Last Week in the Legislature: Budget Hearings Recap

During the second full week of state budget hearings, several administration officials weighed in on critical matters affecting public policy and the Commonwealth’s fiscal landscape. Testimonies from Labor & Industry Secretary Nancy Walker, Insurance Commissioner Michael Humphreys, Education Secretary Dr. Khalid Mumin, and Environmental Protection Acting Secretary Jesica Shirley highlighted proposals on proposed minimum wage increases, healthcare reform, education spending, permitting, and more.

Brief recaps of the budget hearings most relevant to the business community are below:


Labor & Industry

Pennsylvania’s Secretary of Labor and Industry Nancy Walker testified before the House Appropriations Committee last week and discussed several topics important to employers. Multiple lawmakers asked about Gov. Shapiro’s proposal to more than double the state’s minimum wage to $15/hour, for which Secretary Walker offered support. Several questions revolved around the state’s unemployment compensation system and Secretary Walker described areas of improvement since the pandemic.

Multiple exchanges focused on workers’ compensation including legislation supported by the PA Chamber to facilitate use of direct deposit for disability benefits – for which the Secretary indicated support – and solvency of the Uninsured Employer Guaranty Fund, an employer-financed program to cover workers compensation benefits in the event an employer is not covered.


Insurance Commissioner Michael Humphreys appeared before the House Appropriations Committee where he discussed the governor’s proposed changes to Pennie, the state-subsidized health insurance exchange. The governor proposed creating a new subsidy program to reduce premiums for those at risk of dropping out of the health insurance market. Humphreys cited rising premiums, inflation, and the loss of COVID-extended Medicaid coverage as reasons for the new program. The enhanced subsidies would be funded by existing assessments on insurers that currently fund reinsurance programs.

A one-time transfer of $50 million from the state Workers Compensation Security Fund would continue the reinsurance program for one year. The reinsurance program has been an important tool to stabilize the individual insurance market and mitigate large claims.  On the other hand, the PA Chamber has historically resisted transferring money out of the WCSF, an employer-financed program that pays workers compensation benefits in the event an insurance carrier becomes insolvent.


Pennsylvania’s Secretary of Education, Dr. Khalid Mumin, and his staff testified before the Senate Appropriations committee, focusing on the governor’s proposed $1.1 billion increase in K-12 spending and the plan to merge Pennsylvania State System of Higher Education (PASSHE) schools and community colleges. Secretary Mumin faced inquiries regarding the absence of K-12 spending increases in future years, citing guidance from the Basic Education Funding Commission report.

Senate Republicans raised concerns about the potential structural deficit resulting from the significant increase in K-12 spending. Senate Appropriations Committee Chairman Scott Martin (R-Lancaster) highlighted challenges in supporting bursting capacity of technical education centers and the lack of qualified instructors for programs like nursing. Chairman Martin also questioned the absence of specific educational opportunities in the budget, with Secretary Mumin deferring to Budget Secretary Uri Monson for clarification.

Lawmakers again raised questions about the lack of details in the governor’s higher education strategic plan, with Deputy Secretary Kate Shaw emphasizing the need to align education with workforce needs to address declining college enrollment and high costs. State-related university presidents also expressed support for the performance-based funding model laid out in the governor’s budget plan during their budget hearing before the House Appropriations Committee. The community college hearing focused on implications for local control, funding, and concerns about the new governing structure.

Environmental Protection

Permitting reform took center stage when Department of Environmental Protection (DEP) Acting Secretary Jessica Shirley testified before the House and Senate Appropriations committees. “Ever since I’ve been in the Senate, the delay in permitting and how permits are issued in Pennsylvania has been an issue,” said Sen. Gene Yaw (R-Lycoming), who chairs the Senate Environmental Resources and Energy Committee. Secretary Shirley discussed internal efforts to improve permitting and cited a 30 percent reduction in the departments permitting backlog month-over-month since December. She also told the committees that DEP’s budget request includes funding to hire 40 additional permitting staff and $7 million for IT upgrades around permitting. The PA Chamber has supported SB 350, which passed the state Senate last year and would enact meaningful permitting reform by streamlining the process and adding transparency.

Rep. Jim Struzzi (R-Indiana) asked for information regarding the DEP’s climate action plan released on February 20, which proposes an economy-wide carbon tax. He expressed concerns regarding the impact this tax would have on Pennsylvania’s energy and manufacturing sectors. Secretary Shirley said that the inclusion of an economy-wide carbon tax was for discussion and is not supported by the Shapiro Administration.


Founded in 1916, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.