
Shapiro Unveils $51.4B Budget Proposal
Calls for 7% increase in spending from FY25 and deficit spending of $1.6B
Calls for 7% increase in spending from FY25 and deficit spending of $1.6B
Shapiro budget calls for spending of $51B with anticipated $1.5B deficit
Says “it’s time for us to be more competitive, it’s time for us to act”
“This was not some technical glitch. They were very purposeful in trying to wreak havoc.”
Critics questioning Gov. Josh Shapiro’s allegiances over fed’s interference
PA executives sound off on decision’s impact on the Commonwealth
Here are the top five stories from Gov. Josh Shapiro’s administration in 2024
“Committed to uplifting small businesses and revitalizing the Main Streets” in Pennsylvania
Plans to divert federal funds from seven PA highway projects to regional mass transit
Designed to speed up government, drive economic growth, and make Pennsylvania more competitive
Gov. Josh Shapiro delivered his third budget address to a joint session of the Pennsylvania General Assembly and is requesting more than $51 billion in spending.
That figure is $3.5 billion or 7.3 percent more than FY25 with revenues anticipated at $49.8 billion for deficit spending of approximately $1.6 billion. Shapiro also believes that by “working together in support of commonsense Pennsylvania principles,” that the Commonwealth can retain $6.4 billion in the state’s Rainy Day Fund by the end of June 2026.
The governor championed the legalization of adult use cannabis as an untapped source of revenue for the state.
“We’re losing out on revenue that’s going to other states instead of helping us here,” he said to applause from fellow Democrats. “We’re losing out on an industry that, over the first five years, will bring in $1.3 billion in new revenue to our Commonwealth. I ask you to come together and send to my desk a bill that legalizes adult-use cannabis and expunges the records of people who have been convicted for nonviolent possession of small amounts of marijuana.”
Shapiro also called for regulating “skill games” – those casino-like devices found at gas stations and local shops around the Commonwealth.
“Every time somebody puts a buck into one of those unregulated machines, it undermines the Lottery and the critical services it funds for our seniors like prescriptions and meals,” said the governor. “The Pennsylvania Lottery lost an estimated $200 million over the last 5 years, primarily due to these unregulated skill games. Our seniors deserve better.”
Speaker of the House Rep. Joanna McClinton (D-Delaware/ Philadelphia) tweeted that, “It is our JOB to invest in our neighbors. For too long funding education, providing our students with free breakfast, & protecting our most vulnerable neighbors was neglected. In 2024 we progressed & in 2025 we’re going to continue the work of investing in our FUTURE!!!”
Here are some of the budget proposal details. A 36-page executive summary of the FY26 budget can be found here.
The budget proposal calls for $526 million in line with the Basic Education Funding Commission report. It increases basic education funding by $75 million, proposing more than $8.2 billion in total to support public schools across Pennsylvania. The proposal increases special education funding by $40 million. The 2025-26 budget recommends establishing a statewide base cyber tuition rate of $8,000 per student per year and will better align tuition with the actual costs of providing an online education. This reform will save school districts an estimated $378 million annually.
Shapiro once again called for Pennsylvania to raise its minimum wage from $7.25 to $15 per hour. The proposal says the increase will generate economic activity and increase the purchasing power of PA residents to add approximately $100 million annually in increased revenue
The 2025-26 budget repeals the Waterfront Development Tax Credit, the Video Game Development Tax Credit, and the Manufacturing Tax Credit and creates the AdvancePA tax credit, a new $10 million tax credit to provide more flexibility for securing important deals and incentivizing high-paying job creation within the Commonwealth.
The proposal also calls for the Commonwealth to legalize adult use cannabis. In addition to the immediate expungement of the records of those incarcerated for only a possession-related offense attributed to cannabis, the budget proposes to invest $10 million in restorative justice initiatives from adult use cannabis proceeds. The proposal also includes $25 million to assist new small and small diverse businesses attempting to enter the new marketplace.
Mass transit is also prominently featured in the proposal, calling for 9.43 percent of all Sales and Use tax to be deposited unto the Public Transportation Trust Fund. This increase would put an additional $292.5 million into mass transit across the Commonwealth.
