31
March
2025

Legislative Update: Highlights of Gov. Shapiro's Budget Proposal

On March 6, 2025, the Pennsylvania lawmakers looked over Governor Shapiro’s $51.5 billion budget proposal, which includes new taxes and funds from reserves. The budget focuses on innovation, agriculture, and improving mass transit.

Legislative Update: Highlights of Gov. Shapiro's Budget Proposal

On March 6, 2025, the Pennsylvania House and Senate Appropriations Committees completed their review of Governor Josh Shapiro’s Fiscal Year 25-26 state budget, which he presented to the General Assembly on February 4, 2025. The Pennsylvania General Assembly has a Constitutional deadline of June 30th every year to adopt a balanced budget; therefore, the budget will take center stage over the next few months.

The Governor's $51.5 billion budget proposal is $3.9 billion more than the approved FY 2024- 25 budget. In addition, under this budget proposal, the state would be required to use the last of its surplus and take about $1.6 billion out of its Rainy-Day Fund as well as enact two new taxes to pay for the proposed budget. The Governor said the legalization of marijuana for recreational use by adults is projected to bring in $536.5 million in revenue in the first fiscal year and a tax levied against 30,000 skill games and VGTs would bring $368.9 million into the state’s general fund during its first year with another $40 million deposited directly into the lottery fund.

Highlights of the Governor’s Budget Proposal

  • Creates the new $50 million PA Innovation program including a one-time $30 million to spur life sciences job growth and innovation through coordination among research universities to assist businesses in bringing cutting edge technology to market and $20 million in annual funding to support large-scale innovation, match federal awards to mitigate risks for start-ups, and leverage Pennsylvania's research and development assets.
  • Invests an additional $13 million in agriculture innovation, to help support and attract new agricultural businesses.
  • Creates and launches the Pennsylvania Regional Economic Competitiveness Challenge – invests $3.5 million to provide different regions with resources they need to plan and implement local economic development strategies.
  • Converts the Local Resource Manufacturing Tax Credit Program to a Reliable Energy Investment Tax Credit – Up to $100 million per year per facility for 3 years to help bring new, reliable energy sources onto the grid.
  • Semiconductor Manufacturing, Biomedical Manufacturing and Research Tax Credit Program– reduce investment requirement and lower the permanent jobs requirements.
  • Regional Hydrogen Clean Hydrogen Tax Credit Program – Allow up to seven regionally dispersed qualified taxpayers to claim up to $7 million per year and lowers thresholds to qualify.
  • Create the new AdvancePA tax credit – A $10 million flexible tax credit to secure important deals and incentivize high-paying jobs creation.
  • Increases the transfer of all Sales and Use Tax receipts to the Public Transportation Fund by 1.75 percent to provide an additional $292.5 million into mass transit in 2025- 2026 and growing to more than $330 million in 2029-2030.
  • Reduces reliance on the Motor License Fund to supplement the Pennsylvania State Police by $50 million a year until it is completely removed in 2029-2030.

With respect to transportation issues, the immediate priorities of the House and Senate Transportation Committees include:

  1. A joint House and Senate public hearing on the ignition interlock application process.
  2. House intends to address mass transit funding in April.
  3. House intends to revisit the Design/Build legislation for road and bridge projects in April.
  4. House and Senate may revisit the red-light camera laws – expanding them.
  5. Address insurance lapse notices/suspended vehicle registrations.
  6. Titling reform.

Finally, conversations continue between the House and Senate Transportation Committee Chairs and the Pennsylvania Department of Transportation (PennDOT) regarding how to revise our laws dealing with lienholder notification, salvage vehicles, and abandoned vehicles in general.

Please be assured that we will continue to monitor and advocate issues impacting independent vehicle dealers in Pennsylvania and keep you apprised of any activity.

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Erik Ross

Erik Ross

Erik Ross brings over 30 years of experience in state government and lobbying to Milliron Goodman. He specializes in state government relations with a focus on transportation, energy, environmental, and public utility issues in one of the most innovative regulatory environments in the country. His duties include lobbying members and staff of the Pennsylvania General Assembly, executive departments, and regulatory agencies on behalf of clients. In addition, he serves as a liaison between clients and state government officials and assists in the drafting or amending of legislative and regulatory proposals.

Erik’s public sector experience includes positions as Research Analyst to the Chairman of the Senate Majority Policy Committee and Senate Environmental Resources & Energy Committee; and Legislative Assistant and Executive Assistant to the Pennsylvania Senate Majority Whip Mike Fisher from 1989 to 1993. His duties included management of legislative/policy development; drafting legislation, amendments, and correspondence; assisting the Majority Whip on the Senate floor; and assisting the Senate Majority Leader’s staff on caucus-related projects.

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