On July 5th, the PA House voted to concur on a state budget bill the Senate passed the week before. The House vote came after Gov. Shapiro released a statement vowing to line-item veto a $100 million educational scholarship program negotiated by Senate Republicans and his administration. As of this writing, however, the path to a finalized budget agreement remains unclear: The budget bill cannot be sent to the Governor for his approval until it is signed in the Senate, which isn’t scheduled to return to session until Sept. 18; The House and Senate must still reach an agreement on various code bills that are passed in conjunction with the budget and dictate how funding is allocated; Additionally, other budget-related bills, like funding for Pitt, Penn State, Lincoln, and Temple remain unresolved. Below, find key highlights from the budget bill and elements important to the business community: Total Spend Total General Fund spending of $45.5 billion for Fiscal Year 2023-24, representing a 6 percent increase in state spending over last year. Spends nearly $400 million less than what Gov. Shapiro proposed in March, and $1.5 billion less than what the House passed in early June. Makes a $500 million deposit into the Rainy-Day Fund, bringing the fund to over $5.6 billion. Tax Changes Maintains the current phase-down schedule of the Corporate Net Income Tax (CNI), from 8.99 percent to 8.49 percent in 2024. The Department of Revenue will receive an increase of more than $17 million for Technology and Process Modernization to complete system upgrades. Expands eligibility and maximum rebates under the Property Tax Rent Rebate Program for seniors and persons with disabilities. Education Funding Adds roughly $800 million in new K-12 public education funding. This includes: $567 million more for basic education subsidies. $100 million more for “Level Up” supplements for low-income school districts. $50 million more for special education Includes $125 million for school safety grants and $100 million for student mental health. As previously noted, the budget as passed by the Senate contained $100 million for Pennsylvania Awards for Student Success (PASS) scholarships – providing students in the lowest 15 percent performing schools with financial assistance to attend a private or parochial school. Gov. Shapiro reversed course and announced his intention to line-item veto this funding. Senate Republicans say the budget also includes a $150 million increase for the Education Improvement Tax Credit (EITC), however this will need to be enacted in subsequent legislation. Infrastructure Continues the phase-out of State Police funding from the Motor License Fund with a goal to fully phase down by 2026-27. The reduction this year will be $125 million. Provides $1.7 million within the Department of Environmental Protection (DEP) to support improvements to the permitting process. Allocates $112 million in royalties from oil and gas drilling on state game lands for State Park and Forest Infrastructure Projects, double the amount that was allocated last year. Workforce Increases the Department of State’s operating budget by $3.2 million, which includes funding for occupational boards dedicating funds to licensure system modernization and upgrades. A nearly 50 percent increase in Child Care Services to help low-income families afford childcare. Includes increases for existing workforce development programs, including a $14 million, or 13.3 percent, increase for career and technical education and a $3 million increase to the apprenticeship training program through the Department of Labor and Industry (L&I). A $3 million appropriation to the Foundations in Industry program through the Department of Community and Economic Development (DCED) will increase apprenticeship and pre-apprenticeship programs. A $3.5 million appropriation to the Schools-to-Work program through L&I will support partnerships between career and technical education students and employers. What’s Not In Governor Shapiro had proposed a $15/hour minimum wage, which is not included in the budget. The governor also proposed legalizing recreational marijuana, which is not included either.