New hope for Philly Dems and wary GOP optimism: Shapiro’s budget a rare sign of unity in Harrisburg

HARRISBURG — Gov. Josh Shapiro openly aimed for bipartisan appeal when he unveiled his first state budget Tuesday.

At least initially, he got the response he wanted.

Democrats — and even some wary Republicans — praised the Democratic governor’s $44.4 billion proposal, signaling rare unity, at least at the outset of what is often a long, arduous, and acrimonious process.

“Normally in these moments after a budget address, there’s ... a natural tendency to be politically combative,” State Sen. Vincent Hughes (D., Philadelphia) said in a news conference. “But what he’s asked us to be is in the spirit of policy collaboration. We need to take him up on that.”

Shapiro gave a 90-minute budget address before a joint session of the state House and Senate — starting his remarks by noting the historic moment, with both of the first women to hold the top spot in their chamber: House Speaker Joanna McClinton (D., Philadelphia) and Senate President Pro Tempore Kim Ward (R., Westmoreland).

And he noted that he’d need support from both.

“But it’s also worth noting that among these two distinguished women leaders, one is a Democrat and one is a Republican,” Shapiro said, noting Pennsylvania is one of only two states with a divided government. “And nothing gets done unless a majority in her chamber and in her chamber agree.”

Shapiro’s budget, his first since taking office in January with a promise to reach out to all sides of the politically divided state, provided a road map of his policy priorities for the next four years.

» READ MORE: What you need to know about education funding proposed in Gov. Shapiro’s budget

It proposes investing hundreds of millions of dollars in new programs addressing mental health, public safety, and workforce development that could pump much-needed funds into Philadelphia’s economy, several lawmakers said. It seeks new funding for the state police, investments in vocational training, and a $15 minimum wage. It doesn’t call for any new taxes.

Hughes told The Inquirer there’s a “different dynamic here in Harrisburg” than during the previous administration, when Gov. Tom Wolf, also a Democrat, had to work with a GOP-controlled General Assembly. Wolf often made massive budget proposals that would be swiftly rejected. One GOP House leader called last year’s plan “drifting off into a fiscal fantasy land.”

This time, leaders of the GOP-controlled Senate expressed cautious optimism that they could find consensus on some of Shapiro’s initiatives.

”The governor said a lot of things we can all get on board with,” Ward said. “We just need to find out how we’re going to pay for those things.”

The newly Democratic-controlled House allows Shapiro to make a more modest spending proposal that Democrats hope to increase in the final budget, Hughes said.

“We can build up, as opposed to starting at the top down,” Hughes added.

Rep. Morgan Cephas (D., Philadelphia), the chair of the city’s delegation in Harrisburg, hailed Shapiro’s call to raise the state’s minimum wage to $15 an hour, up from $7.25.

“We have to pull people out of poverty, and we have to have a long-term strategy but also an immediate strategy,” Cephas said. “That is an immediate strategy: to put resources in everyday Philadelphians’ hands.”

» READ MORE: Gov. Shapiro wants to raise Pa.’s minimum wage to $15. Will a changing Harrisburg make it happen?

The other win for the city, Cephas and Hughes said: Shapiro calling for $100 million for school repairs.

Wolf and lawmakers had negotiated money into the budget to help Philadelphia fix-up school buildings, but on a much smaller scale, Hughes said. Shapiro is the first governor to pitch this as part of his budget proposal.

“Coming out of Philadelphia with our challenges, we have to see the glass half-full and we have to be able to work collaboratively to fix our challenges,” Cephas said.

Budget debates often lead to standoffs between the governor and General Assembly. And with lawmakers set to weigh in over the coming months, many of Shapiro’s proposals are likely to be modified.

But with no tax hikes, and conservative estimates of revenue and spending power, some Republicans found aspects to praise. Shapiro called for more modest spending increases in many areas than Wolf had.

Ward and other Republicans said they supported Shapiro’s goal of boosting investment in vocational training.

“I thought he did very well,” said Rep. Craig Williams (R., Delaware) in a House GOP video, applauding Shapiro’s increased funding for Pennsylvania State Police. “There were some things in there where he was very Republican.”

However, Williams still wants Shapiro to add funding to help prosecute crimes and decrease gun violence. And he also wants to block a 2% increase in funding for state-related Temple University “until they address the violence at the university and ensure the safety of our students.”

Still, there were points of disagreement from the left and right, and there’s still a long way to go before a budget can be passed by the divided legislature and signed by Shapiro ahead of the state’s June 30 deadline.

The Rev. Bishop Dwayne Royster, of Philadelphia, the executive director of the interfaith advocacy group POWER, said in a statement he was encouraged with some of the proposals but disappointed by the modest increase in education funding.

“The measure of any society’s success is how its most vulnerable citizens are treated, including its seniors and children,” Royster said. “This budget shortchanged our children.”

Top Democrats like Hughes also hope Shapiro will “seize the opportunity” and make historic changes to the state’s education funding system.

Shapiro’s budget calls for a $567.4 million increase in basic education, a $104 million special education increase, and a $60 million higher-education increase across colleges and universities — though those are smaller bumps than Wolf had supported. In his last budget, Wolf proposed a $1.25 billion increase in basic education funding.

Republicans pushed for more conservative reforms to education funding. For example, Ward said she wanted Shapiro to back funding for lifeline scholarships, a voucherlike program for children in underperforming schools.

”We can’t be just stuck in the same position of putting much more money into something that we all agree — and the courts have said — that we need to change,” said State Sen. Scott Martin (R., Lancaster).

Senate Majority Leader Joe Pittman (R., Indiana) urged Shapiro to withdraw the commonwealth from the Regional Greenhouse Gas Initiative (RGGI), a regional cap-and-trade program aimed at cutting carbon dioxide emissions.

Pittman called the state’s entrance into RGGI a “$600 million tax on every consumer of electricity in this commonwealth.”

Shapiro also drew red lines around certain issues he’s not willing to negotiate on, saying he would oppose moves to make Pennsylvania a “right to work” state, or to curtail LGBTQ rights, voting rights, or abortion access.

“Those are non-starters for me, so instead of arguing about that, let’s instead focus on this budget,” Shapiro said. “Let’s focus on the challenges it seeks to address.”

» READ MORE: Shapiro’s $44.4B budget pitch keeps Pa. spending relatively flat, preserves some pandemic benefits

The plan proposes cutting state taxes on mobile phones, which Shapiro said would save Pennsylvanians $124 million each year.

Shapiro administration officials told reporters in a briefing ahead of his address that they recognize the likelihood of a coming deficit, partly due to the end of federal pandemic aid, saying the state will likely need to dip into the “rainy day” fund by 2026-27 to keep up with growing spending, which is projected to exceed revenues.

The 2023-24 budget plan doesn’t touch the more than $5 billion in the state’s “rainy day” fund. In addition, Pennsylvania has more than $6.7 billion of a revenue surplus this year, mostly credited to billions in federal aid and infrastructure funding deposited during the COVID-19 pandemic.

Despite this positive financial outlook, the state’s Independent Fiscal Office projects that spending will outpace revenue starting in this year’s budget and that the gap will grow each year after that.

Shapiro said his budget pitch was “so conservative” that it used revenue projections $3 billion less over five years than what the usually cautious Fiscal Office projects.