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PA leaders mull tax cuts and revenue increases, but K-12 education spending looms large in budget debate

Three months after Gov. Josh Shapiro proposed a $48.3 billion state budget there are new political-financial dynamics in play, but the question of whether to spend $1.1 billion more on K-12 education next year remains a central consideration for lawmakers.

One new wrinkle is a proposed multi-billion dollar tax cut that has drawn major bipartisan support. Another is continued good news on tax collections: Revenue Secretary Pat Browne recently said collections 10 months into the fiscal year are $739 million greater than anticipated and “have us in a strong position.”

Both dynamics deepen the context for Mr. Shapiro’s $1.072 billion proposed increase for basic education funding. On Wednesday — eyeing the six-week stretch before the June 30 fiscal year-end — Mr. Shapiro, a Democrat, was asked about the Republican-driven tax cut plan and the first funding item he mentioned was education.

“I can tell you there has been some constructive dialogue going on,” Mr. Shapiro told an audience in Lancaster, where he promoted part of his proposed budget. “There will have to be a broad package that is going to have to pass a Democratic House and a Republican Senate, and that is going to require all of us to compromise.”

The details of his K-12 education proposal are rooted in a report produced by the 15-member Basic Education Funding Commission, which met throughout the second half of 2023 to create a proposed overhaul of how the state funds basic education. Its work followed a Commonwealth Court ruling that found the current funding system unconstitutional.

The commission called for annual increases in basic education funding formula spending of at least $200 million a year; identified a need for a separate $5.1 billion in state spending increases, over time, to fill an “adequacy” gap in school funding; and also called for about $1 billion in “tax equity” supplements to certain districts.

The report recommended a phase-in of the massive spending increases over seven years.

Mr. Shapiro’s proposal for a $1.072 billion increase in 2024-25 is the first chunk. It includes a $200 million increase in traditional basic education money and $872 million for a first-year “adequacy” investment.

“It is imperative for us to fulfill the Commonwealth Court’s directive that we adequately fund our schools,” state Sen. Jay Costa, D-Allegheny and the top Democrat in the Senate, said Thursday. Mr. Costa said he supports Mr. Shapiro’s full K-12 spending recommendation for 2024-25.

“We are committed to year one funding along those lines,” Mr. Costa said.

The approval of the commission report was split. None of the six Republicans on the 15-member panel voted for it.

Instead, they backed their own “minority report,” and one of their members was state Bedford County Rep. Jesse Topper.

The dollar amounts in the majority report, he said, came from “advocates who pursued a lawsuit on fair funding.” Mr. Topper said the state should first set out “what are we going to spend the money on” and then “what are the appropriate amounts we can lay out to achieve those goals.”

Mr. Shapiro’s proposal, if adopted, would infuse many school districts with serious new money. A memo filed by House Democrats that summarizes forthcoming bills to implement the plan included a chart that showed — among others — total basic education funding increases for next year for Woodland Hills School District of $5.5 million; McKeesport Area, $4.8 million; Baldwin-Whitehall, $4.7 million; and Penn Hills, $4.5 million.

The proposal to reduce the state income tax by nearly 9% and get rid of a tax on electric bills, meanwhile, came from Senate Republicans. It came to public attention on May 6 and got final passage in the Senate the following day — with eight Democrats joining all Republicans to pass it.

The Republican leader in the Senate, Joe Pittman of Indiana County, said each of the 500 school districts has “their own definition of what fair funding means.” Mr. Pittman pointed out that both the majority and minority commission reports agreed to modify the existing K-12 funding formula.

The state already has pumped “historic” amounts of money into basic education, he said, and “we will continue to look for ways to reach common ground and respect taxpayers as part of this year’s budget.”

The tax cut proposal now goes to the House.

Beth Rementer, a spokesperson for the leader of the Democratic majority, Rep. Matt Bradford of Montgomery County, said schools have been “woefully underfunded for decades” and Democrats have made it a top priority to reverse the “tragic” situation.

Ms. Rementer said the Republican-led tax proposal acknowledged the state has a “healthy” surplus of money, and House Democrats “are open to a mixture of investments and tax cuts to facilitate a decade of economic growth” led off by Mr. Shapiro’s moves.

Republicans have insisted on more accountability for any increases in education spending. Rep. Mike Sturla of Lancaster, the Democratic co-chair of the funding commission, said Democrats can embrace the notion that new money must be used to create gains for students.

The concept, he said, might be, ‘When we give you this money, you can’t go spend it on an astro-turf football field. You have to spend it on things that produce educational results.’

A spokesperson for House Republicans, Jason Gottesman, said, “As we hope budget discussions will begin soon, we agree with the Senate that the best thing we can do is cut taxes so we can return the significant contributions that have been made in the Commonwealth by Pennsylvania’s families and small businesses.”

(c)2024 the Pittsburgh Post-Gazette Distributed by Tribune Content Agency, LLC.

Source: Berkshire mont

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