Gov. Shapiro Proposes $51.4 Billion Spend for 2025/26 State Budget
Pennsylvania’s Governor Josh Shapiro gave his annual budget address today, announcing a plan to spend $51.4 billion dollars.
“Today I can report that Pennsylvania is on the rise,” Shapiro said in his opening remarks.
The address was given on the House floor, with both representatives and senators present. Shapiro spoke for over an hour and a half, working through dozens of topics point by point.
“From education to health care to housing to economic development to job creation. It makes the right investments at the right time,” Sen. Vincent Hughes (D-Philadelphia) said, the Democrat appropriations chair in the Senate.
The budget increased funding in areas like education and workforce development.
Shapiro proposed funding increases and policy solutions to areas like housing and rural healthcare… and continued line items for agriculture spending.
"He really does talk a lot about agriculture, and that's important to our economy, important to our region,” Rep. Clint Owlett said, secretary for the House Republicans. “I appreciate that he left some of those lines in the budget where they typically don't. So that's good.
Past spending increases and policy changes, the Shapiro administration wants to speed up the reduction of the corporate net income tax, as well as reform other taxes as the Commonwealth tries to attract business growth.
While tax cuts reduce revenue, Shapiro says legalizing adult use cannabis and regulating skill games— both proposals included in previous addresses— will help contribute new revenue.
Erie’s Rep. Pat Harkins (D) is chair of the House Gaming committee and will play a key role in negotiations this year.
"These places are running rampant in a lot of these communities, so we have to address that,” Harkins said.
Shapiro’s $51.4 billion proposal spends $4.5 billion more than what the state is projected to collect in revenue next year. Lawmakers would have to use the $10.4 billion in the state’s savings and surplus funds to cover the difference.
There is only $2.9 billion of state surplus money left. These are one time dollars the state collected during the Pandemic. The federal government gave extra money to state governments and also flooded the economy with cash, leading to increased sales and income tax revenue for the states. Shapiro’s proposed budget would drain the surplus fund, then pull $1.6 billion from the state’s rainy day savings fund (a fund that was also built up because of pandemic spending and cash flow).
Republicans say the proposal is irresponsible.
"If they're serious on some of their priorities that are important to them, that we might be able to find common ground on,” Sen Scott Martin said, Republican appropriations chair for the Senate, “For the love of God, work on closing our structural deficit. And we'll work with you on different things."
They also criticized Shapiro's dedication to a carbon cap policy for energy as one thing keeping the Commonwealth's economy from growing more.
"One of the single best things we could do to ignite the economy in Pennsylvania is to unleash our energy industry,” Rep. Jesse Topper said, House Republican Leader. "And the first thing that comes with that is getting us out of the Regional Greenhouse Gas Initiative and ensuring that nothing even takes its place."
This was Shapiro’s 3rd budget address, kicking off the second half of his four year term. With re-election in 2026, and a potential presidential run in 2028, what the Montgomery county native can accomplish in these next two years will set the stage for those campaigns.