What’s in the Fiscal Code Bills?

When the Pennsylvania Senate reconvened on Aug. 30, Senators passed two separate fiscal code bills designed to advance the budget process and drive out the approximately $1.1 billion in state funding that still awaits authorization after Gov. Josh Shapiro signed the main state budget earlier that month.

The larger of these two bills, House Bill 1300, designates funding for a wide array of state programs. It authorizes certain fund transfers and directs support for education, healthcare, and emergency services.

House Bill 1300 provides $295 million in Ready-to-Learn Block Grants for school districts across Pennsylvania, which supporters are calling a crucial step toward supporting quality education and empowering innovation at the local level. The bill also designates $261 million in state aid for community colleges, a two percent increase over last year’s funding levels.

Moreover, House Bill 1300 extends $65.4 million in funding to the Pennsylvania State System of Higher Education (PASSHE) for early repayments on existing debt associated with campus buildings at the Penn West trio in California, Clarion, and Edinboro. The bill also ties state aid for PASSHE to a tuition freeze for academic years 2032-24 and 2024-25, aiming to alleviate the financial burden on students and promote access to higher education.

Additional educational allocations include $70 million in state aid for libraries; $14.5 million in funding for career and technical programs; and $11 million in grants for school safety initiatives in non-public schools. The bill also empowers the Pennsylvania Department of Education to direct up to $7 million in undistributed funds toward school districts under financial distress.

House Bill 1300 also makes notable investments in health and public safety. The bill designates $20 million for counties to support mental health services and increases the state trooper complement by around 400 troopers, up to 4,410, to bolster law enforcement capabilities.

Furthermore, the legislation helps ensure fair compensation for first responders by adjusting state reimbursement rates to the greater of Medicare or Medicaid rates. House Bill 1300 also provides certainty to nursing care facilities by requiring the Department of Human Services to base each facility’s case mix rate on the data used to determine rates for Fiscal Year 2022-23.

Other provisions include the redirection of $150 million from the Game Fund, created by oil and gas drilling rent and royalty payments on state game lands, to the Clean Streams Fund. The bill also raises the payment in lieu of taxes which several state agencies make to rural municipalities to $2.40 per acre and transfers $31 million from the Medical Marijuana Program Fund to the General Fund, reallocating resources to support broader state initiatives.

The other bill the Senate passed on Aug. 30, Senate Bill 757, focuses on two majority caucus priorities excluded from Gov. Shapiro’s enacted budget: the creation of the Pennsylvania Award for Student Success (PASS) scholarship program and an expansion of the Educational Investment Tax Credit (EITC).

Several priority issues Democrats raised in budget talks – including $100 million in supplemental funds for the state’s 100 poorest schools, $10 million in stipends for student teachers, $100 million for school mental health services, and $175 million for the Whole-Home Repairs program – received no allocation under either bill. It is likely these programs will remain a focal point when the House returns to session.

2023-24 State Budget Rundown

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.


  • 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.


  • 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).
  • $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.

PA Must Prioritize the Economy in State Budget

HARRISBURG – Pennsylvania Chamber of Business and Industry President and CEO Gene Barr issued the following statement in response to Gov. Tom Wolf’s 2022-23 budget proposal.


“Governor Wolf’s final budget proposal comes at a time when higher than anticipated revenue collections and an influx of billions of dollars in unspent coronavirus relief funding should be used to strategically invest in pro-growth initiatives that will benefit the state’s employers and all Pennsylvanians as we continue to emerge from the pandemic.


“The PA Chamber applauds Gov. Wolf’s proposal to reduce the state’s Corporate Net Income Tax rate, which is the second-highest flat rate in the nation and a major red flag to potential investors. Our excessively high CNI rate was certainly a major factor in PA failing to get any consideration for the $20 billion investment that Intel announced for Ohio. This comes on the heels of PA’s failure to attract two major steel manufacturing facilities –  each one being a $1 billion investment – that were not made in PA due to the CNI and excessive regulatory cost. We encourage lawmakers to stay true to the principles of competitiveness, fairness, and predictability and advance substantial, long-overdue tax reform for businesses of all sizes. We are also urging policymakers to address the Commonwealth’s unemployment compensation debt head-on, thereby avoiding a tax increase on all of the state’s job creators.


“We appreciate Gov. Wolf’s focus on helping low-income families. Rather than simply raising the minimum wage, we urge a more modern and strategic approach to target support to the less than 1 percent of Pennsylvania workers who are low-income minimum wage earners.


“The PA Chamber is committed to advancing policies that will help employers as they emerge from the pandemic, encourage them to invest and create jobs here and attract new and emerging industries to the Commonwealth. The PA Chamber will continue to work with lawmakers to pursue a public policy agenda to advance our state’s competitiveness through tax reform; workforce development and career readiness; flexibility in energy markets; balanced labor laws; and responsible state spending.”

Reducing the Corporate Net Income Tax is a Win for Pennsylvania Businesses

HARRISBURG – The PA Chamber of Business and Industry, The Chamber of Commerce for Greater Philadelphia, and The Greater Pittsburgh Chamber of Commerce, an affiliate of the Allegheny Conference, today applauded Gov. Tom Wolf’s call to reduce the state’s Corporate Net Income Tax rate, our organizations’ top policy priority. The business community has long advocated for such a reduction to improve the state’s overall competitiveness.


Few issues draw as much attention as a state’s tax climate for companies seeking to locate or expand operations. At 9.99 percent, Pennsylvania has the unfortunate distinction of having the country’s second-highest Corporate Net Income tax. The state’s disproportionately high CNI serves as a major red flag to potential investors and puts the Commonwealth at a distinct disadvantage as businesses look to other pro-growth states to open or expand operations.


While a reduction to the CNI rate has been long overdue, the chamber leaders express concern with the proposal’s subjective expansion of the state’s taxing authority, citing the need for clear, predictable standards for employers to follow.


“Pennsylvania continues to lose new business prospects and our best and brightest to other states,” said PA Chamber President and CEO Gene Barr. “Our excessively high CNI rate puts the state at a competitive disadvantage when it comes to attracting and retaining jobs and impedes investment and economic growth. The governor’s proposal to reduce state’s CNI is a positive step to improving the Commonwealth’s overall business climate and will help to ‘Propel PA Forward.’ As the budget process moves forward, we encourage lawmakers to keep a reduction in the CNI rate that has clear and concise parameters for the state and businesses to follow, at the forefront of negotiations.”


Matt Smith, president of the Greater Pittsburgh Chamber of Commerce, reinforced that “as regions look to recover and thrive in a post-pandemic world, we need, now more than ever, to ensure that the Commonwealth is competitively positioned to retain and recruit the businesses and talent needed to prosper. Through a meaningful reduction of Pennsylvania’s CNI rate, there is an opportunity to harness the Commonwealth’s fullest potential by making it more attractive to business investment, creating good-paying jobs, and contributing to the community vibrancy and opportunity that are essential to fueling talent attraction and growing our population.”


“High corporate net income taxes slows employment growth, reduces wages, and is a barrier to attracting new enterprises,” said Rob Wonderling, president and CEO of the Chamber of Commerce for Greater Philadelphia. “We applaud Governor Wolf for recommending a substantive reduction in the CNI and look forward to working with his administration and our legislative leaders in Harrisburg on passing real and meaningful tax reform legislation this session.”

As the 2022 budget process begins in earnest, the three chambers urge lawmakers to include this much-needed reduction in the CNI rate and prioritize policies that will promote economic growth.