Gov. Tom Wolf is expected to sign a $40.8 billion general fund budget that includes the largest education funding increase in state history and allocates millions of dollars from Pennsylvania’s share of the American Rescue Plan (ARP) for rental assistance, child care, nursing home and long-term care recovery and more, before its Wednesday deadline.
But the budget, praised for its bipartisanship, disappointed business groups who thought it should do more to help employers harmed by the pandemic.
The bipartisan consensus reached to bring together a timely budget was good to see, but the spending plan does not do enough to tackle hurdles for Pennsylvania businesses, such as improving the state’s corporate net income tax rate, said Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry.
“While we are pleased with the bipartisan consensus reached in this budget, we believe much more work needs to be done to boost the Commonwealth’s competitiveness,” said Barr. “We encourage the legislature to embrace our Rise to the Challenge initiative to help the private sector chart a new course to a thriving economy that will lead to more jobs and opportunities for all Pennsylvanians.”
The budget does not include any of the tax increases proposed by Wolf in his February proposed budget.
Following its approval last week, Sen. John DiSanto, R-Dauphin/Perry, called the budget fiscally responsible for not including the proposed taxes, which included a 46% Personal Income Tax hike and the imposition of an energy tax.
“This budget makes record investments in our schools, provides for essential government services and forgoes the Governor’s proposed tax hikes on hardworking Pennsylvanians as our economy recovers from the pandemic,” DiSanto said. “Rather than spend all this year’s surplus and federal stimulus funds as the Democrats have been advocating, this budget prudently anticipates tomorrow’s challenges and assures the Commonwealth is in a solid financial position to address next year’s projected budget deficit.”
The budget details how the state will use funds given to it through the American Rescue Plan Act, which includes $728.9 million to help stabilize the child care industry.
“This investment will allow parents to return to work with the comfort of knowing their young children are in safe and nurturing child care. This crucial support will help families and employers,” Wolf said.
The budget allots $450 million in ARP funding for rental assistance, $350 million for homeowner mortgage assistance, $36 million to help pay water bills and $30 million in new state dollars for violence intervention.
Another $282 million in ARP funding is set aside to help nursing homes and long-term care facilities recover from the pandemic, something that nursing home workers rallied for on the steps of the state Capitol earlier this month.
“After an unprecedented 18 months of a pandemic which took the lives of over 27,000 Pennsylvanians and devastated our healthcare workforce, PA legislators have reached a budget agreement that listens to caregivers and begins to address the long work ahead to rebuild and reform our healthcare system,” said Matthew Yarnell, president of SEIU Healthcare Pennsylvania, the state’s largest union of nurses and healthcare workers.
The budget does not include the PA Heroes Act, which would have set aside $650 million in ARP funds to support grants for community programs to bolster post-pandemic health care.
The Hospital and Healthsystem Association of Pennsylvania (HAP), an ardent advocate for the act and a statewide organization made up of 240 state health care providers, called the exclusion a “failure to address newly emerging challenges.”
“We offered a carefully crafted plan to support healthcare workers, to rebuild the infrastructure we need for the next pandemic, and to address the behavioral health crisis exacerbated by COVID-19,” said Andy Carter, president and CEO of HAP. “The plan is also specifically designed to target resources where they are needed and includes strict accountability for implementing real improvements to care. Yet, lawmakers are leaving town with those plans sitting on the drawing board, ignored.”
The budget allocates $416 million to public education funding with $200 million going to increase the state’s Fair Funding Formula for school districts, and $100 million for Level Up, a new initiative providing funding for Pennsylvania’s 100 most underfunded districts.
It also provides a $50 million increase in funding for special education, a $30 million increase for early education and $20 million for Ready to Learn, $11 million for preschool Early Intervention and $5 million for community colleges.
$400 million in ARP funds will be invested to address learning loss, provide summer enrichment and after school programs for Pennsylvania school districts and make college education more affordable and accessible for students entering the Pennsylvania State System of Higher Education.