Pennsylvania’s new fiscal year began last Friday, but state lawmakers and the Wolf Administration have yet to agree to a new spending plan. Both Republicans and Democrats appear hopeful a deal will be finalized this week.
Senate Republican spokesperson Erica Clayton Wright said in a statement that “steady progress” was made on the budget over the Fourth of July weekend. Senate Democrats agreed a deal is “close,” but added final elements are “still being worked out.”
Wright signaled inflation and signs of a potential recession are top of mind for negotiators.
“That concern has not been lost among Senate Republicans as progress continues to be made in budget discussions,” she said. “We need to position Pennsylvania to manage the economic headwinds before us.”
House Republicans have repeatedly expressed the same concern, while Democrats in the chamber have increasingly shown a willingness to agree to GOP-backed ideas to prepare Pennsylvania’s fiscal house for the worst.
“It is our plan to work with our Republican colleagues and get this done as soon as possible,” House Democratic Appropriations Chair Rep. Matt Bradford (D-Montgomery) said.
Here’s what we know about the budget so far:
-House Republican budget makers said a $3.5 billion dollar increase in overall spending could be coming. They say much of it will likely be propped up by the state’s more-than $2 billion in leftover federal American Rescue Plan money. Gov. Wolf has called for spending $1.9 billion of it in the new budget. Republicans have not yet shared their preferred number.
-Some of the increased spending would allow the state to pony up more for its Medicaid insurance program, according to the House GOP. The federal government has been reimbursing more of the commonwealth’s healthcare costs during the COVID-19 pandemic, but may wind it down later this year.
-House Republican Appropriations Chair Stan Saylor has said environmental efforts will receive significantly more funding. State parks, clean-up projects, and water quality improvement are among the items GOP lawmakers appear to favor. Their plans, known as Growing Greener III and the Clean Streams fund proposal, would use a combined $750 million of American Rescue Plan money. The ideas have been on the table for months.
-The state’s nearly 10% Corporate Net Income Tax will likely be cut. By how much isn’t clear, but one Republican-backed plan under consideration calls for slashing it to around 7% within five years. Another proposes to drop the rate to nearly 6% within four years.
-Republicans have repeatedly signaled K-12 public schools will be receiving more money than last year. GOP negotiators have shown willingness to agree to a figure closer to Governor Tom Wolf’s more-than $1.5 billion proposal, but have so far ruled out any plan that would meet that number.
