HB 1947 — An Act providing for limit on fiscal year spending, emergency spending and requirement for raising revenue; and establishing the Commonwealth Reserve Fund.

PRINTER'S NO.   2456

                   THE GENERAL ASSEMBLY OF PENNSYLVANIA



                       HOUSE BILL
                       No. 1947
                                                 Session of
                                                   2025

     INTRODUCED BY T. JONES, KAUFFMAN, STAMBAUGH, GREINER, ROWE,
        LEADBETER, BERNSTINE, HAMM, RAPP, ZIMMERMAN, KUZMA AND
        BARGER, OCTOBER 15, 2025

     REFERRED TO COMMITTEE ON APPROPRIATIONS, OCTOBER 16, 2025


                                      AN ACT
 1   Providing for limit on fiscal year spending, emergency spending
 2      and requirement for raising revenue; and establishing the
 3      Commonwealth Reserve Fund.
 4      The General Assembly of the Commonwealth of Pennsylvania
 5   hereby enacts as follows:
 6   Section 1.   Short title.
 7      This act shall be known and may be cited as the Responsible
 8   Budgeting Act.
 9   Section 2.   Definitions.
10      The following words and phrases when used in this act shall
11   have the meanings given to them in this section unless the
12   context clearly indicates otherwise:
13      "Emergency."   A sudden, urgent, unforeseen and temporary
14   situation that requires an immediate expenditure of funds to
15   preserve the health, safety and general welfare of the residents
16   of this Commonwealth.
17      "Enacted spending."      General Fund expenditures that are used
18   as a basis to consider and build support for other funding
 1   sources to support State government operations.
 2      "Fund."     The Commonwealth Reserve Fund established under
 3   section 5.
 4      "Gross State product."     The total economic output of this
 5   Commonwealth, which encompasses the final goods and services
 6   produced within this Commonwealth, as estimated in the United
 7   States Bureau of Economic Analysis.
 8      "Revenue."     Money required by law to be paid to the
 9   Commonwealth and collected lawfully by the Commonwealth. The
10   term does not include borrowed funds or receipt of money
11   transferred from the Federal Government.
12      "Spending."     Money in the State Treasury expended by the
13   Commonwealth. The term does not include the expenditure of money
14   in the State Treasury that was transferred from the Federal
15   Government.
16   Section 3.     Limit on fiscal year spending.
17      (a)   Calculation.--The limit on fiscal year spending shall
18   equal enacted spending in the prior fiscal year increased by the
19   structural balance factor under subsection (b).
20      (b)   Structural balance factor.--The structural balance
21   factor shall be the difference between:
22            (1)   the average rate of growth of gross State product
23      during the five calendar years preceding the regular
24      legislative session; and
25            (2)   the deficit brake under subsection (c).
26      (c)   Deficit brake.--The deficit brake shall:
27            (1)   Have an initial and a minimum value of 0.
28            (2)   Increase by 0.2 percentage points, cumulatively, for
29      the upcoming fiscal year after a fiscal year when the dollar
30      amount of spending exceeded the dollar amount of revenue.

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 1            (3)   Decrease by 0.2 percentage points, cumulatively, for
 2      the upcoming fiscal year after a fiscal year when the dollar
 3      amount of spending did not exceed the dollar amount of
 4      revenue.
 5      (d)   Adjustment.--The General Assembly may adjust the limit
 6   on fiscal year spending to:
 7            (1)   reflect enacted changes in the dollar amount of
 8      revenue collected; or
 9            (2)   provide for emergencies under section 4.
10   Section 4.     Emergency spending.
11      (a)   Authorization.--The General Assembly may authorize
12   spending in excess of the limit on fiscal year spending under
13   section 3 through legislation that includes an emergency
14   declaration describing the situation and which obtains the vote
15   of two-thirds of the members present and voting in the Senate
16   and the House of Representatives.
17      (b)   Offset.--Emergency spending shall be offset by equal
18   reductions in the limit on fiscal year spending for each of the
19   subsequent six fiscal years.
20      (c)   Effect.--Neither emergency spending nor its subsequent
21   offset shall otherwise affect the basis for calculating
22   subsequent limits on fiscal year spending under section 3.
23   Section 5.     Commonwealth Reserve Fund.
24      (a)   Establishment.--The Commonwealth Reserve Fund is
25   established in the State Treasury. The money in the fund is
26   appropriated on a continuing basis to the Treasury Department
27   for the purposes provided in subsection (c).
28      (b)   Fund sources.--Budget surpluses shall be deposited into
29   the fund. Interest and other earnings on the fund shall accrue
30   to the fund.

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 1      (c)   Spending support.--The fund and current revenue shall
 2   support spending within the limit on fiscal year spending
 3   established under section 3, including emergency adjustments.
 4      (d)   Rebates and other uses.--When the fund equals 15% of the
 5   current spending limit, at least 50% of further surpluses shall
 6   be rebated by the State Treasurer, in consultation with the
 7   Department of Revenue, to taxpayers in proportion to taxes paid,
 8   and the remainder shall reduce general debt or, as the General
 9   Assembly may direct, other liabilities of the Commonwealth.
10   Surplus revenue used for rebates or to reduce Commonwealth
11   liabilities shall be excluded from the limit on fiscal year
12   spending under section 3.
13   Section 6.   Automatic spending levels.
14      If the General Assembly does not enact the General
15   Appropriation Act for the upcoming fiscal year by the end of the
16   current fiscal year on June 30, the funding levels under the
17   General Appropriation Act for the immediately prior fiscal year
18   shall take effect beginning July 1 and shall remain in effect
19   until the General Appropriation Act is enacted for the current
20   fiscal year.
21   Section 7.   Applicability.
22      This act shall apply to the fiscal year that begins not less
23   than 60 days following the effective date of this section and to
24   each fiscal year thereafter.
25   Section 8.   Effective date.
26      This act shall take effect immediately.




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