Under current law, Pennsylvania’s CNIT rate is scheduled to decrease 0.5% every year until it reaches 4.99% in 2031. Under Shapiro’s proposal, the tax cuts would be expedited by two years, reducing the current tax rate each year by 0.75%, resulting in reaching the 4.99 percent threshold in 2029.
The governor anticipates Pennsylvania businesses would realize $10.5 billion in savings as a result of the tax cut proposal.
Total Expenses ($51.47B)
Anticipated Revenues ($49.87B)
“Today’s budget proposal is a very solid plan to deliver critical growth, freedom, and opportunity to every Pennsylvanian,” said Senate Democratic Leader Jay Costa (D-Allegheny). “Governor Shapiro’s plan is a commonsense approach to progress in our state, balancing fiscal responsibility with a bold vision for improving the lives of our families and workers.”
Sen. Vincent Hughes (D-Philadelphia), Democratic Appropriations Chair, said, “This budget is a testament to Governor Shapiro’s commitment to hardworking Pennsylvania’s. It funds student teachers and schools, childcare providers, direct care workers, and opportunities for young people and adults to develop new skills and get high paying jobs. It introduces new money for affordable housing, lower utility costs, and tax relief for homeowners. We want the people of Pennsylvania to know we are listening, and we are fighting for them. We are serving the people of Pennsylvania, not a handful of millionaires and billionaires.”
Rep. Seth Grove (R-York) did not hide his displeasure at what the governor had to offer.
“Shapiro came into office with a budget of $42.7 billion and an $8 billion budget surplus. In just his third budget, he has eviscerated the $8 billion budgetary surplus and is proposing to balloon the state budget by $9 billion from when he took office by raiding the Rainy Day Fund. This level of financial mismanagement, even for Pennsylvania, is unprecedented.
“What are the outcomes of all this spending? Do we have a growing population? Have our students’ test scores drastically improved? Is our economic growth off the charts? What exactly is our return on investment?
“It’s simple, taxpayers get the status quo. Bigger government, bigger spending and no improvements. Garbage in, and garbage out.”
Rep. Tim O’Neal (R-Washington) said that the proposal is just more of the same.
“It spends too much, eliminates our budget surplus and creates taxes. The current budget required spending $3.3 billion from the budget surplus. Instead of tightening the reins for the coming fiscal year, the governor wants to increase spending by 7.5%. This makes no sense and is not sustainable.
“The only two options we have are to raise taxes or grow our economy. I would be hard-pressed to find anyone who believes raising taxes is the answer. Luckily, this is just the start of the annual budget process. I will work hard in the coming months to advocate for a plan that will set Pennsylvania on the path to grow.”
The governor’s proposal also says Pennsylvania’s real gross state product (GSP) is expected to grow at an average annual rate of 1.5 percent through 2029. In the same period, personal income is expected to rise by 4.4 percent annually.
Updated to include quotes from Costa and Hughes
Gov. Josh Shapiro delivered his third budget address to a joint session of the Pennsylvania General Assembly and is requesting more than $51 billion in spending.
That figure is $3.5 billion or 7.3 percent more than FY25 with revenues anticipated at $49.8 billion for deficit spending of approximately $1.6 billion. Shapiro also believes that by “working together in support of commonsense Pennsylvania principles,” that the Commonwealth can retain $6.4 billion in the state’s Rainy Day Fund by the end of June 2026.
The governor championed the legalization of adult use cannabis as an untapped source of revenue for the state.
“We’re losing out on revenue that’s going to other states instead of helping us here,” he said to applause from fellow Democrats. “We’re losing out on an industry that, over the first five years, will bring in $1.3 billion in new revenue to our Commonwealth. I ask you to come together and send to my desk a bill that legalizes adult-use cannabis and expunges the records of people who have been convicted for nonviolent possession of small amounts of marijuana.”
Shapiro also called for regulating “skill games” – those casino-like devices found at gas stations and local shops around the Commonwealth.
“Every time somebody puts a buck into one of those unregulated machines, it undermines the Lottery and the critical services it funds for our seniors like prescriptions and meals,” said the governor. “The Pennsylvania Lottery lost an estimated $200 million over the last 5 years, primarily due to these unregulated skill games. Our seniors deserve better.”
