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On Tuesday, February 4, Governor Josh Shapiro presented his third budget proposal to a joint session of the General Assembly. Gov. Shapiro declared that “Pennsylvania is on the rise” as he detailed his 2025-2026 budget proposal. You can watch his address and find additional budget-related materials from his administration here.
The Governor proposed spending $51.5 billion next fiscal year, a 7% increase from last year. The proposed increase allocates $2.9 billion from the state’s General Fund and $1.6 billion from a Rainy Day Fund that currently holds more than $7 billion.
In his budget address, Gov. Shapiro called for investing funding into new and existing programs in areas including education, childcare, economic and workforce development, housing, families and older Pennsylvanians, all without raising taxes. In fact, this budget proposal would continue a planned reduction in the Corporate Net Income Tax already approved by the legislature.
While my analysis of his proposal has only just begun, here are some key aspects from his presentation:
- Includes a $526 million increase in the Ready to Learn Block Grant, in response to last year’s court ruling that declared that our public school funding system is unconstitutional and must be reformed.
- Envisions legalization of adult-use marijuana with estimated tax revenue of almost $537 million for the 2025/26 fiscal year.
- Increases the minimum wage to $15.00 per hour for non-tipped workers and to $9.00 for tipped workers.
- Provides $55 million for recruitment and retention grants to eligible childcare workers.
- Expands the Fire and Emergency Medical Services Grant Program by $30 million for them to use for a variety of vital uses.
- Increases funding for mental and behavioral health services with $20 million driven to counties for their community-based needs. An additional $10 million has been proposed to provide support to the 988 crisis hotline network.
- Invests $5 million for neurodegenerative disease research.
- Provides $1 million for Veterans Small Business Assistance to support veterans establishing and growing their businesses.
- Provides $20 million for the Main Street Matters program to provide resources to revitalize communities.
The Governor’s proposal is just the beginning of a three-way negotiation between both chambers of the General Assembly and the Governor. There will be a lot to review and discuss in the upcoming months as more details emerge. The budget and all related code bills need to be completed by the end of this coming June.
If you missed the Governor’s budget address, you can read his full remarks here. Additionally, if you would like a more in-depth look at the proposal, the House Democratic Appropriations Committee has prepared a breakdown on the Governor’s numbers, where you can find the 2025/2026 Executive Budget At-A-Glance and the more in-depth 2025/2026 Executive Budget Briefing.
Already, the House Appropriations Committee has kicked off three weeks of budget hearings. Most, if not all, of these hearings will be available online and you can find more information about that at PaHouse.com. You can also watch the hearings on PCN or attend them in person if you are visiting Harrisburg (contact my office if you need assistance). The complete hearing schedule is also available for your review by clicking here.
If you need help or have questions about any state matter, please contact my office by emailing repdanmiller@pahouse.net or calling 412-343-3870.
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