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FY 2025-2026 Budget Update

Nov 12, 2025

After an impasse that lasted nearly five months, the FY 2025-2026 budget is finally complete. The total state General Fund spend is $50.09 billion, which is a $2.27 billion (4.7%) increase over FY 2024-2025. SB 160 includes no new revenue sources and does not include any transfers from the Rainy Day Fund, which currently sits at $7.5 billion.

Highlights of this year’s budget include the following.

Education

  • $565 million increase for adequacy and tax equity payments to school districts.
  • $178 million (14.6%) in estimated savings to school districts from cyber charter funding reform.
  • $125 million for school facilities; at least $25 million of which for Solar for Schools.
  • $105 million (1.3%) increase for basic education funding.
  • $100 million for school safety and mental health grants.
  • $50 million increase for the Educational Improvement Tax Credit (EITC) program.
  • $40 million (2.7%) increase for special education funding.
  • $28.5 million (6.7%) increase for early intervention.

Health and Human Services

  • $747 million (8%) increase for the MA Managed Care program.
  • $154.4 million (6.1%) increase for Intellectual Disabilities – Community Waiver Program.
  • $13.2 million (7.1%) increase for the early intervention program.
  • $10.7 million (3.7%) increase in PENNCARE, which provides funding for the Local Area Agencies on Aging.

Environmental Protection

  • $134.6 million (7%) increase for Environmental Protection Operations of the Department of Environmental Protection (DEP).
  • $45.4 million (7%) increase for DEP Environmental Program Management.
  • $31.9 million (6%) increase for the General Government Operations of DEP

Transportation

  • $43.5 million (18.8%) increase for safety administration and licensing.
  • $41.2 million (3.6%) increase for highway maintenance.
  • $20 million (3.2%) increase for highway safety and improvement.
  • $5 million (12.5% increase for municipal traffic signals.

Economic Development

  • $38 million for Pennsylvania First.
  • $20.4 million for PA Sites debt services.
  • $20 million for Main Street Matters.
  • $20 million for historically disadvantaged businesses.
  • $10.9 million for Partners for Regional Economic Performance.
  • $8.9 million for BusinessPA.
  • $2.5 million for American250PA.

Corresponding “Code bills” that implement the General Appropriations bill passed as well. Summaries of each bill can be found below.

Fiscal Code/HB 416

 

  • Provides $25 million for the newly established Child Care Recruitment and Retention Program.
  • Extends the 9-1-1 surcharge of $1.95 until February of 2029.
  • Decouples Pennsylvania from certain provisions of federal H.R. 1, preventing a loss of over $1.1 billion in FY 2025-2026.
  • Directs $100 million from the Joint Underwriting Association to the Department of Human Services (DHS) for Medical Assistance – Capitation.
  • Establishes the Rural Health Transformation Program to distribute federal funding and implement the state plan.
  • Extends DHS’s authority to enforce rules and regulations regarding staffing ratios in nursing homes until December of 2026.
  • Allows for wholesale auctions of Affordable Housing Tax Credits raise capital.
  • Establishes a Working Pennsylvanian’s Tax Credit; 10% of the federal amount received for the federal earned income tax credit.
  • Stops $416 million from being transferred from the General Fund into the Rainy Day Fund for FY 2024-2025.
  • Transfers $120 million from the Property Tax Relief Fund to the Lottery Fund to fund the Property Tax Rent Rebate Program.
  • Reallocates $6.4 million in American Rescue Plan funds to the Department of Corrections.
  • Transfers $59.2 million from the Enterprise Technology Restricted Account to be used for information technology projects.
  • Provides that federal funds for the Solar for All Program shall be used for projects approved by the Commonwealth Financing Authority (CFA).
  • Allows Solar for Schools projects to be eligible for the CFA School Facilities Program.
  • Provides for $25 million in unspent CFA funds for PlanCon projects.
  • Transfers up to $100 million in special fund interest to the General Fund in FY 2026-2027.
  • Transfers $91 million from the iGaming Slots Hold Harmless Local Share Account to the Lottery Fund.
  • Extends the Local Economic Revitalization Tax abatements for Philadelphia, Pittsburgh, and Allegheny County from 10 to 20 years.
  • Abrogates the regulations pertaining to the Regional Greenhouse Gas Initiative (RGGI).
  • Expands the Streamlining Permits for Economic Expansion and Development Program (SPEED).
  • Provides the Public Utility Commission the ability to investigate methodologies data and assumptions used by utilities when developing load forecasts submitted to PJM.

Public School Code/SB 315

 

  • Reconstitutes the Special Education Funding Commission in 2027.
  • Provides that the length of a school year for a school employee must be a minimum of 180 days of instruction and 900 hours of instruction at the elementary level or 990 hours of instruction at the secondary level.
  • Requires that cash must be an acceptable payment for admission to a school-sponsored activity.
  • Provides for new pathways for an individual to qualify as an intermediate unit executive director or assistant executive director.
  • Provides for changes for instructional certificate grade spans and age levels.
  • Allows educators with inactive certificates to return to the classroom more easily.
  • Prohibits the use of the basic skills assessment for admission into a teacher preparation program or for certification.
  • Provides for career and technical administrative director certification flexibility.
  • Provides for new policies pertaining to truancy and habitual truancy.
  • Codifies guidelines regarding how school entities report expenditures related to special education students.
  • Provides for school safety and security policy changes and distribution formulas for money appropriated for school safety.
  • Increases the maximum numbers that may be enrolled in a Drug and Alcohol Recovery High School.
  • Establishes new requirements regarding evidence-based reading instruction curriculum and professional development.
  • Requires high school students to submit a Free Application for Federal Student Aid (FAFSA) application before graduation.
  • Provides for comprehensive changes to cyber charter school funding and payments.
  • Increases the time that career and technical education schools can accumulate money in equipment and facility capital reserve funds before being expended from 5 years to 10 years.
  • Provides for the calculation and distribution of career and technical equipment grants.
  • Establishes the Nursing Shortage Assistance Program.
  • Provides for the distribution formula for community colleges.
  • Implements a new performance-based funding model for Pennsylvania State University, University of Pittsburgh, and Temple University.
  • Increases the maximum total household income eligibility threshold for the Ready-to-Succeed Scholarship.
  • Allocates $7 million in undistributed funds to assist school districts in financial recovery or financial watch status.
  • Provides for an adequacy supplement and a tax equity supplement within the Ready-to-Learn Block Grant.
  • Delays the opening of PlanCon 2.0 and the maintenance program until July 1, 2026.

Human Services Code/HB 749

  • Requires DHS to issue an annual report regarding the Supplemental Nutrition Assistance Program (SNAP).
  • Requires DHS to prepare a report evaluating the feasibility of transitioning from magnetic stripe access cards to chip-enabled access cards for individuals receiving SNAP benefits.
  • Requires DHS to check death certificates against recipients of Medical Assistance (MA) and benefits from SNAP on a monthly basis and to check wage records on a quarterly basis.
  • Requires DHS to study the feasibility of a brokerage model to provide Nonemergency Medical Transportation Services.
  • Eliminates the temporary suspension of Medicaid, for a period of not more than two years, of incarcerated individuals in a correctional institute.
  • Increases the minimum weekly copayment amount of subsidized child care to be in accordance with state and federal law.
  • Repeals regulatory requirements that restrict MA reimbursement for behavioral health services delivered outside the physical premises of a licensed outpatient clinic.

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