shapiro budget deficit

Governor’s Proposed Budget Would Balloon Deficit to More Than $6 BILLION

Harrisburg, Pa., February 28, 2024 — Gov. Josh Shapiro’s proposed $48.3 billion budget would expand Pennsylvania’s structural deficit to more than $6 billion by 2028 and lead to major tax increases, according to the latest research from the Commonwealth Foundation. To pay for the $4.5 billion in Shapiro’s new spending initiatives, lawmakers would have to hike taxes by more than $2,000 per family of four.

To fund additional spending, Shapiro would first deplete the state’s General Fund balance by fiscal year (FY) 2026–27 and then illegally drain $7 billion from the Rainy Day Fund’s balance. State law dictates that Pennsylvania’s Rainy Day Fund reserves “shall not be used to begin new programs but to provide for the continuation of vital public programs in danger of being eliminated or severely reduced due to financial problems resulting from the economy.” Yet, Shapiro’s budget disregards this statute.

Shapiro’s budget projections also substantially overestimate revenue growth while underestimating spending growth—particularly when compared with Pennsylvania Independent Fiscal Office (IFO) calculations. Shapiro’s budget outlook even goes so far as to project no increases in basic education funding after FY 2024–25—a laughable notion that flies in the faces of Shapiro’s speech. This means the budget deficit will be about $4 billion higher than the governor’s forecast.

“Governor Shapiro’s deficit projections seem deliberately misleading,” said Commonwealth Foundation Senior Vice President Nathan Benefield. “Pennsylvania has lost nearly 65,000 residents to other states over the last two years—working adults are leaving the Commonwealth. Yet, the Shapiro administration believes the economy will surge and state revenues will exceed the IFO’s calculations by more than $850 million in fiscal years 2024–25 and 2025–26. The governor’s math doesn’t add up.”

Benefield continued: “Pennsylvanians can’t afford the thousands more in taxes that Shapiro’s budget would heft upon them. Nor can they afford an administration that uses creative accounting to mask the true cost of the governor’s spending proposals. Our families deserve better than runaway government spending, increased deficits, depleted reserves, and tax hikes on working families.”

View the Commonwealth Foundation’s full fact sheet here.


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