Scavello: General Assembly Approves State Budget that Holds the Line on Taxes, Boosts Rainy Day Fund, Supports Schools

HARRISBURG – The Senate approved a 2021-22 state budget Friday that supports Pennsylvania’s economic recovery from the COVID-19 pandemic, while providing a financial safety net for the future, according to Senator Mario Scavello (R-40), who voted for measure.

Senate Bill 255 now goes to the governor’s desk for enactment into law.

“This is a fiscally responsible budget that respects taxpayers, supports schools and puts Pennsylvania on the path to recovery,” Scavello said.

The fiscally responsible budget does not include any of the tax increases proposed by the governor in February — including a 46% Personal Income Tax hike.

The spending plan includes $300 million more for Basic Education Funding, $50 million more for Special Education, $25 million more for Pre-K programs and $5 million more for Head Start.

It also includes $43.5 million for career and technical centers, part of $500 million of federal funding will help to ensure schools reopen safely, sustain safe operation and address student needs resulting from the pandemic.

While Pennsylvania is on pace to end the current fiscal year with $2.5 billion in surplus revenue, revenue projections for the current fiscal year were made as Pennsylvania was coping with the financial devastation caused by the global pandemic and the governor’s business closure orders.

Despite a significant rebound in revenues and the availability of federal stimulus funds to help balance the budget, lawmakers must remain vigilant and pragmatic because Pennsylvania’s mandated spending growth still outpaces its revenue growth and the Commonwealth cannot depend on continued federal funding.

The budget provides a three-tier approach to create a strong financial safety net for coming years:

  • All $2.5 billion in surplus FY 2020-21 funds will be allocated to the Rainy Day Fund, augmenting the current $240 million balance in that account.
  • $2.5 billion in projected surplus revenue from FY 2021-22 will be used to balance next year’s budget.
  • $2.6 billion of remaining federal funding will also be used to help balance next year’s budget.

The budget allocates $279 million in federal funding to support highway and bridge improvement projects. This will enable the Commonwealth to address its deteriorating transportation network while supporting employers and creating family sustaining jobs.

A total of $282 million in federal money is directed to supporting Pennsylvania’s nursing homes ($247 million) and assisted care facilities and personal care homes ($30 million), many of which were severely impacted by the COVID-19 pandemic. In addition, $5 million will provide for ventilation improvements.

“It’s critical that Pennsylvania transition from the crisis mode of the pandemic, to one of long-term planning and sustained job growth,” Scavello said. “This budget not only prevented the governor’s massive tax hikes, it also sets state money aside in the Rainy Day fund and spreads out federal relief funds to prevent future tax increases.”

Contact: Christine Zubeck czubeck@pasen.gov (717) 787-6123