Governor Shapiro’s budget proposal is a commonsense plan that builds on two years of progress by solving more problems and making Pennsylvania more competitive.

The Governor’s budget proposal places a special emphasis on workforce development; cuts costs for health care, housing, and energy; invests in economic development; and continues bipartisan efforts to support Pennsylvania students.

Governor Shapiro’s commonsense proposal maintains a balanced budget and cuts taxes — while saving taxpayers millions of dollars by eliminating red tape and duplicative government programs.

Harrisburg, PA?– On Feb 4th, Governor Josh Shapiro presented his 2025-26 budget proposal to the General Assembly and the people of Pennsylvania — a commonsense plan that builds on two years of progress, continues to solve problems, and paves the way for a stronger, more competitive Pennsylvania. The Governor’s budget proposal places a special emphasis on workforce development; reduces health care, housing, and energy costs; invests in economic development; and continues bipartisan efforts to support Pennsylvania students — all while maintaining fiscal responsibility.

This budget will build on the foundation the Shapiro Administration has constructed over the past two years and move Pennsylvania forward as Governor Shapiro continues working across the aisle to get stuff done and ensure people across the Commonwealth have the freedom to chart their own course and the opportunity to succeed. 

“Pennsylvania is on the rise, and this budget is a clear roadmap for tackling our challenges and building on the bipartisan foundation we’ve created over the last two years,” said Governor Shapiro. “My budget proposal is focused on solving problems for Pennsylvanians, expanding our workforce, cutting costs, investing in public safety and economic development – and so much more – to keep creating more opportunity for all Pennsylvanians. This budget strikes a balance by making historic investments while maintaining fiscal responsibility, continuing to cut taxes, and ensuring our Commonwealth’s surplus remains strong while we keep moving Pennsylvania forward. By working together with Democrats and Republicans in the General Assembly, we will continue to tackle the challenges we face and drive growth for a stronger, more prosperous Pennsylvania.”

Since taking office, Governor Shapiro has delivered real results on the issues that matter most to Pennsylvanians: lowering taxes, improving public education, supporting law enforcement, creating economic opportunity, and protecting the rights and freedoms of all Pennsylvanians. His leadership has driven significant progress over the past two years — from cutting costs for seniors, families, and businesses, to advancing infrastructure and economic development projects — and the Governor has been focused on establishing Pennsylvania as one of the best places in the nation to live, work, and raise a family. 

Governor Shapiro and his Administration know the work is far from complete. His 2025-26 budget proposal secures the Commonwealth’s future with commonsense investments that will grow our economy, make the Commonwealth more competitive, and create even more opportunity for Pennsylvanians.

Pennsylvania is on the rise  and with this budget, we will continue to move forward towards more growth and more prosperity, together. 

"Over the past year, I've been honored to meet with Pennsylvanians who are getting stuff done in their communities — people who are working to make their neighborhoods safer, teachers who are educating our youngest learners, advocates that are fighting for victims' voices to be heard," said Lieutenant Governor Austin Davis. "This budget shows we have their back, by investing more in afterschool programs that help keep kids safe and expand their horizons, more in community-based organizations that are addressing gun violence, more for early childhood education and childcare and more to support victims of crime."

Watch the Governor’s full budget address to a?joint?session of the House and Senate here.? See here for the Governor’s full remarks as prepared for delivery.

Read more about the Governor’s 2025-26 budget proposal below, and you can read the full budget in brief here.

Continuing Investments in Public Education to Give Every Pennsylvanian the Freedom to Chart their Own Course and the Opportunity to Succeed

In his first two budgets, Governor Shapiro made historic investments in our public schools, students, and teachers, including delivering the largest increase in K-12 education funding in Pennsylvania history.

This budget builds on that foundation by proposing new funding for K-12 public education, with a focus on driving more dollars to the schools that need them most. It also continues our progress to build strong and safe school communities, support our teachers, and provide high-quality, affordable, and accessible childcare and early learning opportunities for families.

Increasing Historic Investments in Basic Education Funding and Special Education

• Building on the progress made in the Governor’s last two budgets, the 2025-26 budget proposes an additional $75 million increase in basic education funding.

• On top of that, this budget proposes an additional $526 million through the bipartisan adequacy formula, driving more dollars to the schools that need them most.

• It also increases special education funding by $40 million, bringing the total to over $1.5 billion to ensure school districts have the resources needed to provide high-quality special education services to students with disabilities and special needs.?

• Cyber Charter Reform: This budget sets a statewide base cyber tuition rate of $8,000 per student per year, ensuring costs align with the actual expenses of providing an online education. This reform is estimated to save school districts $378 million annually.

Expanding our Workforce By Increasing Funding for Vo-Tech and Student Teacher Stipends

• This budget creates more opportunity for our students and builds on our progress to bring vo-tech back into the classroom with a $5.5 million increase for Career and Technical Education (CTE). 

• This budget aims to address Pennsylvania’s teacher shortage and strengthen the educator pipeline by doubling funding for student teacher stipends, increasing the amount available for stipends by $20 million this year for a total of $40 million to support aspiring educators. 

