Governor Shapiro's Proposed FY 2024-25 PA Budget

Governor Shapiro gave his budget address to the PA General Assembly on February 6, 2024.  While there are no broad-based tax changes proposed by the Governor there are several proposed initiatives that would affect the PA business environment, including programs in economic development, workforce training, and education.

The following are taken from the budget address documents released by Governor Shapiro’s office.

Economic Development:

The governor has proposed a comprehensive economic development strategy that includes $600M in new FY 2024-25 spending.  Included in the $600M are:

• $500M for PA SITES funding to bring commercial and industrial sites in PA online for development.
• $25M for the Main Street Matters program that supports small businesses and commercial corridors.
• $20M for large-scale innovation to leverage PA research and development assets.
• $3.5M for the creation of the Pennsylvania  Regional Competitiveness Challenge.

Workforce Training:

The governor’s proposed budget increases spending in workforce training programs such as Career and Technical Education, Vo-Tech, and the Military Occupational Crosswalk.  The budget also proposed leveraging federal funding from the Infrastructure Investment and Jobs Act(IIJA) and the Inflation Reduction Act (IRA) for organizations working on infrastructure projects to receive a $40,000 per worker credit for new workers who are trained to accelerate infrastructure projects.

Education: 

K-12

• $1.1B increase in basic education funding
  • $900M in a first-year adequacy investment
  • $200M distributed through the Basis Education Funding Formula
• Among other increases: $300M for environmental repair projects in school buildings.

College and Universities

• Combine the universities in the PASSHE and the 15 PA Community College under one governance system.
  • $975M appropriation to the new governance system
• A 5% increase in fund for state-related universities(Pitt, Penn St., Temple and Lincoln).
• $279M annually of PA students attending in state schools.

Revenues:

While no broad-based tax changes were proposed by Governor Shapiro additional revenues are budgeted from an increase in the state minimum wage to $15/hour ($9/hour for tipped workers) that take effect on January 1, 2025; and sales of adult use cannabis that would begin on January 1, 2025.

FY 2024-25 begins July 1, 2024.  The Governor and PA Legislature have until June 30, 2024, to pass a balanced budget.

About Schneider Downs Tax Services 

Schneider Downs& tax advisors have experience and expertise in a wide range of industries, including Automotive, Construction, Real Estate, Manufacturing, Energy & Resources, Higher Education, Not-for-profits, Transportation and others. Our industry knowledge and focus ensure the delivery of technical tax strategies that can be implemented as practical business initiatives.  

To learn more, visit our dedicated Tax Services page.