Pennsylvania budget boosts funding for education, business, and transportation

The $47.6 billion Pennsylvania budget that Gov. Josh Shapiro signed into law on July 11 includes big changes to education; millions of dollars for a new program supporting small businesses; and funding for mental health resources, public transit and tourism.

The budget, which consists of 14 bills that lawmakers passed with bipartisan support after their June 30 deadline had already passed and after intense negotiations largely centered on public school funding, represents a 6.2% increase over the 2023-24 budget.

“This budget is a major victory for the people we were all elected to serve, the good people of Pennsylvania,” Shapiro, a Democrat, said just prior to signing the budget bills into law.

Here, the Pennsylvania Independent breaks down what residents can expect to see from the budget, including in their schools, businesses, and buses.

‘Goes a hell of a lot further’: How the budget affects education

Last year, a Commonwealth Court judge ruled that Pennsylvania’s school funding system was unconstitutional and the state had failed to provide an adequate education for students in poorer school districts. The judge said the state must reform the system to make funding equitable but did not provide a specific remedy.

Since then, lawmakers have battled over how much more money to invest in education, with Democrats arguing for far more money for underfunded districts and Republicans advocating for less.

The budget passed in July includes a $1.3 billion increase over last year’s budget for public K-12 schools and higher education, using a new formula for allocating money to underfunded K-12 schools. Previously, school funding was largely tied to property taxes, which meant less school funding for poorer districts with lower property values. Now, in addition to money from property taxes, the state will provide additional funding for districts that have higher poverty rates.

“Last year, the court ruled that all parties have to come together to deliver adequate and equitable education for our children. We began that work in our first budget when we delivered an historic amount for our public schools,” Shapiro said. “This budget continues that progress and goes a hell of a lot further.”

The Education Law Center and the Public Interest Law Center, which sued the state over inequitable school funding, said the dollars provided in the budget fall short of what’s needed but they will allow districts to hire teachers, tutors and counselors.

Following a number of recent federal and state reports that showed significant mental health challenges among teenagers, the budget includes $100 million in mental health funding for K-12 schools that will allow districts to hire additional mental health workers, as well as provide other resources.

“Nothing keeps me up at night more than knowing we have students in need of mental health services but lack the resources to provide them,” Iroquois School District Superintendent Shane Murray said in a prepared statement in June. “This matter significantly impacts not only our students but also our teachers and their families, placing immense stress on our staff and posing genuine safety concerns for both the students in need and their classmates.”

Jobs and small businesses

The budget includes $400 million to create the new Pennsylvania Strategic Investments to Enhance Sites program, otherwise known as PA SITES, which is intended to bring more commercial and industrial sites to Pennsylvania by providing grant funding for site development. Another $100 million is included in the budget for other site development work.

The 2023-24 budget included funding for a pilot PA SITES program. Once that pilot launched, the state received 102 applications for more than $236 million in funding — $13 million more than the funding provided for the pilot initiative. One project that received funding as part of the pilot initiative was RIDC Southwestern Pennsylvania Growth Fund’s development of a former industrial site that’s slated to become a film and entertainment industry hub. The $2.3 million it received is being used to prepare the area for building, utilities and asphalt paving.

This additional $400 million for PA SITES will play a significant role in job creation, Pennsylvania Department of Community and Economic Development Secretary Rick Siger said.

“That means more companies can create family-sustaining jobs for Pennsylvanians,” Siger said during a press conference in Bethlehem on July 16. “That means stronger communities and local economies. And, importantly, it means we are planting a flag globally, signaling to the business community that Pennsylvania is open for business.”

The budget also provides $20 million for the new Main Street Matters program, which will provide grant funding to support small businesses in downtowns and other commercial corridors. Siger said earlier this year that the grant funding could be used for a variety of commercial upgrades, including business facade restoration.

Another $20 million is allocated for the Historically Disadvantaged Business Program, which was originally born from federal COVID dollars and provides grants to small minority-, women- and veteran-owned businesses in Pennsylvania.

Fifteen million dollars for tourism marketing will also create jobs, those involved in the industry previously told the Pennsylvania Independent.

Public transportation

While Shapiro originally proposed a $283 million boost for public transportation, the final budget ended up providing an $80.5 million increase for struggling public transportation agencies. The governor noted the increase is meant to help bridge a funding gap largely created due to a drop in ridership during the pandemic.

“That is just a start,” Shapiro said just prior to signing the budget bills. “Myself, [House] Leader [Matt] Bradford, Sen. [Joe] Pittman, we are all committed to returning in the fall and finding a permanent solution for mass transit across Pennsylvania.”

Officials of the largest public transit agency in the state, the Southeastern Pennsylvania Transportation Authority, have said they may have to make service cuts if they do not receive more funding in the fall.