State Fiscal Briefs

July 2023

Pennsylvania’s budget basics

According to the National Association of State Budget Officers (NASBO), Pennsylvania’s total expenditures in fiscal year (FY) 2022 were $119.1 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2022 were $2.9 trillion, ranging from $5.6 billion in Wyoming to $510.0 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Pennsylvania’s combined state and local direct general expenditures were $147.5 billion in FY 2021 (the most recent year census data were available), or $11,353 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $11,087.

(Note: We cite data from both NASBO and Census to provide a broader picture of each state’s fiscal situation. However, these sources detail spending from different levels of government in different years, and the COVID-19 pandemic and the federal government’s response to it significantly affected these totals in different ways in different years. Please only use one source if you are looking for historical comparisons.)

Pennsylvania’s largest spending areas per capita were public welfare ($3,161) and elementary and secondary education ($2,543). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

Pennsylvania’s combined state and local general revenues were $164.4 billion in FY 2021, or $12,653 per capita. National per capita general revenues were $12,277. Pennsylvania uses all major state and local taxes. After federal transfers, Pennsylvania’s largest sources of per capita revenue were individual income taxes ($1,692) and property taxes ($1,680).

Pennsylvania’s politics

Governor Josh Shapiro, a Democrat, was elected in 2022 with 55 percent of the vote. The next gubernatorial election is in 2026.

Pennsylvania has a divided government. Democrats control the House of Representatives, (102 Democrats to 100 Republicans) while Republicans control the Senate (28 Republicans to 22 Democrats). All Pennsylvania House seats are on the ballot in 2024 because representatives serve two-year terms. Senators serve four-year terms; roughly half the senatorial seats are on the ballot in 2024, and the other half will be up for election in 2026.

Pennsylvania’s budget institutions, rules, and constraints

Pennsylvania uses an annual budget. The legislature must pass a balanced budget, but it can carry a deficit over into the following year. Pennsylvania does not have any other tax or expenditure limits. The state does limit total authorized debt and debt service incurred by the state.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Pennsylvania’s current budget

Governor Wolf released his FY 2024 budget proposal and gave his state of the state address in March 2023.

Pennsylvania enacted its FY 2023 budget in July 2022. According to the governor, the enacted budget included $42.8 billion in general fund spending. (Pennsylvania’s definition of its general fund spending is not the same as NASBO’s definition, so the historical totals reported below are not comparable. See NASBO’s report for more detail.) Pennsylvania also passed tax cuts in calendar year 2022, including reducing the state’s corporate income tax rate from 10 percent to 5 percent (over multiple years).

Under the American Rescue Plan, Pennsylvania will receive $7.3 billion in direct state fiscal aid and $5.2 billion in local government aid from the federal government. As of January 2022, Pennsylvania had spent part of its ARP funds on revenue replacement, public health programs, and education spending.

According to NASBO, Pennsylvania’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:

  • FY 2022: $37.5 billion/$119.1 billion
  • FY 2021: $34.0 billion/$103.3 billion
  • FY 2020: $34.1 billion/$96.6 billion
  • FY 2019: $36.3 billion/$89.6 billion

For more on Pennsylvania’s budget, see