The budget also features a record-low deficit of RM33.6 million, compared to RM514.5 million in 2024.

Of the total, RM220 million will go to development projects, including those under the Penang Transport Master Plan, the Silicon Island reclamation project, and road and civil-related works surrounding the Penang International Airport expansion.

Chief minister Chow Kon Yeow said the smaller budget and reduced deficit show the state’s focus on prudent spending, especially as revenues continue to decline.

He said that as of Jan 1 next year, the balance in the consolidated funds is projected to be about RM50 million, a significant drop from RM330.03 million at the end of 2023.

“Through prudent financial management, the state remains steadfast in its commitment to fostering economic growth and improving the socio-economic development of the people,” he said when tabling the budget in the state assembly.

Under the 2025 budget, the proposed operating expenditure is RM940.22 million, which is to pay for emoluments, services and supplies, asset management, grants and fixed fees, and other costs.

Chow said the lower operating expenditure is part of an effort to maintain a surplus in the consolidated funds account, which has declined steadily from RM1.154 billion in 2019 to RM330.03 million in 2023.

Development expenditure for 2025 is set at RM220 million, a drop of 38.6% from the RM374.7 million allocated for 2024.

He said the balance of the consolidated funds has been steadily declining over the five years from 2019. At the end of 2019, the balance stood at RM1.154 billion, dropping to RM887.7 million in 2020, RM848.81 million in 2021, RM688.85 million in 2022, and RM330.03 million a year later.

Chow said the state government has set a revenue target of RM906.5 million for 2025, a 70% increase from the 2024 target of RM533.08 million.

“This significant increase reflects the government’s determination to intensify efforts to boost revenue collection in 2025. With the commitment of all state departments, the government is optimistic that the revenue target will be achieved,” he said.

He said the projected revenue includes RM223.6 million from tax collection, RM570.4 million from non-tax revenue, and RM112.5 million from non-revenue receipts.

Separately, he announced a special financial assistance for state civil servants as a token of appreciation.

The assistance will amount to half a month’s salary or a minimum of RM1,000, to be banked in next month. This will cost the state RM6.88 million.

He also said special financial aid of RM300 will be given to al-Quran and Fardu Ain class (Kafa) supervisors and teachers, as well as for those teaching in primary and secondary religious schools.

The aid will also be distributed to tahfiz teachers and those in “pondok” schools as well as teachers at Islamic preschools and staff of private Chinese schools in the state.