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During his first budget speech before a joint General Assembly, Gov. Shapiro proposed increasing the state’s investment in its workers, businesses, and students.

In his first speech before Pennsylvania lawmakers, Gov. Josh Shapiro highlighted promises he made on the campaign trail and proposed a “common sense budget that speaks to the needs of all Pennsylvanians.”

Addressing a joint session of the House and Senate late Tuesday morning, Shapiro promised to repay voters’ trust by showing that “government can be a positive, productive force for good.”

Shapiro’s budget includes roughly $1 billion in new money for public schools, additional funding for women and minority-owned businesses, and more generous property tax and rent subsidies for the elderly and people with disabilities.

Shapiro’s budget proposal comes as Pennsylvania keeps taking in robust tax collections, leaving it with $11 billion in reserve cash..

Spending would rise modestly under Shapiro’s budget, which does not include any increases in income or sales taxes, the state’s two main sources of revenue.

Relying on conservative revenue forecasts, Shapiro said his administration is prepared to weather difficult fiscal times, while also making “investments to build an economy that works for everyone, to create safe and healthy communities, to ensure that every child receives a quality education and to protect real freedom.”

All told, Shapiro’s budget plan for the 2023-24 fiscal year that starts July 1 boosts spending to $44.4 billion, an increase of almost 4%.

It will require approval from the Democratic-controlled House and the Republican-controlled Senate.

Here are the key areas Shapiro’s proposed budget focuses on investing in:

Affordability

Shapiro is proposing to eliminate taxes of 11% on mobile phone service — a promise he made during last year’s campaign. 

The governor also wants to use surpluses from the Pennsylvania Lottery to increase property tax and rent subsidies for the elderly and people with disabilities. Under Shapiro’s plan, the maximum rebate would expand from $650 to $1,000, while the annual income eligibility cap would rise from $35,000 for homeowners and $15,000 for renters to $45,000 for both.

Many of our neighbors are being crushed under a mountain of rising prices, most of which are out of their control,” Shapiro said. “And let’s be frank, a lot of it is out of our control as well. But that doesn’t mean we shouldn’t try to help. There are common sense solutions we can implement to take some of that burden off their shoulders.”

Businesses

In addition to lowering costs for residents, Shapiro said the state needs to lower costs for businesses so that they can “create more jobs, hire more workers, and pay them a higher wage.”

His budget proposes a 50% increase in the Manufacturing Innovation Program, which connects the commonwealth’s universities with businesses to find new solutions and spur innovation.

It also includes sustainable state funding for the Historically Disadvantaged Business Program which benefits women and minority-owned businesses. 

Shapiro’s budget significantly increases funding for main street businesses, or small mom-and-pop shops, as well through the Keystone Communities Program.

Shapiro also said he wants to be a cheerleader to attract new high-tech firms and slash the state’s corporate net income tax rate, a move that would save businesses billions of dollars.

That pledge comes as Pennsylvania competes for a federally funded hydrogen hub and tries to attract the kind of multibillion-dollar battery plants and microchip factories that other states are landing.

“Whether folks in this room like me or not, the one thing I hope you can all agree on is that I’m competitive as hell – and I’m sick and tired of losing out to other states,” Shapiro said. “I’m asking you to believe in us and our businesses, workers and students and make these investments so we can bring more innovative business to Pennsylvania and create thousands of new good-paying jobs.”

Workers

Workers need protections too, Shapiro said. Included in his budget is funding to hire a new class of labor law compliance investigators so “we can make sure every employer follows the law and treats their workers with dignity and respect.”

Shapiro raised another pledge he made on the campaign trail and asked lawmakers to increase the minimum wage to $15 an hour next year from the federal minimum of $7.25.

He also said he will push for financial incentives to help address complaints from school boards, police departments and hospitals about the growing difficulty in filling critical positions in public safety, health and education. Shapiro proposed a three-year tax incentive of up to $2,500 a year for newly certified teachers, police officers, and nurses.

Education

Perhaps the most prominent feature of Shapiro’s budget is what he said would be a “down payment” on the billions of dollars that are necessary to comply with a court decision that found Pennsylvania’s school funding system violates the constitutional rights of students in the poorest districts.

He is proposing an increase of $567 million — or about 7% more — for day-to-day school operations, plus more funding for special education, mental health counselors, anti-violence grants, and the removal of environmental hazards in school buildings like mold, lead and asbestos.

In addition to boosting school funding, Shapiro has said he wants to put a mental health counselor in every school building and pump more money into subsidies for child care, local civic improvement projects, university research on cutting-edge manufacturing and STEM programs in schools.

Public Safety

Creating safe communities starts with ensuring police departments are well-staffed, well-funded, and well-equipped, Shapiro said. His budget proposes enough funding for four new cadet classes of the Pennsylvania State Police next year. 

“That’s nearly 400 new troopers who will protect and serve our commonwealth,” he said. 

Shapiro also wants to create the Public Safety and Protection Fund which would be the dedicated funding source for the state police and would reduce its reliance on gas taxes.

Shapiro’s budget also proposes investing $36 million in funding for equipment, training, and salaries for firefighters and first responders.

“Government can and should be a force for good in our lives,” Shapiro said. “We can do big things again – if we work together.”