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Legislative Update - Week Ending July 18, 2025
In this issue: Pennsylvania House adopts budget proposal; Pa. constitutional amendment to eliminate school property tax; Cyber school measures clear Pa. Senate committee; and more.
by PICPA Government Relations
Jul 18, 2025, 10:09 AM
- House Adopts Budget Proposal as Stalemate Drags On
- Constitutional Amendment Proposed to Eliminate School Property Taxes
- Cyber School Reform Measures Clear Senate Committee
- 2025 CPA Firm Tech Report: Expert Guidance on Where to Invest Next
- Proposed Legislation Offers Targeted Tax Amnesty
- Bill Introduced to Boost AI and Data Center Investment Statewide
- New Federal Deduction to Deliver $1.1 Billion in Tax Relief to Pa. Seniors
House Adopts Budget Proposal as Stalemate Drags On
Three weeks into the new fiscal year, Pennsylvania’s budget impasse continues, but the state House took a step forward this week by passing its version of the 2025-2026 state spending plan. The move adds urgency to the negotiations between the Senate and governor’s office as pressure mounts to finalize a deal.
The House-approved plan – House Bill 1330 – spends $50.6 billion, about $900 million less than Gov. Josh Shapiro’s February budget framework, with proposed increases in funding for public education, mental health services, and infrastructure investment. House leaders also included a series of tax and revenue provisions aimed at balancing the plan without raising broad-based taxes.
Despite the House’s action, a final deal remains elusive as the Republican-controlled Senate has expressed concerns about the spending level and certain policy provisions. A spokesperson for Senate Majority Leader Sen. Joe Pittman (R-Indiana) told The Center Square, “A procedural process needs to occur while we continue to work to reach an agreement. We do not view HB 1330 in its current form as a final product.”
While both chambers and the governor’s office have held discussions behind closed doors, the process remains stalled. Without an enacted budget, some state payments could soon face disruption, and local governments, school districts, and service providers are growing increasingly anxious.
Throughout the negotiations, the PICPA remains engaged in advocating for its key legislative priorities. The PICPA will continue to monitor developments and work with policymakers to ensure the final budget reflects sound fiscal policy and supports Pennsylvania’s long-term growth.
Constitutional Amendment Proposed to Eliminate School Property Taxes
State Sens. Chris Gebhard (R-Lebanon) and Doug Mastriano (R-Franklin) introduced a constitutional amendment to eliminate school property taxes in Pennsylvania.
Senate Bill 929 would prohibit school districts from collecting property taxes beginning July 1, 2029. The General Assembly would be required to find alternative methods to fund Pennsylvania’s public school system.
If this proposed amendment is approved by the General Assembly in two consecutive legislative sessions, it will be placed on the ballot. It will then be up to Pennsylvania voters to decide if school taxes should be eliminated in the commonwealth.
The bill was referred to the Senate State Government Committee.
Cyber School Reform Measures Clear Senate Committee
The Senate Education Committee this week voted out two bills that further reform Pennsylvania’s cyber charter schools.
Senate Bill 927, sponsor Sen. Tracy Pennycuick (R-Montgomery), will ensure that cyber charter school wellness checks are conducted as originally intended. Act 55 of 2024 mandates that cyber charter schools conduct wellness checks at least once during any week consisting of three or more instructional days.
In addition, the committee passed out Senate Bill 934, also sponsored by Pennycuick. This bill aims to improve the residency verification process within Pennsylvania’s cyber charter school system.
Pennycuick noted, “As the number of students enrolled in cyber charters continues to grow, we must ensure that the residency of these students is verified on a continuing basis.”
The legislation will require parents to submit verification of student residency twice each academic year and provide greater clarity on reporting responsibilities. This measure better protects taxpayer dollars and ensures the integrity of the cyber charter school system, says Pennycuick.
The bills now go to the full Senate for consideration.