Speaker of the House Rep. Joanna McClinton (D-Delaware/ Philadelphia) tweeted that, “It is our JOB to invest in our neighbors. For too long funding education, providing our students with free breakfast, & protecting our most vulnerable neighbors was neglected. In 2024 we progressed & in 2025 we’re going to continue the work of investing in our FUTURE!!!”
Here are some of the budget proposal details. A 36-page executive summary of the FY26 budget can be found here.
The budget proposal calls for $526 million in line with the Basic Education Funding Commission report. It increases basic education funding by $75 million, proposing more than $8.2 billion in total to support public schools across Pennsylvania. The proposal increases special education funding by $40 million. The 2025-26 budget recommends establishing a statewide base cyber tuition rate of $8,000 per student per year and will better align tuition with the actual costs of providing an online education. This reform will save school districts an estimated $378 million annually.
Shapiro once again called for Pennsylvania to raise its minimum wage from $7.25 to $15 per hour. The proposal says the increase will generate economic activity and increase the purchasing power of PA residents to add approximately $100 million annually in increased revenue
The 2025-26 budget repeals the Waterfront Development Tax Credit, the Video Game Development Tax Credit, and the Manufacturing Tax Credit and creates the AdvancePA tax credit, a new $10 million tax credit to provide more flexibility for securing important deals and incentivizing high-paying job creation within the Commonwealth.
The proposal also calls for the Commonwealth to legalize adult use cannabis. In addition to the immediate expungement of the records of those incarcerated for only a possession-related offense attributed to cannabis, the budget proposes to invest $10 million in restorative justice initiatives from adult use cannabis proceeds. The proposal also includes $25 million to assist new small and small diverse businesses attempting to enter the new marketplace.
Mass transit is also prominently featured in the proposal, calling for 9.43 percent of all Sales and Use tax to be deposited unto the Public Transportation Trust Fund. This increase would put an additional $292.5 million into mass transit across the Commonwealth.
Under current law, Pennsylvania’s CNIT rate is scheduled to decrease 0.5% every year until it reaches 4.99% in 2031. Under Shapiro’s proposal, the tax cuts would be expedited by two years, reducing the current tax rate each year by 0.75%, resulting in reaching the 4.99 percent threshold in 2029.
The governor anticipates Pennsylvania businesses would realize $10.5 billion in savings as a result of the tax cut proposal.
Total Expenses ($51.47B)
Anticipated Revenues ($49.87B)
“Today’s budget proposal is a very solid plan to deliver critical growth, freedom, and opportunity to every Pennsylvanian,” said Senate Democratic Leader Jay Costa (D-Allegheny). “Governor Shapiro’s plan is a commonsense approach to progress in our state, balancing fiscal responsibility with a bold vision for improving the lives of our families and workers.”
Sen. Vincent Hughes (D-Philadelphia), Democratic Appropriations Chair, said, “This budget is a testament to Governor Shapiro’s commitment to hardworking Pennsylvania’s. It funds student teachers and schools, childcare providers, direct care workers, and opportunities for young people and adults to develop new skills and get high paying jobs. It introduces new money for affordable housing, lower utility costs, and tax relief for homeowners. We want the people of Pennsylvania to know we are listening, and we are fighting for them. We are serving the people of Pennsylvania, not a handful of millionaires and billionaires.”
Rep. Seth Grove (R-York) did not hide his displeasure at what the governor had to offer.
“Shapiro came into office with a budget of $42.7 billion and an $8 billion budget surplus. In just his third budget, he has eviscerated the $8 billion budgetary surplus and is proposing to balloon the state budget by $9 billion from when he took office by raiding the Rainy Day Fund. This level of financial mismanagement, even for Pennsylvania, is unprecedented.
“What are the outcomes of all this spending? Do we have a growing population? Have our students’ test scores drastically improved? Is our economic growth off the charts? What exactly is our return on investment?
“It’s simple, taxpayers get the status quo. Bigger government, bigger spending and no improvements. Garbage in, and garbage out.”
Rep. Tim O’Neal (R-Washington) said that the proposal is just more of the same.
“It spends too much, eliminates our budget surplus and creates taxes. The current budget required spending $3.3 billion from the budget surplus. Instead of tightening the reins for the coming fiscal year, the governor wants to increase spending by 7.5%. This makes no sense and is not sustainable.
