Governor Shapiro Signs $47.6B State Budget
On July 11, Governor Shapiro signed the 2024-2025 Pennsylvania state budget into law. The $47.6 billion plan is a 6% increase over the previous 2023-2024 budget. Most of the new funding will be directed towards education, workforce, and healthcare which took the spotlight in policymaker negotiations leading up to the budget approval. The General Assembly will now recess until late September.
The budget is passed along with the fiscal code commonly called the “trailer” bill which provides substantive language implementing that budget. The Governor signing the budget into law prompted two significant programs of interest to PPA members.
DEP Permitting Reform
As part of the comprehensive amendments to the state’s Fiscal Code, the measure includes an overhaul of the permitting process for land, air and water-related permits required by the Department of Environmental Protection (DEP) and county conservation districts for development. The reform language includes key elements from a bill the pass the Senate earlier this year along with components of Governor Shapiro’s 2023 executive order. More details on the reform can be found here.
Agriculture Innovation Fund
Part of the Governor’s original 2024 budget proposal, the Agriculture Innovation Fund would provide significant funding opportunities for farm related projects. The provisions of the program would make available grants for the construction upgrading of biofuel facilities (up to $2M annually per project). These grants would be competitive in that there will be many entities seeking these funds -including industries in the renewable natural gas (RNG) space.
Other Bills Passed Last Week
The annual budget negotiation also includes a flurry of contingent legislative activity connected to the broader spending plans. Click here to view a list of industry related legislation passed by the General Assembly last week and is now waiting for the Governor’s signature.
What’s Not in the Budget
The final state budget is also notable for what it doesn’t include.
Governor Shapiro’s Energy Plan
The Governor had proposed two major energy programs earlier this year. Click here to learn more. Neither PACER (a revised version of RGGI) and PRESS (overhaul of the state’s Alternative Energy Portfolio Standard) had any legislative committee action in the past few months. The Governor however did achieve a win by the passage of a system that would allow for the develop of regulations to govern carbon capture products and the development of federally finance hydrogen hub projects.
Skill Game Regulation and Taxation
Both the Governor and Senate Majority Leader Pittman supported the regulation and taxation of skill games. The original budget proposal from the Governor anticipated tax revenues of up to $315 million per year from skill games. The skill game industry and the PPA were also in support of the concept, wanting to have the question of the legality of the games settled once and for all. However, the intense opposition to the plan by the state’s casino industry defeated the effort.
Last month, the State Supreme Court agreed to hear an appeal by the PA Attorney General to overturn a Commonwealth Court decision that ruled skill games are not subject to the state’s gaming laws. The Commonwealth Court agreed with the industry that the games have an element of skill, not just chance.
In the final days of the session, PPA expressed its opposition to a proposal that had surfaced in the talks that would have limited skill games to businesses currently holding liquor licenses. In the end, the subject of skill games was not addressed in the final budget.
Legalized Adult-Use Marijuana
Governor Shapiro originally proposed a 20% state tax on marijuana sales with an anticipated $250 million in annual state revenue but this did not find its ways in to the final budget. This comes amid heightened discussions about legalization cannabis in the legislature, with hearings, bill introductions and press conferences urging a policy change similar to surrounding states.
Minimum Wage Increase
Although being pushed by the Governor and the House Democrats as a deal for a tax cut reduction proposal (the Senate Republicans proposed a $3B tax cut in May), a minimum wage increase to $15 per hour was not adopted.