Creating Safer Schools and Supporting Mental Health

• Our students deserve to learn in safe, healthy environments. That’s why this budget increases funding for school repairs by $25 million for a total of $125 million per year, building on the $275 million already invested in hundreds of school repair projects all across the Commonwealth.

• Last year’s budget invested $120 million to improve student safety and mental health — funding that went out across the Commonwealth through PCCD to help meet the needs of our kids and ensure they feel safe and supported at school. This budget continues to deliver $111 million for student mental health and school safety grants, ensuring our students continue to have the support they need to stay safe and healthy.

• This budget also builds on last year’s progress to put period products in schools for the first time, investing $3 million to continue to provide menstrual hygiene products at no cost to students in schools.  

Continuing Universal Free Breakfast

• This budget ensures that 1.7 million students across Pennsylvania will continue to receive free breakfast at school, regardless of their income. Last school year, more than 90 million breakfast meals were served in schools — that’s nearly 10 million more meals than were served the previous school year. 

Expanding Pennsylvania’s Workforce and Closing Critical Workforce Gaps

Workforce shortages are one of the biggest challenges facing Pennsylvania. Governor Shapiro has been focused on expanding our workforce, from his very first day in office when he signed an executive order to make 92 percent of state government jobs open to Pennsylvanians without a college degree. Since then, nearly 60 percent of all new hires in state government don’t have a college degree. 

This budget places a special emphasis on workforce development and investing in the future of our workforce. We need to ensure we have enough trained workers in the industries that will fuel our growth, and we need to address growing workforce shortages across several critical sectors, including childcare, direct care, and health care. 

Investing in Apprenticeships and Respecting all Paths to Success

There are many paths to success — and here in Pennsylvania, we’ve got to respect and invest in all of them. That’s what the Governor has done over the past two years, increasing funding for vo-tech, career and technical education, and apprenticeships by nearly $65 million. Today, our Commonwealth invests 50 percent more in workforce development than the day Governor Shapiro took office. As a result, the Commonwealth has created more than 110 new pre-apprenticeships and registered apprenticeships in just two years. 

• The 2025-26 budget creates a dedicated $12.5 million Workforce and Economic Development Network appropriation, leveraging $10 million in existing funds and $2.5 million in new state funds to train additional workers. 

• This budget also includes $2 million for the creation of the Career Connect program, a statewide program to build internships at Pennsylvania companies. This will increase the availability of Pennsylvania internships and assist employers with talent recruitment and development efforts.   

Bridging the Gaps in Adult Literacy and Helping More Pennsylvanians Get Their GED

Today there are 650,000 Pennsylvania adults who do not have a high school degree — that’s hundreds of thousands of Pennsylvanians with untapped potential. Many of these individuals want to advance their careers, but need help developing the reading, writing, and math skills most jobs require. 

Pennsylvania’s 54 adult literacy centers provide the training and education folks need to get a job, keep a job, and get a better job. However, more than 7,500 people are stuck on their waitlists because they don’t have enough funding. These classes are the bridge to more people getting a GED. That’s why this budget invests $6 million in these critical adult literacy centers — to create real opportunity for Pennsylvanians.

Lifting Up and Employing Pennsylvanians with Special Needs and Disabilities

There are so many Pennsylvanians who want to be part of our workforce — but who are too often forgotten and left behind. These individuals might have physical or intellectual disabilities, but they are making incredibly valuable contributions in our communities every single day. 

The Department of Labor & Industry (L&I) has a dedicated office that helps those with disabilities enter and thrive in the workforce, known as the Office of Vocational Rehabilitation (OVR).

OVR gives workers the skills and tools they need to be employed — and then fosters connections between the 50,000 Pennsylvanians who receive help from OVR and the businesses looking for trained workers, including places like Sheetz and Wawa.

This budget proposes an additional $5 million to support OVR in assisting people with disabilities in finding employment through personalized services, vocational guidance, goal setting, job placement, and counseling.  

Making Childcare More Affordable by Filling Worker Shortages

Pennsylvania has 3,000 unfilled jobs in childcare. If we filled those jobs, 25,000 more children in Pennsylvania could have access to childcare and parents could have the peace of mind that their kids are well taken care of so they can go to work. 

The reason why these jobs aren’t filled is because folks aren’t being offered a competitive wage. That’s why this budget invests:

• $55 million to give childcare workers in Pennsylvania at least $1,000 in recruitment or retention bonuses. 

• An additional $10 million to increase Early Intervention (EI) provider rates, to ensure every Pennsylvania child has the support and resources needed to succeed — regardless of family income.

• An additional $15 million for the Pre-K Counts program to raise wages for pre-K educators and stabilize the early educator workforce. 

Supporting the People Who Care for Our Most Vulnerable Pennsylvanians

Our direct support professionals are also facing a worker shortage due to low wages. After years of shortchanging the intellectual disability and autism (ID/A) community, Pennsylvania made a historic commitment to meet their needs in last year’s budget. Thanks to those investments, for the first time ever, we have reduced the emergency waiting list by 20 percent since last July, and more than 40,000 Pennsylvanians with intellectual disabilities or autism are getting the services they need.

