On Tuesday, the stateƵs Independent Fiscal Office released an analysis of revenue proposals contained in Gov. Josh ShapiroƵs 2025Ƶ26 budget proposal.
It estimated, for instance, that a proposed expansion of existing video gaming terminal regulation to include so-called Ƶskill gamesƵ would net roughly half of what the governorƵs budget expects, $50,000 per machine against $96,000 per machine in the budget proposal.
It also projected that the regulation and taxation of recreational marijuana only would generate $398 million once fully phased in, Ƶconsiderably higher than the Executive BudgetƵ as presented by the governor last month.
IFO also said the proposal to accelerate the corporate tax rate reduction will produce a significant tax cut, while its estimates for a proposed Public Transportation Trust Fund transfer are largely the same as what the Shapiro administration is proposing.
The Commonwealth Foundation and Republican leadership in the state House and Senate said IFOƵs report confirms that the governorƵs revenue projections are wildly overstated.
Moreover, the Commonwealth Foundation said, IFO detected hyperbolized projections throughout the governorƵs budget proposal, particularly revenue estimates from mandatory combined reporting, taxes from legalizing recreational marijuana, and expanded gambling Ƶ none of which has been passed by the Pennsylvania legislature.
ƵAs details are being closely examined, it is clear Gov. ShapiroƵs 2025-26 budget proposal increasing spending by $3.6 billion from the current yearƵs budget is not a realistic path to close the stateƵs multi-billion-dollar structural deficit,Ƶ state Senate Majority Leader Joe Pittman, R-Indiana, said.
ƵThe IFOƵs projections confirm what we have been saying since the governor proposed his budget: the math doesnƵt work,Ƶ said House Minority Appropriations Chairman Jim Struzzi, R-Indiana. ƵThe governor is grossly overestimating state revenues while at the same time underestimating predictable spending increases in future years to hide the fact he is raiding the Rainy Day Fund to balance this and future budgets.Ƶ
The report comes out as the appropriations committees in the two chambers near the end of hearings on the state budget.
ƵI am grateful to have the IFO to provide fair and independent analysis of the state finances,Ƶ Struzzi said. ƵWe will be using this analysis as we work toward finishing a responsible budget.Ƶ
The governorƵs office did not respond to requests for comment at press time. However, ShapiroƵs administration was busy on several fronts Wednesday.
In addition to its announcement of his executive order to recruit Ƶexperienced former federal employeesƵ to fill critical vacancies in the stateƵs workforce, the state Department of Drug and Alcohol Programs announced a grant of more than $2 million for five organizations to help improve PennsylvaniansƵ access to substance use disorder recovery houses that are licensed through DDAP.
One grant will go to Westmoreland Community Action, which would cover programs in Westmoreland and 19 other counties, including Indiana, Armstrong, Cambria, Clearfield and Jefferson counties.
Funding for those grants is provided from the ƵBig FourƵ opioid settlement funding that was appropriated to DDAP by the General Assembly. The funding was the result of a multi-state investigation of opioid manufacturers and distributors spearheaded by then-Attorney General Shapiro that led to settlement agreements worth billions of dollars Ƶ most of which goes directly to counties to meet local needs. Settlement money is to be invested in opioid remediation programs and initiatives.