Gov. Josh Shapiro unveiled a proposed state budget Tuesday that would sharply increase funding for public schools, day care, mass transit and job training.
Shapiro proposes paying for the higher spending by regulating and taxing an estimated 70,000 skill-game terminals and legalizing recreational marijuana use.
Over five years, taxing skill games would raise an estimated $8 billion, and taxing marijuana would raise another $1.3 billion, according to a budget summary.
Shapiro also again proposed gradually raising the state’s $7.25 an hour minimum wage to $15 an hour, a proposal that Republican legislators have always rejected. And he proposed speeding up the reduction of the state’s corporate net income to 4.99% by 2029, two years faster than now, and eliminating a loophole that allows companies to shift revenues to states with no or lower income taxes. The loophole elimination, first proposed by Gov. Ed Rendell almost two decades ago, has never gained traction among Republicans either.
The state General Assembly must pass, and Shapiro must sign a 2025-2026 budget to go into effect July 1.
The governor, often discussed as a potential Democratic presidential candidate, sought to portray a state thriving under his leadership. About 170,000 more Pennsylvanians have jobs and the state has trained about 12,000 new apprentices for jobs since he became governor in January 2023, he said.
“Today, I can report that Pennsylvania is on the rise,” he said in the prepared text of his budget address. “We’ve attracted over 3 billion in private sector dollars and become the top state in the Northeast for regional economic competitiveness.”
Faced again with a politically divided General Assembly, Shapiro reminded legislators they accomplished business permitting reform, boosts in funding for tourism, economic development and vocational-technical training and pharmacy benefit manager reform.
“Because despite our agreements, we worked together to get stuff done,” he said, using a phrase he often repeats. “We solved problems that languished for decades.”
The last two years, he said, Democrats and Republicans voted for “commonsense budgets that solve real problems.”
“We’ve moved the ball down the field and put points on the board and we should celebrate that,” he said. “But we should be hungry for more.”
With the state required to comply with a Commonwealth Court ruling that declared small public school districts underfunded, Shapiro proposed another $601 million in basic education spending and another $40 million for special education.
The governor also aimed to slash funding for cyber charter schools by capping their base state tuition reimbursement at $8,000 per student. The reform would save public school districts $378 million a year, the administration estimates.
The proposal will likely face resistance among conservative Republican lawmakers who have rebuffed at charter school reform and favor school choice.
Shapiro also wants to:
Limit skill and video-gaming terminals to 30,000 for the year starting July 1. That would gradually increase to 40,000 in the year starting July 1, 2029.
No establishment could have more than five terminals with the tax set at 52% on its gross revenues. The state’s general fund would get all but 5 percentage points of that revenue. The rest would go to shore up the Lottery Fund, which benefits senior citizens.
Legalize adult use of marijuana starting July 1 with legal marijuana sales beginning July 1, 2026.
The state would set aside $10 million for “restorative justice initiatives” and expunge the criminal records of people jailed only for marijuana possession.
Another $25 million would go toward helping small and diverse businesses enter the marijuana-sales market.
Provide another $5.5 million for vocational-technical. The budget proposes creating $12.5 million dedicated to workforce and economic development networks, using $10 million in existing money with $2.5 million in new funding to train workers.
Another $2 million would go toward a statewide program that funds internships at businesses.
Boost mass-transit funding by $292.5 million. The amount would rise to $330 million by July 1, 2029. He would shift more sales tax revenues to accomplish that.
Reduce by $50 million more a year funding from motor vehicle license fees that goes to pay for state police. by July 1, 2029, state police would be funded entirely by other money.
That should produce another $750 million to repair and replace roads and bridges over the next five years, the administration estimates.
Spend $14.5 million for four state police cadet training classes and eliminate the cap on “troopers on the streets.”
He also wants $10 million more for violence intervention and prevention programs and $10 million more for after-school programs aimed at reducing root causes of violence.
Create a new $30 million competitive program for firefighting companies to buy equipment and recruit and retain firefighters.
Add $13 million to a fund that encourages farming innovations; $2 million more for animal testing to keep livestock healthy; $4 million to help the hungry get food from a farming surplus program; $2 million more for emergency food aid for low-income residents.
Spend $6 million to boost the state’s 54 adult literacy centers. The administration sees this as a way of helping about 650,000 Pennsylvanians get a high school graduate-equivalency diploma. About 7,500 people are on literacy center wait lists, according to the administration.
Spend $5 million more on job training and related services for people with physical or intellectual disabilities. About 50,000 Pennsylvanians receive aid from the Office of Vocational Rehabilitation programs.
Spend $80 million on bonuses to attract and retain child-care staff, increase reimbursement to child-care centers and raise staff wages. The administration estimates the state has 3,000 unfilled child-care jobs.
Spend $21 million more for workers who directly care for people with intellectual disabilities, including autism. The spending would increase staff wages, create paid time off and increase access to affordable health insurance.
Spend $20 million for local area agencies on aging to care for senior citizens and $2 million to increase oversight of the agencies.
Address rural health-care worker shortages by adding $5 million to recruit and train more nurses; $20 million more to counties to recruit staff for behavioral health services; and $10 million to repay school loans for behavioral health-care workers willing to work in rural areas facing care shortages. The Democratic governor proposes a lot more money for public school education and mass transit and limiting cybercharter school reimbursements. Read More