2025 CPA Firm Tech Report: Expert Guidance on Where to Invest Next
Artificial intelligence (AI) is becoming a must-have business tool. For CPA firms, AI is transforming core functions such as audit, forecasting, and client advisory. The firms embracing it are increasing efficiency, improving accuracy, and scaling smarter.
In this comprehensive report from the PICPA, 2025 CPA Firm Tech Report: Expert Guidance on Where to Invest Next, you’ll discover how CPA firms are putting AI to work to generate predictive financial forecasts in real time, detect anomalies and reduce audit risks, and scale operations without massive infrastructure costs.
All PICPA members have free access to the report.
Proposed Legislation Offers Targeted Tax Amnesty
The financial strain brought on by the COVID-19 pandemic caused many Pennsylvania families and businesses to fall behind on their tax obligations, says state Rep. Johanny Cepeda-Freytiz (D-Berks). Recognizing the lingering impact, Cepeda-Freytiz introduced legislation that would establish a targeted tax amnesty program focused specifically on delinquent taxes that became overdue during the pandemic.
House Bill 1964 establishes a 90-day tax amnesty program for those with unpaid taxes that became delinquent during taxable years affected by COVID-19. In exchange for paying these taxes, taxpayers would receive a full waiver of interest, penalties, and fees related to any delinquency. Cepeda-Freytiz believes this program will encourage taxpayers to come back into compliance with their obligations, provide relief for families and businesses, and bring in significant revenue for Pennsylvania.
House Bill 1694 has been referred to the House Finance Committee.
Bill Introduced to Boost AI and Data Center Investment Statewide
Pennsylvania could soon become a national hub for artificial intelligence (AI) and data center growth under legislation introduced by Sens. Greg Rothman (R-Cumberland) and Tracy Pennycuick (R-Montgomery). Senate Bill 939 proposes the creation of a Commonwealth Opportunity Zone (COZ) to attract cutting-edge industries through regulatory relief and streamlined development.
Unlike geographically limited economic development zones, the proposed COZ would apply across the entire state, ensuring that every region of Pennsylvania – urban, suburban, and rural – can compete for data center and AI investment. Rothman and Pennycuick say this approach promotes broad-based job creation and economic benefit.
A centerpiece of the bill is a fast-track permitting process for data center development. This would ensure timely, consistent, and predictable approvals, helping developers avoid delays and uncertainty. The legislation also sets uniform zoning standards that treat data centers similarly to other industrial facilities, while still preserving local control through reasonable ordinance parameters.
Another feature of Senate Bill 939 is the creation of a statewide regulatory sandbox for AI, data centers, and emerging technologies. This sandbox would provide a structured way for industry leaders and state regulators to work together to identify and eliminate outdated or burdensome regulations. The goal here is to accelerate innovation while maintaining public safeguards.
Senate Bill 939 has been referred to the Senate Communications and Technology Committee for further consideration.
New Federal Deduction to Deliver $1.1 Billion in Tax Relief to Pa. Seniors
The Pennsylvania Independent Fiscal Office (IFO) finds that a recently enacted federal tax deduction for seniors will provide significant income tax relief to Pennsylvania retirees, though the benefits will vary widely depending on income.
The deduction, created under the federal tax legislation passed in July, provides an additional $6,000 standard deduction for single filers and $12,000 for joint filers who are age 65 or older. The extra deduction is in addition to the standard deduction and is available whether or not taxpayers itemize.
According to the IFO, the new deduction is projected to reduce federal income tax liability for Pennsylvania seniors by approximately $1.1 billion for tax year 2025.
The IFO notes, however, that nearly all the benefit accrues to taxpayers who have enough income to owe federal income tax. Since the deduction is phased out at modified adjusted gross income levels between $75,000 and $175,000 for single filers and $150,000 to $250,000 for joint filers, the full value is concentrated among middle- and upper-income seniors.
The IFO emphasizes that lower-income seniors – those who already owe little or no federal income tax – will see little to no benefit. For example, a single senior with income below the enhanced federal standard deduction will not owe any income tax and therefore won’t benefit from the additional deduction.
The deduction will be available for tax years 2025 through 2028.
