HARRISBURG – As the Senate Appropriations Committee concluded its three-week review of Gov. Josh Shapiro’s budget proposal, members pointed out abundant flaws in the plan that could lead to budget shortfalls and tax increases in the near future.
The governor’s $51.5 billion spending plan for Fiscal Year 2025-26 features a 7.5% spending increase over the current year. Senate Republicans have previously projected that Shapiro’s spending plan would create a funding shortfall of more than $27 billion over the next five years.
Members highlighted the Administration’s unrealistic new revenues, suppressing future human services and education costs, overstating baseline revenue growth, program eliminations, tax credit revisions and other concerns. The current budget has a $3 billion structural deficit, and Shapiro’s plan would grow this deficit to $6 billion next year.
Using realistic projections on revenue and expenditures, Shapiro’s budget would eliminate the state’s $3 billion fund balance and take an additional $1.6 billion out of the state’s emergency savings, also known as the Rainy Day Fund. The emergency savings would be completely eliminated the following year and create an additional shortfall of more than $3 billion that would need to be addressed through tax increases and service cuts.
Video Highlights
The significant differences between the Administration’s tax projections and the non-partisan Independent Fiscal Office’s (IFO) projections were highlighted.
The Administration’s revenue projections for new taxes on businesses was five times higher than the IFO’s predictions. The Budget Secretary would not answer whether the new combined reporting requirements would constitute a tax increase.
Questions were raised regarding the governor’s lofty projections of how much revenue a new tax on games of skill could generate.
The governor’s decision to take money away from road and bridge projects in rural areas to give more money to SEPTA was criticized.
Concerns were raised regarding the Administration’s plan to drain the Rainy Day Fund.
The significant cost of unused properties owned by the Commonwealth was explored.
Deficit spending in the Lottery Fund and the increasing demand for services for older Pennsylvanians was discussed.
The exorbitant spending and salaries associated with the newly created State Board of Higher Education were criticized.
The Administration’s failure to account for the cost of repurposed tax credits was highlighted.
More concerns were shared about the governor’s use of the Pennsylvania State Police plane and the cost to taxpayers.
Questions were raised about the Shapiro Administration’s proposed cut to programs combatting Avian Influenza.
The Budget Secretary was not able to answer where SURE system data are located.
The growth in the cost of the governor’s PR team was highlighted.
You can find recaps and video from every Senate budget hearing at PASenateGOP.com.
CONTACT: Jason Thompson