Commonwealth Foundation’s Nathan Benefield Releases Analysis of the Governor’s 2024 Budget Proposal

Harrisburg, Pa., February 8, 2024 — The spending increases proposed by Gov. Josh Shapiro in his recently released 2024 budget proposal “would explode the budget deficit and invite massive tax hikes on working families in the coming years,” according to an analysis by Commonwealth Foundation Senior Vice President Nathan Benefield.

Benefield, who has 18 years of experience studying and analyzing the Pennsylvania state budget and economic policies and their impact on Pennsylvanians, writes:

The proposed budget represents a startling scope of spending increases and new initiatives.

Shapiro proposes more than $48.3 billion in general fund spending, a dramatic 7.1 percent increase over last year’s ongoing spending. This is more than double the average growth in Pennsylvania’s personal income over the last three years. …

Shapiro’s massive spending increase takes the Independent Fiscal Office (IFO) projected $2.0 billion deficit and inflates it into a massive $3.6 billion deficit.

Even with highly unrealistic revenue and spending projections in future years, Shapiro would exhaust the general fund balance in 2026, accelerating the looming crisis. This overspending would require tax hikes on working families in 2026.

The cost to cover Shapiro’s $3.4 billion deficit in 2026 equals a tax hike of $1,000 per family of four.

Shapiro missed an opportunity to prioritize students, leaving out any funding for Lifeline Scholarships [also known as the Pennsylvania Award for Student Success (PASS)], proposing massive increases for school districts, but cuts to public cyber schools.

In recent polling, 64 percent of voters support scholarships for low-income students in the worst-performing schools, and 90 percent of black single mothers believe traditional public schools fail to meet students’ needs. …

Unfortunately, despite a budget address with over 11,000 words, Shapiro’s budget proposal included zero dollars to help kids or expand educational choice—with no inclusion of Lifeline Scholarships/PASS, and flat funding of tax credit scholarships. …

Curiously, Shapiro’s budget shows virtually no increase in public school funding beyond 2025—a laughable expectation, clearly meant to hide the size of future deficits.

Shapiro’s proposal does not address Pennsylvania’s economic competitiveness and the outmigration that drains our working-age population. Instead, his proposals would exacerbate these trends.

Unfortunately, Pennsylvania has long been a laggard in economic competitiveness, with slow growth. As a result of an uncompetitive economy, Pennsylvania has suffered from outmigration for 12 of the past 13 years. Tens of thousands of residents are leaving for greener pastures in economically competitive, fiscally responsible states like North Carolina, Florida, and Texas almost every year. …

Shapiro refuses to address surging Medicaid and human services costs. Overall Medicaid costs are growing more than twice as fast as revenue. …

Shapiro’s budget [does not reduce] the corporate tax rate to improve the state’s competitiveness … neglects any proposal to reduce regulatory red tape or enact permitting reforms … maintains his insistence on new energy taxes—taxes like the Regional Greenhouse Gas Initiative (RGGI), estimated to cause a 30 percent increase in residential electric bills … [and] relies on new vice taxes to balance the budget, draining fiscal reserves, and forcing future tax hikes on working families.

View Benefield’s full analysis here.

To schedule an interview with Benefield, please contact Christian Stellakis at (315) 720-3561 or [email protected].

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The Commonwealth Foundation turns free-market ideas into public policies, fostering prosperity for all Pennsylvanians.