This budget also invests $21 million to increase direct care worker wages for those who provide services to adults with physical disabilities and seniors in the participant-directed model through Community HealthChoices. The investment includes a wage increase, paid time off, and increases access to affordable insurance for approximately 8,500 workers. 

Helping to Meet Our Seniors’ Needs by Investing in Area Agencies on Aging and the Direct Care Workforce

As part of Pennsylvania’s first ever 10-year master plan for older adults — Aging Our Way, PA — the Department of Aging created a caregiver toolkit to give those caring for our seniors more help to do these difficult jobs. There are 3.4 million Pennsylvanians over the age of 60, and the best way to meet their needs is to work closely with our community partners — and that includes our AAAs, which provide community centers that connect older adults to critical resources, and serve on the front lines in protecting older adults from abuse and neglect. 

Pennsylvania’s AAA Network has been underfunded for too long. That’s why this year’s budget proposes a significant new investment of $20 million through the PENNCARE appropriation to enable our AAAs to better meet the needs of older adults. 

We must also continue to update and invest in older adult protective services to make sure no one takes advantage of our most vulnerable Pennsylvanians. This proposed budget includes $2 million to fund an initiative to improve oversight and accountability of the AAAs, focused on improving and streamlining the monitoring process and ultimately the accountability of AAAs by the Department of Aging.

Addressing Rural Health Care Worker Shortages

Pennsylvania is facing shortages of health care professionals — especially in rural communities. In urban counties, there is one primary care physician for every 222 residents. In rural counties, there is one primary care physician for every 522 residents. That means that rural Pennsylvanians — who already have to travel further distances to get to their doctor — also have less access to health care. 

To ensure every Pennsylvanian, no matter their zip code, has access to high-quality health care professionals, this budget takes action to build a more competitive health care workforce: 

• Building on previous budget proposals to support the demand for reliable health care services in rural counties and throughout the state, this budget includes $5 million to support workforce initiatives to educate, train, and recruit nursing professionals.

• This proposal increases base funding by an additional $20 million to counties to provide critical behavioral health services and address deepening workforce shortages. This marks year three of the Shapiro Administration’s three-year commitment to investing $60 million more into the county behavioral health system. 

• To further boost employment in the behavioral health care sector, this budget invests $10 million to expand the Primary Care Loan Repayment Program at the Department of Health (DOH), broadening the program’s geographic eligibility requirements and supporting behavioral health care workers in all regions of Pennsylvania. 

• This budget also takes commonsense steps to ease these shortages that don’t come with a price tag — including giving full practice authority to highly-educated, highly qualified nurse practitioners who work under a licensed physician for at least three years. This already passed the State Senate last year on a bipartisan basis. The Governor has called on the General Assembly to pass it again, send it to the House, and get the bill to his desk.  

Increasing Pennsylvania’s Minimum Wage

Pennsylvania must take action to raise the minimum wage and compete with neighboring states — including Maryland, Delaware, New York, and New Jersey who are all over $15/hr. Our current minimum wage is too low — and it’s hurting workers. This proposed budget calls to raise the minimum wage to $15 per hour, which will generate economic activity, increase the purchasing power of Pennsylvania residents, and add roughly $100 million annually in increased revenue to the Commonwealth once fully implemented.

Solving Problems for Pennsylvanians

Regulating Skill Games

It’s estimated that there are up to 70,000 skill game terminals in use across Pennsylvania, but they are unregulated — which means no quality control for the customers using them. On top of that, those unregulated skill games are punishing our seniors by undermining the Lottery and the critical services it funds. That means less money for property tax rent rebates, less money to help seniors afford prescriptions, and less money to deliver meals to seniors who have trouble getting around. Our seniors deserve better.

The Governor’s budget proposal will charge the Gaming Control Board — which already regulates other video gaming terminals — with regulating skill games, just like any other video gaming terminal:

• The proposal will allow 30,000 total combined Video Gaming Terminals and skill game machines in establishments in 2025-26, increasing incrementally to 40,000 machines by 2029-30.

• Each establishment will be permitted to have a maximum of 5 machines.

• Gross terminal revenues will be taxed at a rate of 52 percent, with 47 percent going to the General Fund to strengthen our Commonwealth and 5 percent to the Lottery Fund to fill the funding gap for older adults that skill games caused in the first place.

• This proposal is projected to generate $8 billion in new revenue for the Commonwealth over five years.

Legalizing Marijuana

This budget recognizes that the time has come for Pennsylvania to legalize adult use cannabis. Almost all of Pennsylvania’s neighbors have legalized adult use cannabis, including New York, New Jersey, Delaware, Maryland, and Ohio. Pennsylvania is currently at a competitive disadvantage, losing out on critical revenue and new businesses to our neighbors. Executives from neighboring states with cannabis stores on the border have reported that up to 60 percent of their customers are from Pennsylvania. 

