constitution.

A bipartisan commission this year found the state’s share of that amount is $5.1 billion and recommended paying it out over the next seven years. 

House Democrats passed legislation to provide that money plus $200 million more a year to be distributed according to a new equitable funding formula that takes into account factors such as poverty levels and students learning English as a second language. 

The House bill, which passed with bipartisan support, also would provide $1 billion in property tax relief to the districts that tax residents at the highest rates. 

Pittman said negotiations on increased education funding have been difficult.

“The real challenge, in my opinion, that we have in this Commonwealth is that we have 500 school districts and each and every one of them have a different definition of what’s fair,” Pittman said, adding that the House plan doesn’t account for enrollment gains and losses around the state.

Pittman said he has been in regular contact with the governor’s office, noting that he spoke with Shapiro two days earlier. 

“He offered a willingness to remain engaged, as he has been,” Pittman said. “And I indicated to him that I thought we’re moving along, but that we could perhaps use a little more of a kick in the pants to get moving.”

Elizabeth Rementer, a spokesperson for House Majority Leader Matt Bradford (D-Montgomery), said House Democrats have had ongoing conversations with caucus leaders and Shapiro.. 

“Given our ongoing positive financial health, we have a historic opportunity to advance Pennsylvania’s competitiveness by investing in our children and promoting growth. We look forward to working with our colleagues and the governor on a budget that moves our commonwealth forward,” Rementer said in a statement.

While Shapiro and House Democrats have advanced spending proposals that draw on the state’s $15 billion surplus, the Senate passed a bill early in the budget process that would reduce taxes by about $3 billion. The measure would cut the personal income tax rate from 3.07% to 2.8% and would eliminate the tax on electricity.

“I think we made very clear in the beginning of May that if the policy decision in this building is we have too much money in our bank account, that we have to recognize who gave it to us in the first place. And that’s the taxpayer,” Pittman said.

Rementer said the House majority is open to a mixture of tax cuts and investments to boost economic growth, but said the Republican plan is a “handout to the richest Pennsylvanians that for the average family wouldn’t buy a week’s worth of groceries.” The Democrats’ plan would cost less and deliver more, Rementer said. 

“More specifically, the Senate Republican tax plan spends $1.7 billion to give a family of four with a household income of $50,000 a break of $135,” Rementer said. “Whereas House Democrats’ earned income tax credit plan would save that same family of four almost $500 at a fraction of the spend — $400 million.” 

Pittman expressed skepticism about the viability of Shapiro’s public transportation spending increase, saying that in the past such allocations have been made in tandem with spending on transportation infrastructure.

“I’m hard pressed to figure out where that revenue stream comes from,” Pittman said, noting that there are potential new sources of revenue such as a fee for electric cars in lieu of gasoline tax and the regulation of so-called “skill games.”

The amount of revenue generated by a fee for electric car owners would be “very modest” and the amount that could be collected by taxing skill games is difficult to predict, Pittman said.

“Frankly, we have no sense of where these games are, how many they are. It’s really the wild west right now,” Pittman said, noting that state courts have given the slot machine-like devices a “degree of validity” and that their prevalence is becoming a public safety problem. 

The state Supreme Court on Tuesday issued an order granting an appeal by the state to determine whether a skill game machine avoids regulation as an illegal gambling machine by incorporating a skill element “that is almost entirely hidden from view and is almost impossible to complete.”

Pittman said the Senate is less committed to other proposals by Shapiro that would generate additional revenue. Although the House has considered several bills related to legalizing cannabis for adult recreational use, none have made it to the Senate. And the House passed legislation to increase the minimum wage to $15 an hour a year ago, but the Senate has not acted on it.

“Whenever the advocates came out and moved the goalposts, $20 an hour … it certainly sent a signal to our members that perhaps there’s not an interest in a serious conversation about what a new minimum wage could look like,” Pittman said.

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