HARRISBURG, Pa (WHP) — Governor Josh Shapiro is presenting his 2025-26 budget for the Keystone State, highlighting investments in education, economic development and public safety.
Overall, the governor is proposing spending more than $51 billion over the next fiscal year—an approximately 8.5% increase from the year before.
Shapiro claims his plan would cut taxes by $10.5 billion by the year 2029.
“Let’s work together,” said Shapiro before being met with thunderous applause.
The address started just before noon in the Capitol. You can watch the entire speech below, and on the CBS 21 YouTube and Facebook pages.
Notably, the budget proposes two new sources of revenue for the Keystone State: the legalization of adult use cannabis and regulation of skill games. The governor’s office believes legalizing marijuana could bring more than $530 million in revenue to the state.
Shapiro kicked off his address by honoring late Pennsylvania Rep. Matt Gergley and highlighting Pennsylvania’s resilience in the face of tragedy, referencing the Philadelphia plane crash that killed seven people Jan. 31.
“Our thoughts and prayers are with the families of the victims of that terrible plane crash, and we’re praying for a full and speedy recovery for those injured and battling right now,” Shapiro said.
Cannabis & Skill Games
Shapiro said the Pennsylvania Lottery lost around $200 million over the last five years—mostly due to unregulated skill games, he said.
“Every time somebody puts a buck into one of those unregulated machines, it undermines the Lottery and the critical services it funds for our seniors like prescriptions and meals,” Shapiro said during the address.
His budget calls for the Gaming Control Board to regulate and tax the skill games and said that doing so would generate more revenue to give back to older Pennsylvanians and the state’s general fund.
The budget also calls for the regulation of adult-use cannabis in Pennsylvania—which Shapiro said has already been legalized by 24 sates, including all of Pennsylvania’s neighboring states.
Shapiro said he talked with CEOs of companies selling cannabis products in New Jersey, Maryland and New York, and they said 60% of their customers are Pennsylvanians.
“We’re losing out on an industry that, over the first five years, will bring in $1.3 billion in new revenue to our Commonwealth,” Shapiro said.
He called for a bill that legalizes adult-use cannabis and expunges records of people convicted of nonviolent possession of small amounts of marijuana, along with outlining reasonable regulations to protect public safety.
Education
Shapiro highlighted successes Pennsylvania has seen in the last year with education—including funding student-teacher stipends and investing a “record amount of money in public education” for schools that need it most—and said this year’s budget hopes to continue to support those missions.
The governor is proposing spending more than $500 million in adequacy boosts to underfunded districts in Pennsylvania.
“My budget continues the path we set out on last year, by investing an additional $526 million through that adequacy formula,” Shapiro said.
It includes funding for physical upgrades and mental health supports in schools and aims to provide more support for pre-k and early intervention programs.
The budget also allocates money to public universities and community colleges, directing funds into workforce development, Shapiro said.
Economic Development
The budget also hopes to reinforce the state’s economic development strategy when it comes to things like agriculture, life sciences and taxes.
“This budget continues to cut taxes streamlining, simplifying, and modernizing our corporate tax structure to reduce the burden and level the playing field,” Shapiro wrote.
The budget also puts forth $300 million a year for the state’s public transportation agencies, in addition to ensuring childcare facilities are staffed as needed.
“There are many paths to success,” said Shapiro. He added that careers in agriculture and technical schools will benefit from his proposed budget.
Health & Public Safety
Shapiro also highlighted more funding for public safety, including investments in first responders, resources for both paid and unpaid firefighters, funds to recruit more troopers and the expansion of gun violence and prevention programs.
Money is set aside to support hospitals and protect access to Medical Assistance, Shapiro said. It hopes to recruit and retain more healthcare staff while investing in behavioral and mental health services, among other things.
Housing & Childcare
This year’s budget addresses what Shapiro called “one of the biggest challenges I hear about from hardworking Pennsylvanians”: the costs of childcare, housing and energy.
He said the budget accounts for recommendations anticipated from the Housing Action Plan, which would make Pennsylvania more affordable for renters and homebuyers.
It includes funding to help Pennsylvanians restore and stay in their homes, including resources for first-time homebuyers, Shapiro added.
The budget also aims to expand opportunities for children and families by investing in the childcare workforce.
Shapiro said the proposal is paired with a “significant energy plan focused on expanding affordable, reliable and lean power across all Pennsylvania”.
“We’ve made real progress over my first two years as your Governor—and that work is showing real results. We need to continue that progress by working together in support of commonsense Pennsylvania principles,” Shapiro said in a letter to the people of Pennsylvania. “We can do all of this and maintain fiscal stability, planning for the future and retaining $6.4 billion in the Rainy Day Fund by the end of June 2026.”
Governor Josh Shapiro is presenting his 2025-26 budget for the Keystone State, highlighting investments in education, economic development and public safety. Read More
