HARRISBURG – The Senate approved a $45.2 billion General Fund Budget for Fiscal Year 2022-23 that meets the needs of Pennsylvanians today without creating multi-billion-dollar budget deficits in the future, according to Sen. Dan Laughlin (R-49), who voted for the measure.
Senate Bill 1100 now goes to the governor’s desk for enactment into law.
The $45.2 billion budget, which also includes federal American Rescue Plan Act (ARPA) funds, represents a 2.9% increase over the previous year’s spending – and $500 million less than Gov. Tom Wolf’s original budget request.
The budget agreement does not include any broad-based tax increases and is structured in a way to minimize the risk of tax increases in the years ahead.
In fact, the budget actually cuts the Corporate Net Income (CNI) tax rate from 9.99% to 8.99% and creates a phased reduction to 4.99% by 2031, moves designed to attract employers and residents to Pennsylvania.
As important as the economic boost provided by this plan, which will have a projected ending balance of $3.6 billion, the 2022-23 budget includes a $2.1 billion transfer to the Rainy Day Fund, bringing the total balance to nearly $5 billion.
These fiscally responsible steps are critical because many economic indicators are showing a risk of a recession on the horizon. Most recently, Pennsylvania’s Independent Fiscal Office estimated a 60% chance of economic stagnation or a “growth recession” happening, and a 30% chance of a recession.
The budget includes a $525 million increase for Basic Education Funding; $225 million to provide additional support for the state’s 100 poorest school districts, which includes Erie City School District ($6.67 million) and Northwestern School District ($205,827) in Erie County; a $100 million increase for Special Education funding; an additional $60 million for Pre-K Counts; and $19 million more for Head Start Supplemental Assistance.
Increased funding is also dedicated in this year’s budget to ensure our schools are safe and secure: $100 million is appropriated for the Ready to Learn Block Grant program to address school-based mental health; and $100 million in funding is directed to a new General Fund appropriation for School Safety and Security to address physical safety and security at schools.
The budget includes funding for a variety of higher education options, including $2.9 million for Erie County Community College.
Inflation is driving up the cost of everything, including housing, both owned and rented. This budget directs $540 million in ARPA funding to help our most vulnerable and low-income residents by funding affordable housing construction programs, offering additional home repair assistance and bolstering the Low Income Home Energy Assistance Program and the Property Tax/Rent Rebate Program.
Water quality and infrastructure continue to be top concerns in Pennsylvania. To address water quality, $220 million in ARPA money will be transferred to a new Clean Streams Fund – championed by Laughlin – that will be focused on mitigating “non-point” sources of pollution, such as agricultural runoff and acid mine drainage. Another $320 million will be targeted at local community water infrastructure, with the money transferred to Pennsylvania’s Commonwealth Financing Authority to help fund water and sewer projects around the state.
Additionally, interest in outdoor recreational opportunities continues to grow in Pennsylvania. The FY 2022-23 budget includes $56 million in state dollars to create a new State Parks and Forests Infrastructure Program, as well as $100 million in ARPA funding to be used for state parks and outdoor recreation.
Contact: David Kozak dkozak@pasen.gov