Today, Governor Josh Shapiro delivered his 2025-26 budget address to the General Assembly. The total spend is $51,474,431,000, which is a $3,570,060,000 (7.5%) increase from last year’s budget. The budget focuses on a continued strategy of making key investments to solve problems and move Pennsylvania forward.
The budget includes numerous proposed revenue and tax modifications, along with an increase in the minimum wage to $15/hour for nontipped workers and $9/hour for tipped workers.
- Legalization of adult use cannabis – $536.5 million in revenue
- Legalization of “games of skill” – $367.9 million in revenue
- Acceleration of the Corporate net income (CNIT) rate reduction and combined reporting – $264 million in revenue
- Eliminating the Bank & Trust Company Shares Tax, Mutual Thrift Institution Tax, and Private Bank Tax and subjecting these companies to the CNIT – $97.1 million in revenue
Investments in education are a major part of the Governor’s spending plan. The Governor is proposing to eliminate the $100 million cyber charter transition line item and replacing it with a new cyber charter reform proposal. The proposal recommends establishing a statewide base cyber charter tuition rate of $8,000 per student per year. This would save school districts an estimated $378 million annually. Notable funding initiatives can be found below.
Basic Education
- $526 million (64%) increase for the Ready to Learn Block grant.
- $75 million (.9%) increase for basic education.
- $40 million (2.7%) increase for special education.
- $25 million (25%) increase for the Public School Facility Improvement Grant program.
- $17 million (5.4%) increase for Pre-K Counts.
- $14.6 million (3.5%) increase for early invention.
- $10.8 million (10.9%) increase for school food services.
- $5.5 million (3.8%) increase for career and technical education.
Higher Education
- $60 million to Penn State University, Temple University, and the University of Pittsburgh through a performance-based funding formula that is to be established based upon recommendations of the Performance Based Funding Council.
- $40.3 million (6.5%) increase for the State System of Higher Education (PASSHE).
- $20 million (100%) increase for the Student Teacher Stipend program.
- $13 million (4.7%) increase for community colleges.
- $6.4 million (39.4%) increase for adult and family literacy.
- $2.5 million (49.6%) increase for teacher professional development.
In the health and human services space, the following are highlights of the proposed budget:
- $55 million to support workforce recruitment and retention grants for licensed childcare centers.
- $20 million for a new hospital initiative to ensure patient safety and hospital access.
- $15 million (180%) increase for the Primary Care Loan Repayment program.
- $10 million to provide a rate increase for early intervention providers in birth to age three programming.
- $10 million for a new initiative to maintain access and services for patients in rural hospitals (DHS Fee-For-Service appropriation).
- $10 million for a new initiative to more broadly address access and services in hospitals across Pennsylvania (DHS Fee-For-Service appropriation).
- $4 million to increase an All-Payer Claims Database to provide greater transparency around health care costs by collecting medical claims, pharmacy claims, dental claims, and eligibility and provider information from public and private payers.
- Rate adjustments for childcare services due to the proposal to increase the minimum wage to $15 per hour.
Another key component of the budget is public transit. Governor Shapiro proposed transferring 9.43% (1.75% increase) of total sales and use tax revenues collected to the Public Transportation Trust Fund. This would provide $292.5 million in additional funding in FY 2025-2026, growing to more than $330 million in FY 2029-2030.
Furthermore, funding for crime and safety initiatives include:
- $116.8 million increase for state correctional institutions.
- $30 million transfer from the Property Tax Relief Fund for competitive grants to fire companies for recruitment, retention, capital, and general operating needs.
- $20 million (35%) increase for the Violence Intervention and Prevention Program.
Last, but certainly not least, the following economic development proposals were offered:
- Establishing the AdvancePA tax credit to provide more flexibility for securing deals and incentivizing high-paying job creation.
- Making changes to the Pennsylvania Economic Development for a Growing Economy (PA EDGE) tax credit, including converting the Local Resource Manufacturing Tax Credit Program to a Reliable Energy Investment Tax Credit, focusing on bringing new, reliable energy sources onto the grid.
- $50 million for a newly established PA Innovation program to incentivize development in the life sciences industry.
- $30 million initiative to spur life sciences job growth and innovation, through coordination among research universities to assist businesses in bringing cutting edge technology to market and fulfilling critical testing needs.
- $20 million to support large-scale innovation, match federal awards to mitigate risks for start-ups, and leverage Pennsylvania’s best-in-class research and development assets.
- $50 million transfer from the Motor License Fund to the General Fund to support road and bridge projects.
- $46.5 million transfer from the Medical Marijuana Program Fund to the Tourism Promotion Fund to assist with costs surrounding 2026 tourism events.

