Legislative Update - Week Ending July 18, 2025
In this issue: Pennsylvania House adopts budget proposal; Pa. constitutional amendment to eliminate school property tax; Cyber school measures clear Pa. Senate committee; and more.
by PICPA Government Relations
Jul 18, 2025, 10:09 AM
- House Adopts Budget Proposal as Stalemate Drags On
- Constitutional Amendment Proposed to Eliminate School Property Taxes
- Cyber School Reform Measures Clear Senate Committee
- 2025 CPA Firm Tech Report: Expert Guidance on Where to Invest Next
- Proposed Legislation Offers Targeted Tax Amnesty
- Bill Introduced to Boost AI and Data Center Investment Statewide
- New Federal Deduction to Deliver $1.1 Billion in Tax Relief to Pa. Seniors
House Adopts Budget Proposal as Stalemate Drags On
Three weeks into the new fiscal year, Pennsylvania’s budget impasse continues, but the state House took a step forward this week by passing its version of the 2025-2026 state spending plan. The move adds urgency to the negotiations between the Senate and governor’s office as pressure mounts to finalize a deal.
The House-approved plan – House Bill 1330 – spends $50.6 billion, about $900 million less than Gov. Josh Shapiro’s February budget framework, with proposed increases in funding for public education, mental health services, and infrastructure investment. House leaders also included a series of tax and revenue provisions aimed at balancing the plan without raising broad-based taxes.
Despite the House’s action, a final deal remains elusive as the Republican-controlled Senate has expressed concerns about the spending level and certain policy provisions. A spokesperson for Senate Majority Leader Sen. Joe Pittman (R-Indiana) told The Center Square, “A procedural process needs to occur while we continue to work to reach an agreement. We do not view HB 1330 in its current form as a final product.”
While both chambers and the governor’s office have held discussions behind closed doors, the process remains stalled. Without an enacted budget, some state payments could soon face disruption, and local governments, school districts, and service providers are growing increasingly anxious.
Throughout the negotiations, the PICPA remains engaged in advocating for its key legislative priorities. The PICPA will continue to monitor developments and work with policymakers to ensure the final budget reflects sound fiscal policy and supports Pennsylvania’s long-term growth.
Constitutional Amendment Proposed to Eliminate School Property Taxes
State Sens. Chris Gebhard (R-Lebanon) and Doug Mastriano (R-Franklin) introduced a constitutional amendment to eliminate school property taxes in Pennsylvania.
Senate Bill 929 would prohibit school districts from collecting property taxes beginning July 1, 2029. The General Assembly would be required to find alternative methods to fund Pennsylvania’s public school system.
If this proposed amendment is approved by the General Assembly in two consecutive legislative sessions, it will be placed on the ballot. It will then be up to Pennsylvania voters to decide if school taxes should be eliminated in the commonwealth.
The bill was referred to the Senate State Government Committee.
Cyber School Reform Measures Clear Senate Committee
The Senate Education Committee this week voted out two bills that further reform Pennsylvania’s cyber charter schools.
Senate Bill 927, sponsor Sen. Tracy Pennycuick (R-Montgomery), will ensure that cyber charter school wellness checks are conducted as originally intended. Act 55 of 2024 mandates that cyber charter schools conduct wellness checks at least once during any week consisting of three or more instructional days.
In addition, the committee passed out Senate Bill 934, also sponsored by Pennycuick. This bill aims to improve the residency verification process within Pennsylvania’s cyber charter school system.
Pennycuick noted, “As the number of students enrolled in cyber charters continues to grow, we must ensure that the residency of these students is verified on a continuing basis.”
The legislation will require parents to submit verification of student residency twice each academic year and provide greater clarity on reporting responsibilities. This measure better protects taxpayer dollars and ensures the integrity of the cyber charter school system, says Pennycuick.
The bills now go to the full Senate for consideration.