This budget proposes the legalization of adult use cannabis effective July 1, 2025, with sales within Pennsylvania beginning January 1, 2026, and invests $10 million in restorative justice initiatives from adult use cannabis proceeds, in addition to the immediate expungement of the records of those incarcerated for only a possession related offense attributed to cannabis. The budget also proposes a $25 million investment to help new small and small diverse businesses enter the new marketplace. This industry will yield $250 million annually in additional revenue for the Commonwealth, and will generate $1.3 billion over the first five years as the market gets up and running.

Making Pennsylvania a Leader in Economic Development, Job Creation, and Innovation

Over the last two years, the Shapiro Administration has successfully competed for business, made strategic investments in key sectors of the Commonwealth’s economy, and implemented transformative changes to the permitting, licensing, and certification processes to ensure Pennsylvania moves at the speed of business. As a result, the Commonwealth has attracted over $3 billion in private sector investments and created nearly 5,000 new jobs.   

The 2024-25 enacted budget made significant investments aligned with the overall ten-year economic strategy. This budget goes further to implement the Economic Development Strategy, positioning Pennsylvania as a national leader in innovation, job creation, and economic development.

Attracting New Businesses in the Life Sciences Sector

Pennsylvania’s life sciences sector is positioned for explosive innovation and growth. The University of Pennsylvania, University of Pittsburgh, and Pennsylvania State University all spend over $1 billion annually on groundbreaking research and development — and taken together Pennsylvania’s colleges and universities rank fourth in the nation in life sciences research and development spending. Over 100,000 Pennsylvanians work in this industry — at places like Krystal Biotech in Western Pennsylvania, Spark Therapeutics in Philly, GSK in Lancaster County, and so many more. This budget aims to connect the dots and attract new businesses in the life sciences sector by investing:

• $65 million more in innovation and designating $30 million for life sciences to help our industry leaders share data, commercialize their discoveries, and unleash Pennsylvania’s full potential. This proposed funding will be used to match additional private venture capital investments, positioning Pennsylvania as a national center for innovation while proactively making investments in entrepreneurs who have historically lacked access to venture capital funding.

Promoting Business Success, Expansion, and Attraction in Pennsylvania with BusinessPA

The 2025-26 budget includes a major reorganization within DCED, consolidating agency resources to form the BusinessPA Team. BusinessPA focuses on and strategically promotes business success, expansion, and attraction in Pennsylvania. An effective marketing program is also critical for promoting the Commonwealth and attracting businesses, employers, and economic growth.

In 2024, Site Selection Magazine ranked Pennsylvania’s business climate ahead of New York, making the Commonwealth the top state in the Northeast for regional economic competitiveness. By promoting Pennsylvania as an ideal place to do business, the BusinessPA team will boost the overall perception of Pennsylvania, capitalizing on recent successes to maximize state investments by ensuring businesses are aware of the advantages of doing business in Pennsylvania

To support the new BusinessPA team, this budget:

• Provides an increase of $3 million to the Marketing to Attract Business program, which provides funding for projects that demonstrate the importance of marketing the Commonwealth as the best choice for investment and promoting the attributes and assets of individual regions. 

• Reallocates 38 current positions and nearly $9 million in current funding from several existing appropriations, into a single BusinessPA appropriation to provide a more effective use of existing resources and sharpen the Department’s focus on those programs and services that best serve the Commonwealth’s business community.  

Building on Pennsylvania’s Legacy as a National Leader in Agriculture 

Agriculture isn’t just part of our rich heritage in Pennsylvania — it’s key to our future. There are 50,000 farms across Pennsylvania that contribute $132 billion to our economy and support almost 600,000 jobs. To ignore that isn’t just disrespectful — it doesn’t make sense economically. To continue Pennsylvania’s national legacy as an agriculture leader, the 2025-26 budget proposes:

• An additional $13 million in the Agricultural Innovation Grant Program to help build the future of American agriculture right here in Pennsylvania. In its first open application period, the Agricultural Innovation Grant Program received 159 applications for nearly $70 million worth of innovation projects. 

• Investing $2 million to keep Pennsylvania’s new animal testing laboratory in the western part of the state operational, providing critical testing services for farmers to ensure their livestock remain healthy and viable for continued farming operations.

• An additional $4 million to help connect Pennsylvanians at risk of hunger with healthy, local food through the Pennsylvania Agricultural Surplus System

• A $4 million increase to the State Food Purchase Program to provide state funds for emergency food assistance for low-income Pennsylvanians.

Significant Investments in Mass Transit 

In Governor Shapiro’s first two years, we’ve delivered over $380 million in new funding for our roads and bridges — and with that investment, Pennsylvania repaired more poor condition bridges than any other state in the entire country. On top of that, we repaired 12,000 miles of roads in Pennsylvania — that’s more than any other time in the last decade.  

But many Pennsylvanians also rely on mass transit — and whether you ride a bus, or hop on a trolley, a train, or the subway, every Pennsylvanian deserves a transportation network that gets them to work and home again in time for dinner safely. That’s why the Governor’s budget makes a significant investment in mass transit all across Pennsylvania and continues to deliver more funding for our roads and bridges.

