Governor Shapiro’s 2023 Budget Adress & RGGI Funding

Governor Shapiro gave his maiden budget address last week, proposing $44.4 billion in spending for the upcoming fiscal year. One line item that was in the budget documents (but about which he did not speak) was projected revenue more than $650 million from RGGI proceeds. This cap-and-trade program addressing fuels used for electric power generation was the centerpiece of the environmental legacy of Governor Wolf. The proceeds of RGGI would be used for environmental measures (such as monies to support electrification efforts).

Shapiro expressed reservations about RGGI in last year’s election in part because of strong union opposition to the plan. The full implementation of RGGI has been delayed due to challenges in the state courts. Speculation is that a decision may be soon handed down regarding the constitutionality of the measure with the primary issue being the process by which RGGI was implemented without approval by the General Assembly.

If RGGI is struck down by the courts, Shapiro will be advocating for climate control measures to reduce greenhouse gasses in discussions with the Senate Republicans who have adamantly opposed RGGI.

If the court does not knock out RGGI, the Senate Republicans (who have already formally requested the Governor pull the state out of the program) will still be at negotiating table in that scenario pushing the Governor to end RGGI. In either scenario, alternative climate change measures would most certainly be on the table. These evolving circumstances have put groups representing all fuel industries on high alert in terms of attempting to impact the direction these policy discussions will take.

The proposed 2023-24 Commonwealth Budget: