Proposed Budget Highlights
The governor’s budget for fiscal 2026 builds on previous progress while continuing to address problems facing state residents. The budget focuses on priorities including education; workforce development; economic development; reducing health care, housing, and energy costs; and public safety. The plan makes historical investments to make the state more competitive while also maintaining fiscal responsibility. Highlights of the budget include:
Public Education
- Increases basic education funding and provides additional dollars through the bipartisan adequacy formula to schools that need them most
- Increases special education funding
- Sets a statewide base cyber tuition rate of $8,000 for online education
- Increases Career and Technical Education (CTE) funding
- Doubles funding for student teacher stipends to address the state’s teacher shortage
- Increases funds for school repairs
Workforce Development and Closing Workforce Gaps
- Creates a dedicated Workforce and Economic Development Network appropriation to train additional workers
- Creates the CareerConnect program to build internships at companies in the state
- Invests in adult literacy centers to reduce waitlists
- Additional support for the Office of Vocational Rehabilitation to assist people with disabilities in finding employment
- Invests in recruitment or retention bonuses for childcare workers in the state
- Increases birth to age 3 Early Intervention (EI) provider rates
- Additional funds for the Pre-K Counts program to raise preschool teacher wages
- Invests funding to increase direct care worker wages and benefits
- Directs additional funds to Area Agencies on Aging (AAAs) as well as to an initiative to improve oversight and accountability of AAAs
- Takes steps to close workforce shortages in rural healthcare and behavioral health
- Calls for raising the minimum wage to $15 per hour
Economic Development
- Invests in attracting new businesses in the life sciences sector
- Reorganizes the Department of Community & Economic Development (DCED) to consolidate agency resources to form the BusinessPA Team, which will focus on promoting business success, expansion and attraction
- Targeted investments in the agricultural industry as well as additional funding for the Pennsylvania Agricultural Surplus System and the State Food Purchase Program
- Increases the dedicated transfer share of sales and use taxes to the Public Transportation Trust Fund by an additional 1.75 percent
- Continues to reduce the reliance of the State Police on Motor License Fund revenues to free up more funding for transportation projects and to match federal grant funds
- Invests in state parks, including a new park at Laurel Caverns
Health Care
- Invests in grants for research on neurodegenerative diseases
- Additional state funds and matching funds for federal grants to support rural hospitals
- Calls for legislative action to curtail the involvement of private equity in health care
- Directs health department to take steps to better treat postpartum depression
- Calls for legislation to require insurance companies to cover mental health services provided in schools
Affordability
- Increases transparency in health care pricing by investing in an All-Payer Claims Database
- Multifaceted energy plan to create jobs and lower costs for consumers
- Invests in first-time homebuyer assistance to cover closing costs
- Creates a new statewide housing repair fund to help homeowners
Public Safety
- Takes steps to support firefighters including with a new competitive grant program
- Invests in four additional cadet classes for the State Police
- Increases investments in Violence Intervention and Prevention program and the Building Opportunity through out of School Time (BOOST) Grant Program
Tax Cuts and Reforms
- Eliminates duplicative tax credit programs and replaces them with a new AdvancePA tax credit program aimed at incentivizing high-paying job creation
- Expedites Corporate Net Income Tax (CNIT) cuts by two years
- Closes the “Delaware Loophole” that allows large corporations to avoid paying taxes by shifting income to out-of-state subsidiaries
Other
- Charges the Gaming Control Board to regulate skill terminals, with revenues to be taxed at a rate of 52 percent, which will generate $8 billion in new revenue over five years
- Proposes the legalization of adult use cannabis, which is estimated to generate $1.3 billion over the first five years