“The only two options we have are to raise taxes or grow our economy. I would be hard-pressed to find anyone who believes raising taxes is the answer. Luckily, this is just the start of the annual budget process. I will work hard in the coming months to advocate for a plan that will set Pennsylvania on the path to grow.”
The governor’s proposal also says Pennsylvania’s real gross state product (GSP) is expected to grow at an average annual rate of 1.5 percent through 2029. In the same period, personal income is expected to rise by 4.4 percent annually.
Updated to include quotes from Costa and Hughes
Gov. Josh Shapiro delivered his third budget address to a joint session of the Pennsylvania General Assembly and is requesting more than $51 billion in spending.
That figure is $3.5 billion or 7.3 percent more than FY25 with revenues anticipated at $49.8 billion for deficit spending of approximately $1.6 billion. Shapiro also believes that by “working together in support of commonsense Pennsylvania principles,” that the Commonwealth can retain $6.4 billion in the state’s Rainy Day Fund by the end of June 2026.
The governor championed the legalization of adult use cannabis as an untapped source of revenue for the state.
“We’re losing out on revenue that’s going to other states instead of helping us here,” he said to applause from fellow Democrats. “We’re losing out on an industry that, over the first five years, will bring in $1.3 billion in new revenue to our Commonwealth. I ask you to come together and send to my desk a bill that legalizes adult-use cannabis and expunges the records of people who have been convicted for nonviolent possession of small amounts of marijuana.”
Shapiro also called for regulating “skill games” – those casino-like devices found at gas stations and local shops around the Commonwealth.
“Every time somebody puts a buck into one of those unregulated machines, it undermines the Lottery and the critical services it funds for our seniors like prescriptions and meals,” said the governor. “The Pennsylvania Lottery lost an estimated $200 million over the last 5 years, primarily due to these unregulated skill games. Our seniors deserve better.”
Speaker of the House Rep. Joanna McClinton (D-Delaware/ Philadelphia) tweeted that, “It is our JOB to invest in our neighbors. For too long funding education, providing our students with free breakfast, & protecting our most vulnerable neighbors was neglected. In 2024 we progressed & in 2025 we’re going to continue the work of investing in our FUTURE!!!”
Here are some of the budget proposal details. A 36-page executive summary of the FY26 budget can be found here.
The budget proposal calls for $526 million in line with the Basic Education Funding Commission report. It increases basic education funding by $75 million, proposing more than $8.2 billion in total to support public schools across Pennsylvania. The proposal increases special education funding by $40 million. The 2025-26 budget recommends establishing a statewide base cyber tuition rate of $8,000 per student per year and will better align tuition with the actual costs of providing an online education. This reform will save school districts an estimated $378 million annually.
Shapiro once again called for Pennsylvania to raise its minimum wage from $7.25 to $15 per hour. The proposal says the increase will generate economic activity and increase the purchasing power of PA residents to add approximately $100 million annually in increased revenue
The 2025-26 budget repeals the Waterfront Development Tax Credit, the Video Game Development Tax Credit, and the Manufacturing Tax Credit and creates the AdvancePA tax credit, a new $10 million tax credit to provide more flexibility for securing important deals and incentivizing high-paying job creation within the Commonwealth.
The proposal also calls for the Commonwealth to legalize adult use cannabis. In addition to the immediate expungement of the records of those incarcerated for only a possession-related offense attributed to cannabis, the budget proposes to invest $10 million in restorative justice initiatives from adult use cannabis proceeds. The proposal also includes $25 million to assist new small and small diverse businesses attempting to enter the new marketplace.
Mass transit is also prominently featured in the proposal, calling for 9.43 percent of all Sales and Use tax to be deposited unto the Public Transportation Trust Fund. This increase would put an additional $292.5 million into mass transit across the Commonwealth.
Under current law, Pennsylvania’s CNIT rate is scheduled to decrease 0.5% every year until it reaches 4.99% in 2031. Under Shapiro’s proposal, the tax cuts would be expedited by two years, reducing the current tax rate each year by 0.75%, resulting in reaching the 4.99 percent threshold in 2029.
The governor anticipates Pennsylvania businesses would realize $10.5 billion in savings as a result of the tax cut proposal.
