HARRISBURG – The Senate approved a $45.2 billion General Fund Budget for Fiscal Year 2022-23 that meets the needs of Pennsylvanians today without creating multi-billion-dollar budget deficits in the future, according to Sen. Joe Pittman (R-41), who voted for the measure.
“The budget contains very, very important positive steps for the people of Pennsylvania, and I’m very excited we’ve come to this compromise budget,” Pittman said. “It’s not a perfect budget – we had give and take with the governor – and it’s not the exact budget that I would have crafted, but I think it’s a workable product that will do well for the people of Pennsylvania.”
Senate Bill 1100 now goes to the governor’s desk for enactment into law.
The $45.2 billion budget, which also includes federal American Rescue Plan Act (ARPA) funds, represents a 2.9% increase over the previous year’s spending – and $500 million less than Gov. Tom Wolf’s original budget request.
The budget agreement does not include any broad-based tax increases and is structured in a way to minimize the risk of tax increases in the years ahead.
In fact, the budget actually cuts the Corporate Net Income (CNI) tax rate from 9.99% to 8.99% and creates a phased reduction to 4.99% by 2031, moves designed to attract employers and residents to Pennsylvania.
“We made an historic cut in one of our major employer taxes, the Corporate Net Income Tax, that’s going to make us more competitive with other states, particularly in the northeast, so we can attract family-sustaining jobs to our commonwealth,” said Pittman.
As important as the economic boost provided by this plan, which will have a projected ending balance of $3.6 billion, the 2022-23 budget includes a $2.1 billion transfer to the Rainy Day Fund, bringing the total balance to nearly $5 billion.
“We put more money in the Rainy Day Fund – we actually doubled what we have in the fund – to about $5 billion, which is an historically high number,” Pittman said. “We also conducted some very important refinancing, including paying off our Unemployment Compensation debt.”
These fiscally responsible steps are critical because many economic indicators are showing a risk of a recession on the horizon. Most recently, Pennsylvania’s Independent Fiscal Office estimated a 60% chance of economic stagnation or a “growth recession” happening, and a 30% chance of a recession.
The budget includes a $525 million increase for Basic Education Funding, $225 million to provide additional support for the state’s 100 poorest school districts, a $100 million increase for Special Education funding, an additional $60 million for Pre-K Counts and $19 million more for Head Start Supplemental Assistance.
It also includes an additional $125 million in Education Improvement Tax Credits to ensure more students can learn in the educational environment that best suits their needs. Higher education receives a funding boost as well.
Increased funding is also dedicated in this year’s budget to ensure our schools are safe and secure: $100 million is appropriated for the Ready to Learn Block Grant program to address school-based mental health; and $100 million in funding is directed to a new General Fund appropriation for School Safety and Security to address physical safety and security at schools.
“We made significant investments in not only basic education, but also higher education, which is critically important to my district, the home of Indiana University of Pennsylvania (IUP),” said Pittman. IUP is part of the State System of Higher Education, which will receive a combined $200 million boost in both state and federal funding.
Building on our efforts last year to help address the serious financial challenges of our nursing homes and long-term care providers, this budget includes $150 million for costs related to nursing home staffing, $250 million in ARPA funding for long-term living programs and $20 million for supplementary payments to personal care homes.
Inflation is driving up the cost of everything, including housing, both owned and rented, and this budget directs $540 million in ARPA funding to help our most vulnerable and low-income residents by funding affordable housing construction programs, offering additional home repair assistance and bolstering the Low Income Home Energy Assistance Program and the Property Tax/Rent Rebate Program.
“I think we’ve done some very fundamental things here,” Pittman said. “We actually invested in our transportation infrastructure: we’ve accelerated the move of taking the State Police out of the Motor License Fund, so gas taxes will go toward paying for roads, bridges and transportation, where it belongs.”
The budget builds upon the plan to expedite the transition of the State Police to the $500 million annual cap from the Motor License Fund. While Gov. Wolf proposed imposing the cap in FY 2022-23, House and Senate Republicans insisted on reducing the cap in FY 2021-22. That Republican initiative will make an additional $175 million of Motor License Funding available for highway and bridges across the commonwealth over subsequent fiscal years.
Video remarks by Sen. Pittman about the budget can be viewed here.
Contact: Jeremy Dias email@example.com