• Currently, 7.68 percent of all Sales and Use Tax receipts are deposited into the Public Transportation Trust Fund. This budget builds on that investment by proposing to increase that transfer by an additional 1.75 percent. This increase in available funding will inject an additional $292.5 million into mass transit across the Commonwealth in 2025-26, growing to more than $330 million in 2029-30.  

• The last two enacted budgets reduced reliance on the Motor License Fund (MLF) to supplement the Pennsylvania State Police. This budget continues to step down the State Police’s reliance on the Motor License Fund by $50 million a year, until reliance is completely removed in 2029-30. As a result, over the next five years, PennDOT will have an additional $750 million for road and bridge projects.   

• This shift provides the Pennsylvania Department of Transportation (PennDOT) additional resources to match federal Infrastructure Investment and Job Act funds, allowing for more road and bridge construction and maintenance projects.

Connecting More Trails and Investing in State Parks

Pennsylvania welcomed nearly 197 million visitors last year as they enjoyed their own Great American Getaway. Last year, the Commonwealth made big investments in tourism — and that investment is already paying off with more interest, more visitors, and more hotel rooms booked. This year’s budget builds on that foundation by connecting more trails and investing more in our state parks.  

This budget expands Lehigh Gorge State Park to include the popular Glen Onoko Falls Trail — and creates Pennsylvania’s first underground state park at the incredible Laurel Caverns.

Cutting Red Tape for Businesses to Grow and Thrive in PA

Streamlining Tax Credits to Create High-Paying Jobs

DCED was one of three agencies to participate in a new pilot project known as the Resource Evaluation and Mission Alignment Project, or REMAP. REMAP is a data-driven initiative designed to evaluate programs for effectiveness and alignment with statutory mandates, strategic goals, and the Department’s mission, ensuring taxpayer dollars are used as effectively as possible. 

As a result of the REMAP program, this budget proposes to eliminate three tax credit programs that are duplicative of other programs and replaces them with one tax credit program aimed specifically at creating jobs within the Commonwealth.

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.  

Speeding Up Tax Cuts for Pennsylvania Businesses and Delivering Commonsense Tax Reform

Pennsylvania used to have the second highest business tax in the nation — and Governor Shapiro knows this was making it too difficult for companies to grow and succeed, and more challenging for us to sell the Commonwealth. This budget sends the message that Pennsylvania is open for business by modernizing and simplifying the tax system while creating opportunities for businesses to grow and thrive. The Governor’s proposal will:

• Expedite Corporate Net Income Tax (CNIT) cuts by two years, reducing the current tax rate each year by 0.75 percent resulting in a 4.99 percent tax rate in tax year 2029.

• Eliminate an antiquated loophole in our tax system that allows some large corporations to skirt paying their taxes in Pennsylvania — often known as the “Delaware Loophole.” As a result, large businesses that have subsidiaries and related companies in other states can have an advantage by shifting their Pennsylvania-based income or intangible assets to out-of-state subsidiaries, often to the neighboring state of Delaware, greatly reducing the Pennsylvania income and tax owed by their companies operating in Pennsylvania. Closing the Delaware Loophole will put all Pennsylvania corporations, large and small, on the same playing field by eliminating intercompany transactions and other tax planning techniques. 

Taken together, this modernization and simplification of Pennsylvania’s tax structure will yield huge cost savings for businesses. Under the Governor’s plan, by 2029-30, Pennsylvania businesses would realize $10.5 billion in total savings as a result of these tax cuts.

Making Health Care Accessible and Affordable to All Pennsylvanians

Funding Groundbreaking Neurodegenerative Disease Research

Pennsylvania is home to some of the top research institutions in the world. Let’s put them to work by funding groundbreaking research into neurodegenerative diseases like Alzheimer’s, ALS, and Parkinson’s — and make Pennsylvania a leader in this fight. 

Last year, the Commonwealth created the first Alzheimer’s Disease Division at the Department of Aging. This budget builds on that progress with a $5 million investment for grants to qualifying institutions doing research on neurodegenerative diseases. 

Addressing Structural Challenges at Rural Hospitals

Rural hospitals in Pennsylvania have been stretched to the breaking point. The Governor convened a rural health care working group back in 2023, working directly with hospital CEOs, health care providers, members of the General Assembly, and more to find a lasting, sustainable solution to this problem. 

Based on those conversations, the Governor’s proposed budget leverages a $10 million investment to draw down an additional $26 million in federal matching funds to provide immediate relief to Pennsylvania hospitals. 

And recognizing the unique challenges facing our rural hospitals, it invests another $10 million in state funds to help meet their needs. 

Getting Private Equity Out of Our Health Care System

In the past year and a half, six hospitals and 11 nursing facilities have closed or filed for bankruptcy in the Commonwealth — and a majority of them were owned by private equity investors. 

Private equity, while legal, is motivated solely by making a profit and making it quickly. The Governor strongly believes that private equity should get out of the hospital business in Pennsylvania and stop stripping money and resources from community hospitals and leaving entire regions without the care and services they need.