Total Expenses ($51.47B)
Anticipated Revenues ($49.87B)
“Today’s budget proposal is a very solid plan to deliver critical growth, freedom, and opportunity to every Pennsylvanian,” said Senate Democratic Leader Jay Costa (D-Allegheny). “Governor Shapiro’s plan is a commonsense approach to progress in our state, balancing fiscal responsibility with a bold vision for improving the lives of our families and workers.”
Sen. Vincent Hughes (D-Philadelphia), Democratic Appropriations Chair, said, “This budget is a testament to Governor Shapiro’s commitment to hardworking Pennsylvania’s. It funds student teachers and schools, childcare providers, direct care workers, and opportunities for young people and adults to develop new skills and get high paying jobs. It introduces new money for affordable housing, lower utility costs, and tax relief for homeowners. We want the people of Pennsylvania to know we are listening, and we are fighting for them. We are serving the people of Pennsylvania, not a handful of millionaires and billionaires.”
Rep. Seth Grove (R-York) did not hide his displeasure at what the governor had to offer.
“Shapiro came into office with a budget of $42.7 billion and an $8 billion budget surplus. In just his third budget, he has eviscerated the $8 billion budgetary surplus and is proposing to balloon the state budget by $9 billion from when he took office by raiding the Rainy Day Fund. This level of financial mismanagement, even for Pennsylvania, is unprecedented.
“What are the outcomes of all this spending? Do we have a growing population? Have our students’ test scores drastically improved? Is our economic growth off the charts? What exactly is our return on investment?
“It’s simple, taxpayers get the status quo. Bigger government, bigger spending and no improvements. Garbage in, and garbage out.”
Rep. Tim O’Neal (R-Washington) said that the proposal is just more of the same.
“It spends too much, eliminates our budget surplus and creates taxes. The current budget required spending $3.3 billion from the budget surplus. Instead of tightening the reins for the coming fiscal year, the governor wants to increase spending by 7.5%. This makes no sense and is not sustainable.
“The only two options we have are to raise taxes or grow our economy. I would be hard-pressed to find anyone who believes raising taxes is the answer. Luckily, this is just the start of the annual budget process. I will work hard in the coming months to advocate for a plan that will set Pennsylvania on the path to grow.”
The governor’s proposal also says Pennsylvania’s real gross state product (GSP) is expected to grow at an average annual rate of 1.5 percent through 2029. In the same period, personal income is expected to rise by 4.4 percent annually.
Updated to include quotes from Costa and Hughes
Gov. Josh Shapiro delivered his third budget address to a joint session of the Pennsylvania General Assembly and is requesting more than $51 billion in spending.
That figure is $3.5 billion or 7.3 percent more than FY25 with revenues anticipated at $49.8 billion for deficit spending of approximately $1.6 billion. Shapiro also believes that by “working together in support of commonsense Pennsylvania principles,” that the Commonwealth can retain $6.4 billion in the state’s Rainy Day Fund by the end of June 2026.
The governor championed the legalization of adult use cannabis as an untapped source of revenue for the state.
“We’re losing out on revenue that’s going to other states instead of helping us here,” he said to applause from fellow Democrats. “We’re losing out on an industry that, over the first five years, will bring in $1.3 billion in new revenue to our Commonwealth. I ask you to come together and send to my desk a bill that legalizes adult-use cannabis and expunges the records of people who have been convicted for nonviolent possession of small amounts of marijuana.”
Shapiro also called for regulating “skill games” – those casino-like devices found at gas stations and local shops around the Commonwealth.
“Every time somebody puts a buck into one of those unregulated machines, it undermines the Lottery and the critical services it funds for our seniors like prescriptions and meals,” said the governor. “The Pennsylvania Lottery lost an estimated $200 million over the last 5 years, primarily due to these unregulated skill games. Our seniors deserve better.”
Speaker of the House Rep. Joanna McClinton (D-Delaware/ Philadelphia) tweeted that, “It is our JOB to invest in our neighbors. For too long funding education, providing our students with free breakfast, & protecting our most vulnerable neighbors was neglected. In 2024 we progressed & in 2025 we’re going to continue the work of investing in our FUTURE!!!”
Here are some of the budget proposal details. A 36-page executive summary of the FY26 budget can be found here.
