House and Senate lawmakers held their first rounds of appropriations hearings last week to examine the governor’s spending proposal and key policy priorities. Appropriations hearings are a key component of the annual state budget process. The constitutional deadline for the General Assembly and governor to reach a budget agreement is June 30; however, several recent budget agreements have taken longer to finalize.
Committee lawmakers heard testimony from several state agencies last week, including:
- Department of Community and Economic Development (DCED)
- Pennsylvania Department of Transportation (PennDOT)
- Pennsylvania Higher Education Assistance Agency (PHEAA)
- Pennsylvania State System of Higher Education (PASSHE)
- Department of Revenue (DOR)
- Department of Health (DOH)
Below are relevant highlights for the business community.
- DCED: Lawmakers questioned the administration’s plan to grow Pennsylvania’s energy sector and expressed concerns that the governor’s proposal would not help the industry reach its potential to create jobs and lower energy costs. Concerns also centered on the governor’s proposed $15 minimum wage, with critics warning it could increase costs for small businesses and lead to job losses.
- Revenue: The state’s fiscal outlook was a major topic, with lawmakers noting that revenue projections are not aligning with spending. The administration’s push to legalize recreational marijuana raised concerns about tax administration and potential workforce impacts. Lawmakers also discussed the long-term sustainability of the Lottery Fund, which supports senior programs, amid questions about regulating and taxing skill games.
- PennDOT: Lawmakers debated the administration’s proposal to redirect $1.74 billion in Sales and Use Tax revenue to mass transit, expressing concern that most of the funding would benefit Philadelphia at the expense of other regions. They also scrutinized toll collection practices and the continued use of Motor License Fund dollars to fund the State Police. There was bipartisan support, however, for investing in infrastructure, including roads, bridges, ports, and multimodal projects.
Next week, the PA House and Senate Appropriations Committees will hear from:
- Department of Labor & Industry (L&I)
- Department of Environmental Protection (DEP)
- Department of Education (DOE)
- Office of the Attorney General
- Department of Agriculture
For the full schedule of budget hearings, visit the PA General Assembly’s website.