As a Commonwealth, it’s time for us to stand up for local hospitals and nursing facilities, and put in place real safeguards against private equity. 

That’s why the Governor is calling on the General Assembly to send a bill to his desk requiring pre-transaction notifications for all sales, mergers, acquisitions, and bankruptcy claims by empowering the Office of the Attorney General to review these intentions carefully, comprehensively, and with the community’s best interest at the forefront. 

The Governor is also calling for an end to harmful leaseback arrangements — where a hospital or nursing home sells their land to a private investor and then rents it back, often at excessively high prices that push them deeper into debt. 

Improving Maternal Health and Helping Moms with Postpartum Depression

Postpartum depression affects one in eight moms across our country. In the 2023-24 budget, Pennsylvania made the first-ever state investment to address maternal mortality — and doubled down on that investment last year. But when it comes to postpartum depression, moms in need aren’t getting the help they deserve.

That’s why the Governor is directing the Department of Health to:

• Work with health care providers across Pennsylvania to implement universal postpartum screenings for moms;

• Train doctors, nurses, and health care professionals on how to more quickly identify postpartum depression;

• Speed up referrals to mental health professionals when a mom is diagnosed; and

• Create a resource hub where families can go to find more information — as well as local support networks — for postpartum depression. 

Continuing to Make Mental Health Reforms

Over the past two years, the Commonwealth has made a commitment to treat mental health just as seriously as physical health, taking aggressive action to deliver mental health parity.  Pennsylvania’s review process for parity now serves as a national model — one that other states are copying. And we’ve invested more than $200 million in mental health services for our students. But there are still reforms that need to be made. 

The Governor is calling on the General Assembly to send a bill to his desk that closes a loophole that allows insurance companies to deny coverage for mental health services provided to students inside the walls of a school, even though those same services would be covered in a mental health professional’s office across the street. 

The Governor is urging the legislature to take action and stop insurance companies from denying payment for mental health services simply because they are provided in a school. 

Cutting Costs for Pennsylvanians

Since day one, Governor Shapiro has worked to cut taxes and reduce costs for Pennsylvanians. In his first two years, the Governor signed into law the largest targeted tax cut for seniors in nearly two decades to help seniors stay in their homes and a historic expansion of the Child and Dependent Care Enhancement Tax Credit in order to make childcare more affordable. This budget builds on those important steps by working to make health care, energy, and housing more affordable for Pennsylvanians.

Increasing Transparency in Health Care Pricing and Cutting Health Care Costs

With most purchases you make, you can shop around and make the right choice for your family based on quality and price – and you should be able to pick your doctor based on quality and price, too. 

Pennsylvanians deserve price transparency in their health care system. That’s why this budget invests $4 million in the Pennsylvania Health Care Cost Containment Council (PHC4) to develop an All-Payer Claims Database. The database will collect medical, pharmacy, and dental claims from private and public insurers and make them publicly available so Pennsylvanians can make informed decisions.

This small investment is a commonsense step to cut health care costs and will allow Pennsylvanians to save hundreds of millions of dollars on their medical bills.

Enshrining the Protections of the Affordable Care Act into Law to Prevent Price Increases

Today in Pennsylvania, 1.2 million Pennsylvanians get their health care through the Affordable Care Act. Pennsylvanians have come to rely on guaranteed coverage for pre-existing conditions, the guarantee that young adults can stay on their parents’ insurance until they turn 26, and the guarantee that lifetime limits won’t price Pennsylvanians out of the health care they need and deserve.

This budget recommends enshrining the protections of the Affordable Care Act into state law. If the Commonwealth fails to do so and the ACA is taken away in Washington, health care costs will dramatically increase for Pennsylvanians. 

Producing More Energy, Lowering Electricity Costs, and Building a More Reliable, Affordable Energy Sector 

Pennsylvania has a long legacy as a national energy leader. Throughout our history, the Commonwealth has been one of the nation’s top energy producers, embracing innovation to create jobs, lower costs, and drive progress. 

Governor Shapiro has proposed an energy plan — known as the “Lightning Plan” — that will create energy jobs, lower costs for consumers, protect Pennsylvania from global instability by building next generation power, and position the Commonwealth to continue to be a national energy leader for decades to come. The Governor’s initiatives would save Pennsylvania energy customers $664 million by 2040, while generating $11.4 billion in investment in clean, reliable energy sources.

The Governor’s plan is laser focused on building more energy projects here in Pennsylvania. These proposals will supercharge energy development in the Commonwealth and help energy projects get built and approved faster than ever before.

• Today, Pennsylvania is one of only 12 states without a state entity to make decisions about the siting of important energy projects. Other states make it easy to put in place plans that protect and create energy jobs, spur innovation, and attract investment. Governor Shapiro is working to power Pennsylvania’s energy sector by proposing the Pennsylvania Reliable Energy Siting and Electric Transition Board (RESET Board). RESET is a much-needed tool to speed up siting and permitting decisions, cut red tape, and ensure that the next generation of all-of-the-above energy projects are built here in Pennsylvania.

