Today, Governor Josh Shapiro presented his 2026-2027 Executive Budget to a Joint Session of the Pennsylvania Legislature. The Governor’s $53.3 billion proposed budget is a $2.7 billion (5.38%) increase from last year’s budget. The Governor proposes to generate additional revenue from taxes on skill games and the legalization of adult-use cannabis.
Below is a summary of policy and spending proposals included in the proposed budget.
Education
- Reallocating the caps within the Education Improvement Tax Credit (EITC) program to provide more tax credits to Education Improvement Organizations, while keeping the overall program cap the same.
- $565 million increase in adequacy and tax equity supplements for public schools.
- $75 million in savings due to further alignment in cyber charter school tuition calculations.
- $50 million increase in basic education funding.
- $50 million increase in special education funding.
- $30 million in performance-based funding for state-related universities.
- $10 million increase for STEM and computer science learning programs and professional development opportunities.
- $7.5 million increase for Pre-K Counts.
- $5 million increase for student teacher stipends.
- $2.5 million increase for adult and family literacy.
- $2 million increase for Head Start.
Energy
- Establishing the Governor’s Responsible Infrastructure Development (GRID) standards for data centers, that if companies adhere to, they will unlock benefits including speed and certainty in permitting and available tax credits.
- Developers must commit to bringing their own power generation — or paying entirely for the new generation they’ll need and not saddling homeowners and businesses with added costs because of their development.
- Developers must commit to strict transparency standards and direct community engagement.
- Projects need to hire and train local workers.
- Developers must commit to the highest standards of environmental protection, especially water conservation.
- Adopting the Governor’s Lighting Plan, including a renewal of Chapter 14 consumer protections.
- Creation of the Pennsylvania Program for Critical Infrastructure Investment program to fund large projects including: bringing more energy generation onto the grid; building, preserving, or remediating housing; and upgrading school or municipal facilities.
- Changing the Pennsylvania Economic Development for a Growing Economic (PA EDGE) initiative to ensure businesses can actually take advantage of the credit.
- Calling on the Public Utility Commission (PUC) to scrutinize utility spending and for the General Assembly to give the PUC a set of benchmarks to follow when determining how much utilities can make.
- Appointing a Special Counsel for Energy Affordability tasked with closely examining utility rate requests and taking legal action to stop utility companies from increasing rates.
- Coordination with electric distribution companies on consumer protections and pricing.
- $20 million transfer from the General Fund for the cleanup and restoration of abandoned hazardous waste sites.
- $19 million transfer from the General Fund for abandoned and orphan oil and gas well plugging.
Economy
- Increases the minimum wage to $15 per hour starting on January 1, 2027.
- Continues the 0.5% per year reduction in the corporate net income tax, until the rate reaches 4.99% in 2031.
- Eliminates the “Delaware Loophole”, which allows large businesses that have subsidiaries and related companies in other states to shift their Pennsylvania-based income to out-of-state subsidiaries.
- Over $300 million increase for the Public Transportation Trust Fund via a transfer of an additional 1.75% of Sales and Use tax revenues.
- $100 million through the sale of Insurance Premium Tax Credits for Innovate in PA 2.0 Program, which provides funding for innovation in areas such as life sciences, robotics and technology, energy, manufacturing, and agriculture.
- $10 million for the newly created AdvancePA tax credit, which would provide more flexibility in securing important deals and incentivizing high-paying job creation.
- $10 million increase for the PA First program.
- $9 million increase for the Agriculture Innovation program.
Health & Human Services
- Enacting a Pennsylvania False Claims Act to provide additional safeguards to protect against and to prosecute waste, fraud, and abuse in the Medicaid program.
- Enacting changes to the Older Adult Protective Services Act, including addressing financial exploitation of senior citizens.
- Streamlining a pathway for behavioral health clinicians to join insurance networks.
- Ensuring that direct payments for medication count toward annual out-of-pocket maximum for their health insurance.
- Ensuring individuals can easily access any behavioral health provider who is willing to serve their needs, even those who are out of network.
- Reduces the number of unnecessary licenses within the Department of State, changes certain underutilized licenses to certifications, and conducting a holistic review of all licenses.
- $10 million to build capacity for 988 crisis hotline operations.
- $5 million to maintain mental health crisis stabilization centers.
- $3.2 million for Community Hospital Integration Projects Program (CHIPP) discharges to reduce state hospital stays.
- $3 million for Aging our Way, PA, focusing on PA Link, which is designed to streamline access to long-term services and supports.
- $2 million increase for the Area Agencies on Aging’s Comprehensive Agency Performance Evaluation (CAPE) tool.
- $658,000 increase for ChildLine call-taker staffing and training.
Workforce
- $18 million increase in apprenticeships, career and technical education, and vo-tech programs.
- $12.5 million increase for the Workforce and Economic Development Network of Pennsylvania (WEDnetPA) program.
- $10 million increase for child care recruitment and retention grants.
- $3.5 million increase for the Schools-to-Work program.
- $2.5 million increase for teacher professional development.
- $2 million to create the Career Connect program, which would build internships at companies.
Artificial intelligence (AI)
- Directing agencies to develop clear, cross-agency guidance spanning public health, education, aging, disability services, licensing, and financial regulation to set guardrails, reinforce human judgment, and expand digital and AI literacy for students, parents, caregivers, and professionals.
- Directing the Department of State, through its bureaus of prosecution and enforcement, to proactively ensure that licensure laws keep pace with AI in order to protect the health and safety of Pennsylvanians.
Housing
- Establishing a statewide cap on rental application fees.
- Affirming a tenant’s right to terminate a lease due to domestic violence.
- Sealing eviction records for people who were not actually evicted.
- Enacting fair chance housing reform by limiting when and how landlords may consider criminal history and prevent denials based solely on old or non-violent criminal convictions.
- Limiting annual lot rent increases for manufactured home communities.
- Authorizing transfer-on-death deeds for primary residences.
- Appointing a Deputy Secretary for Housing at the Department of Community and Economic Development.
- Modernizing the Municipalities Planning Code and incentivize county and regional planning to address the diverse housing needs.
Miscellaneous
- $100 million transfer from the Budget Stabilization Reserve Fund to a new Federal Response Fund that would be used to mitigate actions, or inactions, by the federal government that cause disruptions to critical services.
- $60 million increase to replace the Commonwealth’s Enterprise Resources Planning (ERP) system.
- $30 million increase in competitive grants to support recruitment, retention, and capital needs for volunteer and professional fire companies.
- $10 million increase for enhanced enterprise-wide cybersecurity updates.
- $3.7 million increase to CODE PA for the creation of a permit tracker.

























