First look at the 2024-25 State Budget
On July 11, Gov. Josh Shapiro signed into law a bipartisan budget that marks a significant step towards bolstering Pennsylvania’s economic competitiveness against neighboring states. This budget not only represents a collaboration across party lines but also embodies a strategic initiative aimed at enhancing key sectors such as education, workforce development and infrastructure. With an allocation of funds and tax cuts nearing $2 billion for economic development, the budget signifies a substantial commitment to economic growth, promising transformative investments in various facets of Pennsylvania’s economic landscape.
Within this $2 billion economic package, there are pivotal provisions encompassing development incentives and revisions to the tax code. This included the amending of the tax code, ultimately making Reading eligible for a City Revitalization Zone (CRIZ) through the state. These changes are poised to exert a profound influence on business dynamics and structural development throughout Greater Reading. As a result, stakeholders across the region are anticipating significant shifts in economic strategy and opportunities for growth.
The implications of these initiatives extend beyond mere financial appropriations; they are indicative of a deliberate effort to redefine Pennsylvania’s economic trajectory and foster sustainable development across its diverse industries. Consequently, the business community in Greater Reading is poised to navigate a landscape shaped by legislative measures designed to stimulate innovation and economic resilience.
Tax Changes and Economic Development
The latest Pennsylvania budget signifies a decisive commitment to revitalizing the state’s economy, channeling nearly $2 billion in private sector investments to stimulate widespread opportunity. Notable initiatives include the phased reduction of the Corporate Net Income Tax (CNI) and the expansion of Net Operating Loss deductions, a significant win advocated by chambers of commerce statewide. Furthermore, enhancements such as the Streamlining Permits for Economic Expansion and Development (SPEED) program and adjustments to CRIZ criteria, benefiting cities like Reading, demonstrate a proactive strategy to accelerate economic growth and infrastructure development across Pennsylvania.
Other notable areas include:
- Phase-down of the Corporate Net Income Tax (CNI), from 8.49 percent to 7.99 percent in 2025.
- Prospective Net Operating Loss deductions will gradually increase, reaching 80 percent in 2029.
- Tax credits for employer contributions to employees’ 529 tuition savings accounts and employer contributions toward employees’ childcare costs.
- Creates the Streamlining Permits for Economic Expansion and Development (SPEED) Program.
- $10.5 million to speed up permitting process at the DEP to reduce backlog by estimated 41 percent.
- Provides an option for third-party review of certain air, earth disturbance and water permit applications.
- Establishes permit review timelines by DEP and conservation districts, as well as a permit tracking system.
- $400 million for the PA Strategic Investments to Enhance Sites (PA SITES) program to fund site development and infrastructure to create shovel ready sites.
- Clarifies that any goodwill filed by banks with the Federal Deposit Insurance Corporation (FDIC) is excluded from the bank shares tax calculation.
- Resolves an issue where the Department of Revenue has denied goodwill deductions that involve combinations of bank holding companies, which result in the combination of subsidiary banks.
- $20 million for the Main Street Matters program.
- $20 million for small minority-, woman-, veteran-owned businesses.
- $15 million for tourism marketing through the Great American Getaway brand.
- $15 million in Keystone Innovation Zone (KIZ) tax credits worth up to $100,000 for qualified firms.
- Allows convenience store and supermarket to sell Ready-to-Drink beverages (RTDs).
- CRIZ criteria amended to include cities, like Reading, into the Authority generation and funding process.
Energy, Infrastructure and Agriculture
Pennsylvania’s latest budget has earmarked surplus funds for key priorities, including multimodal infrastructure projects through PennDOT, enhanced transit operations and advancements in agricultural technologies. These investments are expected to enhance transportation efficiency, support sustainable agricultural practices and ultimately foster economic growth statewide — positioning PA for continued structural development in the years to come.
Other notable areas include:
- $80.5 million of the current surplus to make a one-time investment in multimodal infrastructure projects through PennDOT.
- $80.5 million of the current surplus to make a one-time investment in transit operations.
- $10 million to support new Agricultural technologies, including energy and conservation efforts.
- Establishes a comprehensive regulatory framework for the deployment of carbon capture technology, which holds great potential to be added to Pennsylvania’s diverse energy portfolio.
- Establishes a legal and regulatory framework for carbon dioxide capture, utilization and sequestration is vital to ensuring the deployment of billions of dollars in private capital.
- Leverages federal infrastructure funding, to innovate in low-carbon manufacturing, agricultural and energy production projects.
- Implements a $200 user fee for electric vehicles that will scale up over time to ensure their contributions towards road and bridge infrastructure maintenance.
Education and Workforce Development
This budget also introduces a historic $1.11 billion in new funding for K-12 public school. The budget includes innovative initiatives such as $5,000 grants for students meeting degree requirements and working in high-demand fields within the state post-graduation, along with in-state tuition incentives for out-of-state students committing to similar career paths in Pennsylvania. Furthermore, there’s a notable 21% increase in investment in career and technical education, expanded CTE Equipment grants, and improved pathways for individuals aspiring to become CTE educators, accompanied by a $30 million increase to support new apprenticeship programs. These comprehensive investments in education, workforce development and housing are poised to significantly enhance Pennsylvania’s economic resilience and prosperity. By prioritizing education funding, incentivizing workforce retention, and expanding housing initiatives, the state is laying a foundation for sustainable growth and opportunity, ensuring a brighter future for all Pennsylvanians.
Other notable areas include:
- Increases the Educational Improvement Tax Credit by $70 million to $540 million.
- $5,000 grants for Pennsylvania students who meet degree requirements and work in an in-demand occupation in the state after graduation.
- Offers in-state tuition to out-of-state students who commit to working in Pennsylvania in an in-demand occupation after graduation.
- Increases the Commonwealth’s investment in career and technical education by 21%, increases the investment in CTE Equipment grants, and makes it easier for qualified individuals to become a career & technical educator.
- Increase of $30 million building on the nearly 40 new apprenticeship programs approved last year.
- Incentivizes employers to reimburse employees for childcare expenses by creating the Employer Childcare Contribution Tax Credit to ease the burden of childcare.
- $15.7 million increase in funding for community colleges.
- $35.1 million increase in funding for PASSHE schools.
- $120 million in increased funding for scholarships and grants.
- $54 million increase to PHEAA grants
- $5 million for disadvantaged student scholarships.
- Expands the Pennsylvania Housing Affordability and Rehabilitation Enhancement (PHARE) fund to expand the availability of workforce housing in Pennsylvania.
- Raises the cap to $100 million per year by 2026.
- $2.5 million for a Local Government Emergency Housing support program.