The Responsible Budgeting Act establishes a framework for limiting fiscal year spending in Pennsylvania, creating a new Commonwealth Reserve Fund, and outlining procedures for emergency spending. The limit on fiscal year spending is calculated based on the previous year's enacted spending, adjusted by a structural balance factor that considers the growth of the state's economy and a deficit brake mechanism. The act allows for adjustments to the spending limit in response to changes in revenue or emergencies, with emergency spending requiring a two-thirds legislative vote and being offset in subsequent years.

Additionally, the Commonwealth Reserve Fund is created to manage budget surpluses, with funds appropriated for specific purposes and interest earnings reinvested. When the fund reaches 15% of the current spending limit, at least 50% of further surpluses must be rebated to taxpayers, while the remainder can be used to reduce state debt or other liabilities. The act also includes provisions for automatic spending levels if the General Assembly fails to enact a budget by the end of the fiscal year, ensuring continuity in funding. The act is set to take effect immediately and will apply to the upcoming fiscal year and beyond.