Leaders in Harrisburg appear to have agreed on the basics of a state budget deal, as both the state House and Senate prepared to meet Wednesday morning. But environmental advocates say they're on high alert that a cap-and-trade program to reduce greenhouse gas emissions has been axed during those negotiations.
Rank-and-file members in the House and Senate told WESA Tuesday that closed-door negotiations have resulted in a nearly $50.1 billion spending plan for the fiscal year ending June 30, 2026. Few details about the deal were publicly available as of Tuesday night, but agreeing on a topline spending number is a crucial step in any deal.
State Senators were called back to session Tuesday evening to approve a general fund budget bill and related code bills in committee. State House members were also in the Capitol on Tuesday, but caucused behind closed doors. Both chambers are expected to return Wednesday morning. Budget-related bills will need to pass each chamber and be signed by Gov.Josh Shapiro.
The deal represents a nearly 5% spending increase over last year's budget. That's still $1.5 billion less than Shapiro proposed earlier this year, but it's billions more than Republican leaders have said they wanted to spend. Republicans have warned that Democratic plans will exceed projected state revenues, and say that if the state continues to spend more than it takes in, future budget negotiations will be even more difficult.
Shapiro and top Democrats countered that drawing down money from the state savings account is a worthwhile investment to provide funding for poor school districts and health care for needy Pennsylvanians. Democrats also hoped to raise money by legalizing and taxing recreational cannabis and regulating slot-like skill games found in bars and corner stores. But Republicans have divided on those proposals, and sources say neither are expected in a final budget deal.
Environmental initiative in question
A key environmental initiative may also be left out in the cold.
Patrick McDonnell, CEO of the environmental group PennFuture, said lobbyists and legislators warned last week that budget negotiations could involve scrapping plans to join the Regional Greenhouse Gas Initiative. Joining the multi-state compact, as was first proposed by former Gov. Tom Wolf, would result in energy companies being charged for each ton of emissions their power plants put in the atmosphere.
"Every day [last] week it felt like we were even closer to DEFCON-1," McDonnell said.
Due to litigation that has led to a pending appeal to the state Supreme Court, Pennsylvania has been blocked from joining New York, New Jersey and others in the regional program. Shapiro himself has said he prefers that the state forms its own emissions-capping plan without the regional group.
Renewable energy advocates rallied in Philadelphia to oppose the rollback of the emissions-reducing initiative. But the numbers may be against them. All Senate Republicans oppose joining the regional effort. So do six Senate Democrats, including first-term state Sen. Nick Pisciottano of Allegheny County.
On Tuesday Pisciottano said Wolf's move to join the effort had been "unconstitutional," since the emission fee "is certainly a tax and all taxes have to be approved by the legislature,"
"It sets a really bad precedent if we ignore that," he said.
But he said setting the program aside — either through a Supreme Court decision ruling it out, or through an agreement in the Capitol to walk away — might give legislators a chance to focus on other approaches
" That will at least allow us to move forward and talk about environmental and energy policy in a coherent way in Pennsylvania, because we're not doing that right now," Pisciottano said.
The greenhouse gas initiative is opposed by Pittsburgh Works Together, a consortium of local labor, economic development and business groups.
Ken Zapinski, the group's director of research and public policy, said taxing energy production could drive generators to produce less — a problem he says could result in blackouts if energy supply is less than demand.
"We don't have enough power at a time when the governor himself says we need to work on lowering costs and we need more reliable electricity," Zapinski said.
He noted that Pennsylvania produces more energy than other states in the regional compact.
"Why would we want to enter into a taxing scheme, either with other states or in Pennsylvania by itself, that adds a tax on the power sources that provide most of the state's electricity?" he added.
McDonnell, of PennFuture, said charging a fee to large energy companies for their planet-warming emissions could raise nearly $1 billion annually for renewable energy projects, such as large-scale solar and wind farms, reducing dependence on oil and gas.
Only about 5% of the state's energy generation is renewable, which is far behind Pennsylvania's neighbors and Texas, the biggest energy producer in the country, McDonnell added.
Read more from our partners at WESA.