State Budget Process Begins with Release of Governor’s Proposal

On Tuesday, Governor Shapiro delivered his much-anticipated budget proposal for the Commonwealth, setting forth his policy and spending priorities for the Commonwealth’s 2024-25 fiscal year. The combined operating budget – inclusive of state, federal and special funds – totals $125.3 billion, an increase of 6.1%. Central components from Gov. Shapiro’s speech and budget proposal include:

  • Increasing the state minimum wage from $7.25/hour to $15/hour. Also, increasing minimum wage for tipped workers to $9.00/hour.
  • Funding reduction to the Primary Health Care Practitioner program by $2.8 million (34%).
  • Significant increases in funding and program changes for K-12 education.
  • Broad shift in the distribution model and allocation of higher education funds, including: Using a single funding model for state-related universities (Penn State, Pitt, Lincoln, and Temple), and those receiving state support, and implementing a 5% funding increase for all state-related universities; Merging PA State System of Higher Education (PASSHE) schools with community colleges, with a combined increase in funding of 15% alongside a new formula for distribution of funding moving forward; Capping in-state tuition at these institutions at $1,000 a semester for students whose families make less than the state’s median income.
  • Initiatives that build on the governor’s recently announced statewide economic development plan, with new and increased funding for various programs and initiatives.
  • Legalization and regulation of Adult Use Cannabis, with imposition of a 20% tax on the wholesale price.
  • $4 million to erase medical debt for thousands of Pennsylvanians.
  • Implementation of a skills games tax on gross gaming revenue from electronic skill games machines of 42%.

More information on the Department of Human Services budget proposal will be provided in a DHS briefing Friday morning that PACHC will participate in. Shapiro administration leaders will next meet with legislators to respond to questions and make their case on the governor’s budget proposal as the process continues to negotiate a final state budget and associated code bills by the deadline of June 30, 2024.