2025 CPA Firm Tech Report: Expert Guidance on Where to Invest Next
Artificial intelligence (AI) is becoming a must-have business tool. For CPA firms, AI is transforming core functions such as audit, forecasting, and client advisory. The firms embracing it are increasing efficiency, improving accuracy, and scaling smarter.
In this comprehensive report from the PICPA, 2025 CPA Firm Tech Report: Expert Guidance on Where to Invest Next, you’ll discover how CPA firms are putting AI to work to generate predictive financial forecasts in real time, detect anomalies and reduce audit risks, and scale operations without massive infrastructure costs.
All PICPA members have free access to the report.
Proposed Legislation Offers Targeted Tax Amnesty
The financial strain brought on by the COVID-19 pandemic caused many Pennsylvania families and businesses to fall behind on their tax obligations, says state Rep. Johanny Cepeda-Freytiz (D-Berks). Recognizing the lingering impact, Cepeda-Freytiz introduced legislation that would establish a targeted tax amnesty program focused specifically on delinquent taxes that became overdue during the pandemic.
House Bill 1964 establishes a 90-day tax amnesty program for those with unpaid taxes that became delinquent during taxable years affected by COVID-19. In exchange for paying these taxes, taxpayers would receive a full waiver of interest, penalties, and fees related to any delinquency. Cepeda-Freytiz believes this program will encourage taxpayers to come back into compliance with their obligations, provide relief for families and businesses, and bring in significant revenue for Pennsylvania.
House Bill 1694 has been referred to the House Finance Committee.
Bill Introduced to Boost AI and Data Center Investment Statewide
Pennsylvania could soon become a national hub for artificial intelligence (AI) and data center growth under legislation introduced by Sens. Greg Rothman (R-Cumberland) and Tracy Pennycuick (R-Montgomery). Senate Bill 939 proposes the creation of a Commonwealth Opportunity Zone (COZ) to attract cutting-edge industries through regulatory relief and streamlined development.
Unlike geographically limited economic development zones, the proposed COZ would apply across the entire state, ensuring that every region of Pennsylvania – urban, suburban, and rural – can compete for data center and AI investment. Rothman and Pennycuick say this approach promotes broad-based job creation and economic benefit.
A centerpiece of the bill is a fast-track permitting process for data center development. This would ensure timely, consistent, and predictable approvals, helping developers avoid delays and uncertainty. The legislation also sets uniform zoning standards that treat data centers similarly to other industrial facilities, while still preserving local control through reasonable ordinance parameters.
Another feature of Senate Bill 939 is the creation of a statewide regulatory sandbox for AI, data centers, and emerging technologies. This sandbox would provide a structured way for industry leaders and state regulators to work together to identify and eliminate outdated or burdensome regulations. The goal here is to accelerate innovation while maintaining public safeguards.
Senate Bill 939 has been referred to the Senate Communications and Technology Committee for further consideration.
New Federal Deduction to Deliver $1.1 Billion in Tax Relief to Pa. Seniors
The Pennsylvania Independent Fiscal Office (IFO) finds that a recently enacted federal tax deduction for seniors will provide significant income tax relief to Pennsylvania retirees, though the benefits will vary widely depending on income.
The deduction, created under the federal tax legislation passed in July, provides an additional $6,000 standard deduction for single filers and $12,000 for joint filers who are age 65 or older. The extra deduction is in addition to the standard deduction and is available whether or not taxpayers itemize.
According to the IFO, the new deduction is projected to reduce federal income tax liability for Pennsylvania seniors by approximately $1.1 billion for tax year 2025.
The IFO notes, however, that nearly all the benefit accrues to taxpayers who have enough income to owe federal income tax. Since the deduction is phased out at modified adjusted gross income levels between $75,000 and $175,000 for single filers and $150,000 to $250,000 for joint filers, the full value is concentrated among middle- and upper-income seniors.
The IFO emphasizes that lower-income seniors – those who already owe little or no federal income tax – will see little to no benefit. For example, a single senior with income below the enhanced federal standard deduction will not owe any income tax and therefore won’t benefit from the additional deduction.
The deduction will be available for tax years 2025 through 2028.
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