By Todd Brysiak
With Governor Tom Wolf’s eighth and final budget proposal now up for review, lawmakers on the House and Senate Appropriations Committees are taking the next month to assess and critique the $44 billion plan during the annual budget hearings.
In both chambers, expect to hear a litany of questions centered on the details of the governor’s proposal. Some will be supportive in nature; others… not so much. But what does it all really mean?
While nothing is certain in state government until votes are cast and bills are signed, there are some things we can learn from past experiences that offer a decent guide to what may lie ahead. And with quite a few of us here at Triad carrying old battle scars from negotiation tables during our former legislative-staffer days, it’s always a good time to dive into the proposal and offer some perspective on how certain issues may play out this year.
The Big Budget Picture
If anyone was surprised when House and Senate Republicans chided the governor for proposing a near-$44 billion spending plan that included a $6 billion increase, then there’s a better-than-good chance they’ve been asleep for the last decade.
Fiscal responsibility has been the calling card for these caucuses and their leaders, and the legislative Republicans aren’t subtle about their stance. Couple this with a governor and his Democrat colleagues in the legislature who have never been shy about spending in areas they believe are paramount to the state’s future, and we have before us – again – the standard budget-debate dichotomy.
Even with billions in extra funds sitting in the state’s coffers – some connected to federal COVID-relief dollars – it’s still very unlikely that a massive spending spree is lined up for the coming year’s budget. I don’t see any scenario where the Republican majorities in the House and Senate agree to a 16% spike in spending, especially while projecting another deficit in 2023-24. That means the $44 billion presented by the governor is far more likely a ceiling than anything else. Expect that number to come down.
While revenue collections are still uncertain for the remainder of the year, projections look strong and indicate another surplus is likely. If that’s the case, I would be shocked if all parties didn’t agree to stockpile more dollars into the Rainy-Day Fund. Republicans have long argued the state needs to better prepare for the future, and the growth in the fund over the last several years is something Governor Wolf has taken great pride in touting as a parting gift to his successor. He even went so far as to mention it in his speech.
Remaining COVID-Relief Funds
After the 2021-22 budget deal was sealed, some were very critical of the excess federal COVID-relief funds that were left on the table. Arguing the need to recover and invest, many democrat lawmakers wanted those funds out the door.
With the governor’s newest plan to drive $1.7 billion in COVID-relief to a litany of initiatives that include small business support; aid to working families; healthcare systems and behavioral health support; and Growing Greener conservation efforts, it certainly seems some of the concerns expressed last year are being addressed in 2022-23.
With the feds calling for these funds to be designated for relief by the end of 2024, the push to spend a portion of these dollars in the coming year’s budget is going to grow.
Because Republicans have been very critical of the governor’s handling of the pandemic and the way it impacted small businesses, it seems unlikely they will argue against some level of new support for this constituency – one they have historically championed.
Additionally, it’s worth noting that both the House and the Senate have Republican members who have introduced legislation to enhance Growing Greener. That could create an interesting nudge for those efforts, especially for a program that has historically garnered bipartisan support. But let’s be clear, this discussion will face its challenges.
Education Funding
As sure as the sun rises, Governor Wolf is going to propose increases to education funding when rolling out a budget plan. And, well… the sun is up.
The governor’s 2022-23 budget again calls for billions in new funds to be driven to all levels of education. The most notable portion of this is a massive $1.5 billion increase to the state’s Basic Education Funding line, which is driven out to the state’s 500 school districts.
Also included with these proposed increases were plans to levy significant changes to the state’s charter school funding policies. I’m sure most feel like Bill Murray in Groundhog Day here, but it does rekindle the annual debate on how Pennsylvania should support its education system. And this never comes without strife.
Many Republicans argue the reforms will strip charter schools of $373 million in funds at a time when parental choice in education remains paramount because of the COVID environment. Their Democrat colleagues across the aisle, however, are pointing to charter-impacts on district expenses that need to be rectified.
Before forming any opinions on how this plays out, folks need to ask themselves how hard Governor Wolf will push for charter reforms and how much he is willing to come down on his proposed funding increase requests. Those two questions will play significant roles on the pending negotiations.
And let’s keep in mind, there is a rather contentious court case underway regarding the way Pennsylvania funds its schools. The outcome of this case could impact this year’s budget deliberations.
There’s a lot to consider here, but everyone should still expect a sizable increase in education funding when all the dust settles.
Transportation Funding
Pennsylvania’s transportation funding system is in rough shape. There is a growing concern on how vital projects are being funded and how much is needed to keep our infrastructure safe and reliable. Nearly everyone agrees more needs to be done, but few can agree on what and how.
Lawmakers know tapping into the gas tax is a non-starter with their constituents, and the governor’s plan to toll bridges as a potential partial-fix has met significant resistance. But after seeing a bridge collapse in Pittsburgh last month and recognizing that it could have been far worse, folks in Harrisburg are looking for answers.
Following efforts several years back to phase down the amount of state police funding coming from the state’s Motor License Fund – its main transportation revenue source – the governor has proposed accelerating the move. This would bring more state police costs back into the General Fund, thereby freeing up Motor License Fund dollars to be used on projects and as a match for federal funds.
It’s hard to imagine something along these lines falling short during negotiations. Legislative Republicans and the governor supported this measure in the past when the initial phase-down language was included with the budget in 2016-17. They also agreed to use $279 million in federal dollars to aid in this effort in the current year’s budget.
With Pennsylvania still awaiting details from the feds on how new infrastructure funds will be spent and a growing concern clouding the transportation funding system, folks should expect a strong focus on transportation funding as budget discussions progress.
Stay tuned for Part 2 of our budget review coming tomorrow.