• The Pennsylvania Economic Development for a Growing Economy (PA EDGE) Program is a collection of tax credit programs designed to attract new investments from businesses in critical manufacturing sectors, including semiconductors, biomedical, milk processing, and petrochemicals and fertilizers produced from natural gas. Since it was first passed into law in 2022, the EDGE credit has not been used by a single business – leaving billions of dollars in new economic development on the table. The 2025-26 budget proposes several tax credit modifications to ensure businesses can actually take advantage of the credit to create jobs, innovate, and grow our economy, including:

• Converting the Local Resource Manufacturing Tax Credit Program to a Reliable Energy Investment Tax Credit: Utilize up to $100 million per year tax credit per facility for three years, focusing especially on bringing new, reliable energy sources onto the grid. 

• Regional Clean Hydrogen Tax Credit Program: Allow up to seven regionally dispersed qualified taxpayers to claim up to $7 million per year and lowers thresholds to qualify. 

• Sustainable Aviation Fuel – Utilize up to $15 million per year for a taxpayer who makes a $250 million capital investment and creates 400 jobs at a facility to produce sustainable aviation fuel (SAF).

• The Pennsylvania Climate Emissions Reduction Act (PACER) would establish a Pennsylvania-specific cap-and-invest program that allows Pennsylvania to determine its own cap on carbon and invest directly in lowering consumers’ electricity bills. Under PACER, 70 percent of the revenue generated would be directed back to Pennsylvania residents as a rebate on their electric bill. 

• The Pennsylvania Reliable Energy Sustainability Standard (PRESS) would build a more diverse, reliable, and affordable energy sector. Over the last two decades, Pennsylvania’s energy standards have become outdated, impacting Pennsylvania’s ability to remain competitive with other states that have more modern standards to attract new energy investment. The Governor’s updated version of this proposal will update our energy portfolio standards and incentivize companies to innovate and build new forms of energy – including nuclear energy and affordable, renewable sources like battery storage.

• The Governor’s proposed budget will introduce the concept of Community Energy, benefitting communities across Pennsylvania, including agriculture producers and low-income Pennsylvanians, and bolstering the ability of communities to jointly share energy resources to lower their costs. Under this proposal, a group of farmers who would like to invest in methane digesters can come together and get the energy to power their farms from the digester rather than from an electricity company, potentially lowering their energy prices. 

• In addition to these initiatives and reimagining the PA EDGE tax credit programs, Pennsylvania must reform Act 129, the law that provides rebates and incentives to buy new energy efficient appliances and other ways to reduce electricity needs over time — which in turn, leads to lower electricity prices. The Governor’s proposal will update these energy efficiency standards for the first time in nearly two decades. 

With all of these steps, Pennsylvania can continue to be a national energy leader, producing reliable energy, low-cost electricity, and thousands of good-paying jobs for Pennsylvanians.  

Making Housing More Affordable

Housing affordability remains one of the most pressing challenges facing Pennsylvanians today. Rising costs, outdated housing stock, and a lack of affordable options are making it harder for families to stay in their homes and for others to achieve homeownership. Governor Shapiro is committed to cutting costs and creating real, long-term solutions to ensure all Pennsylvanians have access to safe, affordable housing. 

To help to lower housing costs, this budget delivers over $1 billion in property tax relief through the homestead and farmstead exclusion in this budget for the first time ever. This will cut property taxes for the average Pennsylvania homeowner by over $160 this year, representing a 71% increase in the average savings taxpayers receive. 

But we need to do more to make housing more affordable and accessible. There is a severe lack of new development across Pennsylvania. To meet the need for housing this year alone, we need more than 100,000 new homes and apartments.

Last September, the Governor signed an Executive Order to create Pennsylvania’s first ever Housing Action Plan. Since then, the Shapiro Administration has collected feedback from thousands of Pennsylvanians and worked directly with developers, nonprofits, local governments, and labor leaders to create a comprehensive, coordinated, statewide housing solution. The final housing plan will be coming in the next few months, but the Administration has identified six key steps we can take immediately to begin to solve this problem that are included in the Governor’s budget proposal:

• Invest $10 million to help first-time home buyers cover closing costs — putting a roof over their head and giving them a real chance to build generational wealth here in the Commonwealth. 

• Staff up the State Planning Board, so it can help local communities fix their permitting, zoning, and code enforcement issues and build more homes.

• Create an Interagency Council on Homelessness to improve support and coordination for the unhoused in Pennsylvania.  

• Continue the progress we made last year by increasing Pennsylvania’s largest and most flexible affordable housing tool — the PA Housing Affordability and Rehabilitation Enhancement Fund (PHARE) — by an additional $10 million to reach $110 million by the end of 2028. In the last two years, these tax credits have been used to begin construction on 2,000 new homes and apartments and repair another 3,200.

• Seal eviction records for people who were not actually evicted. Right now in Pennsylvania, as soon as an eviction is filed, it becomes a permanent mark on someone’s background, even if that case eventually gets ruled in the tenant’s favor. Eviction records can prevent vulnerable Pennsylvanians from securing housing or employment — this will help increase housing security and improve access to affordable housing and employment opportunities.

