Pennsylvania’s Governor Josh Shapiro gave his annual budget address today, announcing a plan to spend $51.4 billion dollars.

“Today I can report that Pennsylvania is on the rise,” Shapiro said in his opening remarks.

The address was given on the House floor, with both representatives and senators present. Shapiro spoke for over an hour and a half, working through dozens of topics point by point.

“From education to health care to housing to economic development to job creation. It makes the right investments at the right time,” Sen. Vincent Hughes (D-Philadelphia) said, the Democrat appropriations chair in the Senate.

The budget increased funding in areas like education and workforce development.

Shapiro proposed funding increases and policy solutions to areas like housing and rural healthcare.

Several community leaders from Erie made the drive down to Harrisburg, and sat on the House floor for the address.

"Hearing what Governor Shapiro had to say today, specifically around housing, workforce development, child care—  those are a number of initiatives that we really think we're going to be able to hopefully leverage in Erie for a lot of our transformational projects,” Kim Thomas said, executive director of Infinite Erie.

Housing specifically piqued Thomas’s interest, as one of Infinite Erie’s projects is the Housing First Erie Initiative.

“We will be expanding those efforts to really look at attainable housing, affordable housing, workforce housing,” Thomas said. "So hearing the Governor today propose $50 million to make sure that the Commonwealth's antiquated housing stock is sustainable and up to par is certainly a start in the right direction.

Members of the Erie Chamber, as well as Erie Insurance President & CEO Timothy NeCastro also came down for the address.

“Demonstrating unity coming from our community to Harrisburg together has been a very powerful force,” NeCastro said, “In terms of being able to raise grant dollars and other funds to come in and invest in our community. So we want to have a show of strength here today."

Past spending increases and policy changes, the Shapiro administration wants to speed up the reduction of the corporate net income tax, as well as reform other taxes as the Commonwealth tries to attract business growth.

While tax cuts reduce revenue, Shapiro says legalizing adult use cannabis and regulating skill games— both proposals included in previous addresses— will help contribute new revenue.

Erie’s Rep. Pat Harkins (D) is chair of the House Gaming committee and will play a key role in negotiations this year.

"These places are running rampant in a lot of these communities, so we have to address that,” Harkins said.

Shapiro’s $51.4 billion proposal spends $4.5 billion more than what the state is projected to collect in revenue next year. Lawmakers would have to use the $10.4 billion in the state’s savings and surplus funds to cover the difference.

There is only $2.9 billion of state surplus money left. These are one time dollars the state collected during the Pandemic. The federal government gave extra money to state governments and also flooded the economy with cash, leading to increased sales and income tax revenue for the states. Shapiro’s proposed budget would drain the surplus fund, then pull $1.6 billion from the state’s rainy day savings fund (a fund that was also built up because of pandemic spending and cash flow). 

Republicans say the proposal is irresponsible.

"If they're serious on some of their priorities that are important to them, that we might be able to find common ground on,” Sen Scott Martin said, Republican appropriations chair for the Senate, “For the love of God, work on closing our structural deficit. And we'll work with you on different things."

Senate Republicans also said if Shapiro wants to see the more controversial cannabis and skill game proposals come through, he should take a lead in negotiating a deal.

This was Shapiro’s 3rd budget address, kicking off the second half of his four year term. With re-election in 2026, and a potential presidential run in 2028, what the Montgomery county native can accomplish in these next two years will set the stage for those campaigns.