The budget proposal calls for $526 million in line with the Basic Education Funding Commission report. It increases basic education funding by $75 million, proposing more than $8.2 billion in total to support public schools across Pennsylvania. The proposal increases special education funding by $40 million. The 2025-26 budget recommends establishing a statewide base cyber tuition rate of $8,000 per student per year and will better align tuition with the actual costs of providing an online education. This reform will save school districts an estimated $378 million annually.
Shapiro once again called for Pennsylvania to raise its minimum wage from $7.25 to $15 per hour. The proposal says the increase will generate economic activity and increase the purchasing power of PA residents to add approximately $100 million annually in increased revenue
The 2025-26 budget repeals the Waterfront Development Tax Credit, the Video Game Development Tax Credit, and the Manufacturing Tax Credit and creates the AdvancePA tax credit, a new $10 million tax credit to provide more flexibility for securing important deals and incentivizing high-paying job creation within the Commonwealth.
The proposal also calls for the Commonwealth to legalize adult use cannabis. In addition to the immediate expungement of the records of those incarcerated for only a possession-related offense attributed to cannabis, the budget proposes to invest $10 million in restorative justice initiatives from adult use cannabis proceeds. The proposal also includes $25 million to assist new small and small diverse businesses attempting to enter the new marketplace.
Mass transit is also prominently featured in the proposal, calling for 9.43 percent of all Sales and Use tax to be deposited unto the Public Transportation Trust Fund. This increase would put an additional $292.5 million into mass transit across the Commonwealth.
Under current law, Pennsylvania’s CNIT rate is scheduled to decrease 0.5% every year until it reaches 4.99% in 2031. Under Shapiro’s proposal, the tax cuts would be expedited by two years, reducing the current tax rate each year by 0.75%, resulting in reaching the 4.99 percent threshold in 2029.
The governor anticipates Pennsylvania businesses would realize $10.5 billion in savings as a result of the tax cut proposal.
Total Expenses ($51.47B)
Anticipated Revenues ($49.87B)
“Today’s budget proposal is a very solid plan to deliver critical growth, freedom, and opportunity to every Pennsylvanian,” said Senate Democratic Leader Jay Costa (D-Allegheny). “Governor Shapiro’s plan is a commonsense approach to progress in our state, balancing fiscal responsibility with a bold vision for improving the lives of our families and workers.”
Sen. Vincent Hughes (D-Philadelphia), Democratic Appropriations Chair, said, “This budget is a testament to Governor Shapiro’s commitment to hardworking Pennsylvania’s. It funds student teachers and schools, childcare providers, direct care workers, and opportunities for young people and adults to develop new skills and get high paying jobs. It introduces new money for affordable housing, lower utility costs, and tax relief for homeowners. We want the people of Pennsylvania to know we are listening, and we are fighting for them. We are serving the people of Pennsylvania, not a handful of millionaires and billionaires.”
Rep. Seth Grove (R-York) did not hide his displeasure at what the governor had to offer.
“Shapiro came into office with a budget of $42.7 billion and an $8 billion budget surplus. In just his third budget, he has eviscerated the $8 billion budgetary surplus and is proposing to balloon the state budget by $9 billion from when he took office by raiding the Rainy Day Fund. This level of financial mismanagement, even for Pennsylvania, is unprecedented.
“What are the outcomes of all this spending? Do we have a growing population? Have our students’ test scores drastically improved? Is our economic growth off the charts? What exactly is our return on investment?
“It’s simple, taxpayers get the status quo. Bigger government, bigger spending and no improvements. Garbage in, and garbage out.”
Rep. Tim O’Neal (R-Washington) said that the proposal is just more of the same.
“It spends too much, eliminates our budget surplus and creates taxes. The current budget required spending $3.3 billion from the budget surplus. Instead of tightening the reins for the coming fiscal year, the governor wants to increase spending by 7.5%. This makes no sense and is not sustainable.
“The only two options we have are to raise taxes or grow our economy. I would be hard-pressed to find anyone who believes raising taxes is the answer. Luckily, this is just the start of the annual budget process. I will work hard in the coming months to advocate for a plan that will set Pennsylvania on the path to grow.”
The governor’s proposal also says Pennsylvania’s real gross state product (GSP) is expected to grow at an average annual rate of 1.5 percent through 2029. In the same period, personal income is expected to rise by 4.4 percent annually.
Updated to include quotes from Costa and Hughes
Will tonight's U.S. Senate debate affect your decision?
Total Voters: 27