• Invest $50 million to create a new statewide housing repair fund to help homeowners struggling to make needed repairs to their aging homes. 

Supporting Law Enforcement and Making Our Communities Safer

Governor Shapiro believes Pennsylvanians deserve to be safe and feel safe in their communities — that means living in a community free from the violence that too many experience and having a criminal justice system that enforces the laws in a fair and consistent manner.  

This budget continues the Governor’s work to create safer communities and includes new initiatives that will make Pennsylvania’s communities safer and ensure our state police, first responders, and our firefighters have the tools and personnel they need to succeed.

Supporting our First Responders and Preventing Disasters Before They Happen

As fires continue to be a major concern across the country, Pennsylvania’s professional and volunteer firefighters and first responders bravely put themselves in harm’s way to protect their neighbors and serve an essential role in ensuring the safety of their communities. Firefighters are being stretched thin right now, responding to more and more calls each year as the number of firefighters across the Commonwealth shrinks.  

The Governor’s budget proposal takes three concrete steps to support our firefighters:

• Creates a new, competitive funding stream of $30 million in grants for our fire companies, allowing fire companies to purchase equipment, recruit and retain firefighters, and meet their unique needs. 

• Incentivizes cooperation and creates a pilot program to help provide municipal fire companies with the resources they need to work together.

• Covers cancer screenings for firefighters every year. Last year, we reformed our Workers’ Compensation Act to ensure firefighters, first responders, and law enforcement with a post-traumatic stress injury get the coverage they deserve. Firefighters expose themselves to toxic chemicals while on the job – all to keep us safe -- we need to have their backs. 

The Commonwealth has also seen historic flooding over the last two years — with many counties facing emergency situations at the same time. Pennsylvania’s municipalities need tools not just to respond to emergencies, but to prevent them from happening in the first place. Disaster response is always more costly than the prevention — including the toll these emergencies take on impacted Pennsylvanians who may lose loved ones, and their homes, businesses, and livelihoods to events like fires and floods. That’s why this budget proposes taking legislative action to allow for existing funds at the Pennsylvania Emergency Management Agency (PEMA) to be used for mitigation projects, in addition to emergency response.

Ensuring the State Police are Equipped to Protect Our Communities

This budget continues to support PSP’s mission to protect the safety of Pennsylvania communities by investing $14.5 million for four additional cadet classes and calls for the complete elimination of the current statutory cap which limits the number of troopers on the streets. Removing the statutory cap will allow for increased patrol visibility, faster response times, and the ability to maintain a proactive posture in Pennsylvania’s communities. Beginning in 2025-26, this funding will allow for the training of 432 new State Troopers to provide critical policing services to Pennsylvania’s residents.

Reducing Crime and Gun Violence

Our investments in law enforcement are working. Violent crime is down across much of Pennsylvania. Law enforcement is one part of that success, and the other is that we have made meaningful investments in violence prevention efforts — programs that are proven to work.

The Commonwealth has increased funding for community groups, youth groups, and church groups doing this work by 40 percent over the past two years. In fact, over the past two years, the Pennsylvania Commission on Crime and Delinquency (PCCD) has provided more than $600 million in funding for over 3,500 grants across Pennsylvania to address and prevent violence in our communities.

This budget builds on that foundation so we can expand our impact and make our communities safer, including:

• A $10 million increase for the successful Violence Intervention and Prevention program. This program supports a wide range of models focused on reducing community violence and relies on community groups that are most in tune with specific local needs. 

• A $10 million increase in the Building Opportunity through Out of School Time (BOOST) Grant Program, nearly doubling the amount of money available. BOOST was created in the bipartisan 2024-25 budget and provides funding for after-school programs that provide enrichment opportunities for our kids, address the root causes of violence, and make our communities safer. 

Supporting Victims of Violent Crime

PCCD’s Victim’s Compensation Assistance Program (VCAP), Rights and Services Act, and Victims of Juvenile Offenders programs, provide financial assistance to crime victims for expenses like relocation, medical bills, counseling, funeral costs, and lost wages. However, these programs are unable to meet the demand. The 2024-25 budget provided a one-time solution by transferring nonrecurring existing resources to stabilize the programming. Without a stable, long-term state funding source, PCCD’s ability to serve victims effectively is at risk. That’s why this budget:

• Proposes flexibility to the funds currently transferred to PCCD from the Medical Marijuana Program Fund as a temporary fix, which would allow PCCD to utilize current uncommitted funds to support VCAP-related expenses in the budget year.

• Proposes a $2.2 million increase in funding for advocates for services for children who have been abused, neglected, or abandoned. 

Governor Shapiro has been laser focused on getting things done for Pennsylvanians and delivered on many of the promises he made in his first two budgets — and this budget will continue to make critical, commonsense investments and deliver real results for the Commonwealth.

Learn more about Governor Shapiro’s budget here at shapirobudget.pa.gov.