Governor Josh Shapiro delivered his 2025-26 budget address, outlining economic initiatives, public safety measures, infrastructure improvements, and education funding. His speech emphasized continued investment in key sectors to strengthen Pennsylvania’s economy and public services. Here are the major takeaways.

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Economic Growth and Job Creation

Pennsylvania has added 170,000 jobs since Shapiro took office, with over $3 billion in private-sector investment. The administration aims to enhance workforce development through apprenticeships and career training programs to sustain economic growth. His budget also includes $136 million in childcare tax credits to support working families.

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Education and School Funding

The budget includes an additional $526 million for public schools through a new funding formula. Key allocations include:

• $11 billion for public education.
• $90 million in additional funding for the Allentown School District.
• 92 million free breakfasts provided to students.
• $10 million in student teacher stipends to address workforce shortages.
• $778 million to expand mental health services in schools.
• $50 million for school infrastructure repairs in over 250 schools statewide.

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Tax Reform and Business Competitiveness

Shapiro proposed accelerating corporate tax reductions and modernizing Pennsylvania’s tax code. The plan includes eliminating outdated bank taxes and closing tax loopholes, with a goal of cutting $10.5 billion in business taxes by 2029. Additionally, the budget proposes a $1.3 billion tax revenue increase from legalized adult-use cannabis over the next five years.

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Infrastructure and Transportation

The state has repaired over 12,000 miles of roads and more bridges than any other state. The budget allocates $380 million in new funding for roads and bridges, focusing on both urban and rural transportation projects to improve connectivity and efficiency across Pennsylvania.

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Public Safety and Law Enforcement

The budget increases support for law enforcement agencies with funding for:

• 800 new state troopers.
• $30 million in grants for fire departments.
• Four new cadet classes for the Pennsylvania State Police.
• $60 million for the Hi-Path Avian Influenza recovery fund to support impacted farmers.

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Healthcare, Workforce, and Social Services

To address workforce shortages, the budget proposes:

• $55 million in childcare worker retention bonuses.
• Higher wages and benefits for home care workers.
• Expanded loan forgiveness programs for healthcare professionals.
• $6 million for adult literacy initiatives to help 650,000 Pennsylvanians without a high school degree.
• $10 million in direct support to struggling rural hospitals.
• $4 million to create a statewide healthcare price transparency database.

The plan also includes healthcare pricing transparency initiatives and hospital protection measures.

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Cannabis Legalization and Gaming Regulation

Shapiro advocates for legalizing adult-use cannabis, estimating $1.3 billion in potential revenue over five years. He also supports regulating and taxing skill games to recover $200 million in lost lottery funding and strengthen state revenues.

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Energy and Environmental Strategy

The “Lightning Plan” focuses on:

• Expanding renewable energy sources.
• Reducing household energy costs.
• Investing in carbon capture technology and energy innovation.

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Housing Affordability and Development

The budget addresses rising housing costs with:

• A $10 million fund for first-time homebuyers.
• Increased PHARE investment, reaching $110 million by 2028.
• A new $50 million statewide housing repair fund.
• $10 million for staffing at the State Planning Board to improve local permitting and zoning processes.
• $1 billion in certified property tax relief for Pennsylvania homeowners.

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Bipartisan Collaboration and Future Priorities

With a Republican-controlled Senate and Democratic-controlled House, Shapiro urged lawmakers to maintain bipartisan cooperation. The administration prioritizes economic growth, infrastructure, and public safety while managing a multi-billion-dollar budget surplus.

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