By Mike Manzo
Say for a moment you woke up on February 1st of your second year as Governor of Pennsylvania, five days before delivering your annual budget address. In front of you is a new Independent Fiscal Office Report showing that revenue collections in your state exceeded estimates for the previous month by $324 million dollars. Meanwhile, you are sitting on $12 billion in surplus and Rainy Day Fund revenue.
Then, you see a new poll released that day showing your popularity is higher among voters than the past four Pennsylvania governors at this exact point in their respective tenures.
If you are that governor, you just MIGHT be tempted to swing for the fences in your upcoming address, right? The wind is in your sails, you have broad bipartisan appeal, your initially rocky relationship with GOP lawmakers sems to have gotten better, and your state coffers are as jam packed as the Schuylkill Expressway is at 5:00 PM on a Monday (or the Parkway East if you are from the same part of the state as Lt. Governor Austin Davis).
When it comes to Governor Josh Shapiro, the conventional wisdom is that he likes the small ball approach, content to rack up singles and doubles, steal a base here and there, win the game and call it a day. But this time around, the circumstances might be right for him to turn conventional wisdom on its ear. Or in parlance that Shapiro may understand better, he may take the stage on February 6th and launch a barrage of three-pointers and run you out of the gym.
Thankfully, there won’t be a ton of guesswork involved in the upcoming speech. Couple what he has already leaked with what we predict in this space and Tuesday may have more fireworks than previously thought.
The stage is set here for a paradigm-changing discussion on how we fund education in this Commonwealth, both basic and higher. Staring down a court order that will force the tough decisions on the basic ed side of the ledger, we look for Shapiro to step back and launch the three, calling for a ballpark $2 billion in new education spending. Of course, this swings the door wide open on the “how” part. This year, the talk will center around three avenues. One, straight subsidies to struggling districts; two, EITC funding and; three, vouchers. If Shapiro or his Democratic compatriots in the legislature think they can get that $2 billion without engaging in numbers two or three, we wish you the best of luck. You’re gonna need it.
On the higher education front, Pennsylvania is almost dead last in the nation in higher education funding, something that imperils our workforce, our ability to compete for talent, and the exodus of graduates to other states. Shapiro has proposed changing the annual dance of higher education funding to a performance-based model. Simply put, if a university hits the right metrics, it gets funded, regardless of the General Assembly’s ability to muster two-thirds vote in each chamber. Throw Shapiro’s plan to combine oversight of our state system schools with our community colleges, and that’s a pretty ambitious start.
Shapiro has already shown a desire to fund public safety, something that makes him different than a lot of other Democratic governors (2028 anyone?) Expect more of the same, albeit this time with a serious nod to firefighters and emergency medical service workers. The governor is fully aware that Pennsylvania is on the precipice of a crisis, with the ranks of firefighters and EMTs shrinking each year. Hence, he has signaled he is ready to put some skin in the game and make state investment here as well. Do not expect that the $30 million in additional fire service grant money he will propose on Tuesday will be the last word. $30 million is the floor. It will be interesting to see who lines up in opposition to major investments in first responders.
On the issue of trains and buses, Shapiro has already thrown down his number for SEPTA and other transit systems, and that number is a $1.5 billion, five-year proposed commitment. You wanna know why getting a deal done on transit funding is always difficult? On one side, you will hear howls of derision among rural GOP lawmakers who want no part of sending tax dollars to transit systems. On the other side, you have editorials from the Philadelphia Inquirer opining that, while $1.5 billion is nice, it is not nearly enough.
The governor has released the outline of a ten-year economic development plan that is heavy on concepts but lacks some crucial details, chief among them what will it all cost. Sure, the initial plan clocks in at $40 million, but does anyone expect that number not to rise when the General Assembly weighs in? Having focused much of his first budget on removing red tape for business growth and supporting apprenticeships and vocational training, Shapiro is now ready to remake the way we attract companies to Pennsylvania and retain what we have. Let’s face it, every governor does it. But this time around, the governor actually has ample seed money to play with, whether that be for tax credits, site prep, marketing, venture capital investments or straight up business tax cuts. If the General Assembly chooses to engage here, it could be a game changer for Pennsylvania.
We see you there, minimum wage. Oh, hello RGGI, nice of you to be here, too. Simply put, we can expect a whole lot of other proposals on Tuesday, but if the top four listed here are achieved in part or whole, you may just see Shapiro and the General Assembly put up some Joel Embid numbers in 2024.