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Pa. advances $50.8B budget that sends more money to poorest schools, skips difficult policy questions

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HARRISBURG — Pennsylvania lawmakers are advancing a $50.8 billion budget that will send more money to the state’s poorest schools but fail to address skill games regulation or other pressing policy questions.

The deal was cut behind closed doors, and its details were in flux until the final hours. Committees in both chambers advanced budget bills late Saturday during a rare weekend session, and the full legislature is expected to wrap up voting Sunday, almost two weeks after the June 30 statutory deadline.

It will put more than $900 million into education, provide a pension bump to thousands of retired school, state, and emergency response workers who retired before 2001, and require data centers to report their annual energy and water consumption to the state. The plan also preserves the state’s nearly $8 billion rainy day fund — a key priority for Republicans, who control the state Senate.

It does the latter by pulling more than $500 million from off-budget “special” funds and by using some accounting maneuvers such as delaying payments to the state’s Medicaid managed care organizations.

House Appropriations Chair Jordan Harris (D., Philadelphia) told reporters after a committee vote Saturday night that the plan would still ensure that individuals on Medicaid plans receive their healthcare.

“At the end of the day, people get paid. Bills get paid,” Harris said. “Whether it gets paid today or gets paid tomorrow, the bills will get paid.”

The deal allows the state to sell $125 million in tax credits to insurers. Those dollars then subsidize venture capital firms and fund grants for the life sciences and biotechnology industries, under an “Innovate in PA 2.0” program proposed by Gov. Josh Shapiro earlier this year.

This year marks the commonwealth’s fifth straight late budget. They have ranged from minor delays in which policymakers spent a few extra days finalizing details to 100-plus-day impasses that stretched county, school, and nonprofit finances to the limit. While this year’s delay is comparatively short, the pattern of missed deadlines has frustrated local leaders, who face the consequences of a cutoff in state funds.

Leading up to the deal, lawmakers said negotiations were running smoothly because they were not taking big policy swings as they had in the past. The lean final product reflects that.

It will not legalize recreational marijuana, include new recurring funding for mass transit, or boost the state’s minimum wage, as Shapiro and other Democrats had called for. Still, Harris offered: “It's a good budget.”

Also missing from the deal is a regulatory framework and tax on games of skill. A state Supreme Court ruling set an October deadline for lawmakers to act before the devices are subject to seizure.

Shapiro and other lawmakers support taxing skill games, which have proliferated around the state, and have floated plans they say could raise as much as $2 billion in annual revenue.

In the aftermath of the court’s ruling, Senate Republicans called addressing skill games a “ critical piece” of resolving this year’s budget. However, in an interview with WCCS Radio late last month, Senate Majority Leader Joe Pittman (R., Indiana) said that “from a legal standpoint,” lawmakers do not need to act.

“The challenge now is that, given the Supreme Court decision, it’s very clear this is gambling. We have to approach this from the perspective of it being some sort of age-restricted environment,” Pittman said, adding: “Finding that balance I think is going to be one of the biggest challenges we have.”

BEFORE YOU GO… If you learned something from this article, pay it forward and contribute to Spotlight PA at spotlightpa.org/donate. This story was funded in part thanks to the support of the Lancaster County Local Journalism Fund. Learn more about how we are supported here.

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