Senate Republican Leaders Highlight Pro-Growth Budget Passed by Senate – Pennsylvania Senate Republicans

Report on the Pennsylvania 2025-26 State Budget and Alignment with Sustainable Development Goals

1.0 Overview of Fiscal Policy and Governance

A bipartisan state budget plan totaling $50.1 billion has been approved. The agreement represents a compromise in a divided government, focusing on fiscal responsibility and targeted investments. The budget’s framework supports several United Nations Sustainable Development Goals (SDGs), particularly through its approach to economic management and institutional stability.

• SDG 16: Peace, Justice and Strong Institutions: The budget protects the state’s emergency Rainy Day Fund, ensuring fiscal stability and responsible management of public finances. It also utilizes approximately $3 billion in lapsed funding to balance expenditures, reflecting a commitment to efficient and accountable institutions.
• SDG 17: Partnerships for the Goals: The passage of the budget through bipartisan agreement demonstrates a functional partnership between political parties to achieve common objectives for the commonwealth.

2.0 Economic Development and Decent Work

The budget incorporates several measures designed to stimulate economic activity, create employment opportunities, and enhance the state’s competitiveness, directly addressing key targets within SDG 8 and SDG 9.

1. Promoting Job Creation (SDG 8: Decent Work and Economic Growth):
   • The budget continues the phase-down of the Corporate Net Income Tax and preserves the increase to the Net Operating Loss deduction, policies intended to make Pennsylvania more attractive for business development and job creation.
   • A proposed $15 million cut to workforce development programs was restored, ensuring continued support for training initiatives that equip Pennsylvanians for family-sustaining jobs.
2. Enhancing Industry and Innovation (SDG 9: Industry, Innovation and Infrastructure):
   • Critical reforms to the state’s permitting process have been implemented. By establishing a “deemed approved” status for certain environmental permits after a set period, the reform aims to provide certainty and efficiency for businesses, thereby encouraging investment and infrastructure development.

3.0 Social Equity and Well-being

Significant investments are directed toward reducing poverty, supporting vulnerable populations, and ensuring access to essential services, aligning with goals for social inclusion and health.

• Poverty Reduction (SDG 1: No Poverty): The introduction of the Working Pennsylvanians Tax Credit, a state-level earned income tax credit, directly supports low-income working families. This measure provides financial relief to be used for essential needs like childcare and food.
• Reduced Inequalities (SDG 10: Reduced Inequalities): The tax credit and targeted funding for education in disadvantaged schools (see section 4.0) aim to reduce economic disparities. The budget also secures funding for programs benefiting older Pennsylvanians, including a $100 million transfer to the Lottery Fund and an additional $10 million for Area Agencies on Aging.
• Food Security (SDG 2: Zero Hunger): The budget increases funding for the Farmer’s Market Food Coupons program by $7 million and the State Food Purchase program by $4 million, enhancing access to nutritious food for low-income residents.

4.0 Education and Human Capital Development

The budget allocates substantial new funding to various educational programs, reinforcing the state’s commitment to providing inclusive and equitable quality education for all residents.

• Quality Education (SDG 4: Quality Education):
  • The Educational Improvement Tax Credit (EITC) program was expanded by $50 million to increase school choice opportunities.
  • Funding was increased for several key programs: Ready to Learn Block Grant ($562 million), Basic Education ($105 million), Special Education ($40 million), and Pre-K Counts ($9.5 million).
  • The Grow PA Scholarship Grant program received an additional $7.5 million to provide grants for students in high-demand fields who commit to working in Pennsylvania post-graduation, linking education directly to state workforce needs.

5.0 Energy and Environmental Policy

A key component of the budget agreement involves energy policy, with decisions directly impacting energy affordability for consumers and businesses.

• Affordable and Clean Energy (SDG 7: Affordable and Clean Energy): The budget agreement mandates the elimination of the regulation for Pennsylvania’s participation in the Regional Greenhouse Gas Initiative (RGGI). This action was taken to prevent a significant increase in electricity taxes, thereby supporting the goal of ensuring access to affordable energy for all Pennsylvanians.

Sustainable Development Goals (SDGs) Addressed in the Article

• SDG 1: No Poverty

  The article discusses the creation of the “Working Pennsylvanians Tax Credit,” a state-level earned income tax credit. This policy is designed to provide financial relief to low-income working families, directly addressing the goal of reducing poverty by putting “money back in the pockets of hardworking Pennsylvania families.”

