dfd
In a big win for Pennsylvania families and businesses, the state’s long budget standoff ended with a deal that includes huge wins for taxpayers. There were no tax increases in the budget, and the state will not be part of the Regional Greenhouse Gas Initiative (RGGI) – an out-of-state administered carbon tax scheme. RGGI adds hundreds of millions of dollars in costs to energy bills each year in states that participate.
The budget impasse lasted 135 days, with Governor Josh Shapiro signing the new budget bill into law on November 12th.
Given the razor-thin split in control of the legislature between Democrats and Republicans, the budget is a compromise between both parties. However, in addition to exiting RGGI and avoiding tax hikes, Republicans were able to curb the massive spending spree initially proposed by Gov. Shapiro and squeeze out concessions that were originally not on the table.
“By removing Pennsylvania from the northeastern carbon tax scheme known as the Regional Greenhouse Gas Initiative, and avoiding any tax increases to fuel Gov. Shapiro’s reckless spending, Republicans have pulled off a near miracle in the state budget,” said Americans for Tax Reform President Grover Norquist. “Taxpayers should send an extra holiday card to Senate President Pro Tem Kim Ward, Majority Leader Joe Pittman, Appropriations Chair Scott Martin, Finance Chair Scott Hutchinson, House Republican Leader Jesse Topper and many more.”
Republicans had to concede their $49.9 billion budget cap, with the final budget being $50.1 billion. This is a 4.7% increase from the budget last year. However, the Republicans were able to decrease the budget from its original $51.5 billion price tag, a $1.4 billion reduction. Most notably, Pennsylvania’s rainy-day fund will go untouched, and no new taxes are added. This was a key win for the Republicans, who were concerned over massive tax hikes on online gaming and sports gambling.
Pennsylvania will continue to lower corporate taxes. The state’s enacted plan to gradually lower the rate to 4.99% was under question given the spending demands from Democrats. The rate will drop from 7.99% to 7.49% in January 2026, keeping Pennsylvania on the right track. Republicans were also able to pass massive permitting reforms to create a more expedient process. The reforms make Pennsylvania more competitive economically.
Hotly debated topics also included school funding and school choice. Pennsylvania Senate Republicans were able to secure:
This is a big win for school choice in Pennsylvania and will assist in the ability for students to receive a better education.
Pennsylvania ending any chance of participation in the Regional Greenhouse Gas Initiative (RGGI), a corrosive carbon tax, was unexpected and welcome. RGGI would have added more than a billion dollars in new electricity taxes in total. Former governor Tom Wolf ordered the state to join the scheme without approval from the legislature, which led to long and fierce legal disputes. Pennsylvania already was in line with the emissions reductions of states that participated in RGGI, thanks to its expansion of its natural gas industry which lowered emissions while creating jobs and growth. The State is a net exporter of energy mostly from its natural gas industry. By eliminating the RGGI, Pennsylvania can fully utilize its natural gas industry.
This battle has been a win for Republicans with key concessions made by the Democrats. The fact that Senate Republicans were able to hold the line and keep the rainy dayfund off the table and not add any new taxes is a huge win. However, even though Pennsylvania Republicans were able to fend off the massive tax and spending push by Democrats this budget cycle, much work needs to be done in the future.