• SDG 2: Zero Hunger

  The budget allocates additional funding for programs aimed at food security. Specifically, it mentions a “$7 million increase” for Farmer’s Market Food Coupons and a “$4 million increase” for the State Food Purchase program, which directly supports efforts to end hunger and ensure access to food.

• SDG 4: Quality Education

  The article highlights significant investments in education at various levels, including funding increases for Pre-K, Basic Education, and Special Education. It also mentions a “$50 million expansion” of the Educational Improvement Tax Credit for school choice and the “Grow PA Scholarship Grant program” to support students in higher education for in-demand fields.

• SDG 7: Affordable and Clean Energy

  The budget’s elimination of Pennsylvania’s participation in the Regional Greenhouse Gas Initiative (RGGI) is a central theme. The article frames this decision as a measure to protect consumers from a “new electricity tax,” thereby addressing the goal of ensuring affordable energy for all residents.

• SDG 8: Decent Work and Economic Growth

  The article emphasizes that the budget is a “pro-jobs” plan intended to “grow Pennsylvania’s economy.” It details several policies aimed at this goal, including the phase-down of the Corporate Net Income Tax, reforms to the permitting process to help businesses, and restoring a “$15 million cut” to workforce development programs.

• SDG 9: Industry, Innovation, and Infrastructure

  The discussion of “critical reforms to Pennsylvania’s permitting process” relates to this goal. By creating a “‘deemed approved’ permit reform,” the budget aims to provide certainty and end delays in the process, making the state “more competitive economically” and encouraging business and industrial development.

• SDG 13: Climate Action

  This SDG is addressed through the debate and ultimate rejection of the Regional Greenhouse Gas Initiative (RGGI). The article describes RGGI as a “carbon tax program.” While the action taken was to withdraw from this climate initiative, the decision-making process itself is directly related to integrating (or not integrating) climate change measures into state policy.

Specific SDG Targets Identified

1. Target 1.3: Implement nationally appropriate social protection systems.

   The creation of the “Working Pennsylvanians Tax Credit” is a direct implementation of a state-level social protection system. The article states it is a “state-level earned income tax credit” designed to benefit “low-income working Pennsylvanians,” aligning with the goal of providing financial support to the vulnerable.

2. Target 2.1: End hunger and ensure access by all people… to safe, nutritious and sufficient food.

   The budget’s increased funding for the “Farmer’s Market Food Coupons” and the “State Food Purchase program” directly contributes to this target by enhancing the ability of low-income individuals and families to access food.

3. Target 4.2: Ensure that all girls and boys have access to quality early childhood development, care and pre-primary education.

   The article mentions a “$9.5 million increase” for “Pre-K Counts,” a program specifically aimed at expanding access to pre-primary education, which is a key component of this target.

4. Target 7.1: Ensure universal access to affordable, reliable and modern energy services.

   The decision to prevent Pennsylvania from entering RGGI is justified in the article as a way to protect “consumers from dealing with even more severe consequences” of what it calls an “electricity tax.” This action is explicitly linked to maintaining the affordability of electricity.

5. Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation.

   The budget’s pro-growth policies, such as continuing the “phase-down of the Corporate Net Income Tax” and restoring funding for “workforce development programs,” are designed to create a favorable environment for job creation and business development, directly aligning with this target.

Indicators for Measuring Progress

• Financial Investment in Social and Economic Programs

  The article explicitly mentions several financial figures that can serve as indicators of government commitment. These include the “$1.4 billion” reduction in business taxes, the “$50 million expansion” of the Educational Improvement Tax Credit, the “$15 million” restoration for workforce development, and specific funding increases for food programs (“$7 million,” “$4 million”) and education (“$105 million,” “$40 million,” “$9.5 million”).

• Tax Credit Implementation and Uptake

  The article implies an indicator for Target 1.3 through the creation of the “Working Pennsylvanians Tax Credit.” Progress could be measured by the number of eligible taxpayers who claim this state tax credit, which is set at “10% of the amount they receive under the federal program.”

• Permit Approval Timelines

  For SDG 9, the reform requiring environmental permits to be “‘deemed approved’ after a certain period of time” introduces a direct indicator. Progress can be measured by tracking the average time for permit application consideration and the number of permits processed under this new, time-bound framework.

• Policy Implementation (or non-implementation)

  An indicator for SDG 13 is the policy decision itself. The article clearly states that the regulation mandating Pennsylvania’s participation in RGGI “was eliminated.” The state’s official non-participation in this regional climate initiative is a measurable policy outcome.

Summary Table of SDGs, Targets, and Indicators

Source: pasenategop.com