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Locust Walk on Feb. 15.
Credit: Jacob Hoffberg
Pennsylvania Gov. Josh Shapiro announced a new $51.1 billion budget proposal for the 2025-26 fiscal year beginning July 1, 2025.
Shapiro’s proposal emphasizes increased funding for education, transportation, and life sciences research while introducing new revenue sources through the legalization of recreational marijuana and taxation of skill games. The budget, which would use the state’s $3 billion surplus, also allocates funds for the United States’ 250th anniversary celebrations, major sporting events, and middle-class housing assistance.
The proposal asks the Pennsylvania legislature to allocate more than $500 million to the state’s underfunded school districts and send an additional $290 million to the state’s transportation agencies. The budget also calls for the legalization of recreational marijuana and taxes to be imposed on popular slot-like skill games.
In a statement to The Daily Pennsylvanian, Rep. Dwight Evans (D-Pa.) praised Shapiro for proposing “an estimated $165 million in new state funding for SEPTA that would prevent service cuts, as well as new investments in health care and education.”
“As Pennsylvania Democrats in Congress work to prevent damaging federal funding cuts from the Trump administration, it’s good to have smart leadership in the governor’s office,” Evans wrote.
During his address at the Capitol, Shapiro vocalized his support for bipartisan initiatives to expunge eviction records and increase state supervision of private businesses acquiring hospitals and nursing homes.
“These are commonsense Pennsylvania priorities that I know we all share,” Shapiro told state lawmakers. “Some of us may have a different approach to these objectives, but we’ve got to work at it together.”
Shapiro’s 2025-26 budget proposal is an 8% increase compared to last year’s budget, as Pennsylvania is set to enter the fiscal year with a $3 billion dollar surplus.
“If by the end of the year we’re looking at a surplus you could probably invest a little bit more in additional or special programs,” former Pennsylvania Gov. and political science professor Ed Rendell told the DP. “From there I used to look at the wishlists of different cabinet members and see who was asking for an increase.”
In his address, Shapiro mentioned Penn when discussing life sciences, identifying it as one “five pillars of opportunity.” He said that his proposed budget “delivers $65 million more in innovation and specifically designates $30 million for life sciences to help our industry leaders share data, commercialize their discoveries, and unleash Pennsylvania’s full potential.”
“Penn, Pitt, and Penn State all spend over $1 billion annually on groundbreaking research and development — and taken together our colleges and universities rank 4th in the nation in life sciences R&D spending,” Shapiro said.
In order to meet the various requests of the budget proposal, the state is expected to use its entire surplus, a prospect that has raised some eyebrows among House Republicans.
State Rep. Jordan Harris (D-186) urged lawmakers to consider the bigger picture in a statement to the DP.
“For many years, our budget has been very conservative and we’ve actually outperformed many of our predictions,” Harris wrote. “To folks that say we can’t afford it, I say ‘what are we willing to cut?’ Because the bottom line is we’ve been underfunding schools.”
To cover some of these costs, Shapiro is calling for two major new sources of revenue: legalizing recreational marijuana and regulating slot-like skill games. The marijuana legalization proposal calls for a 20% tax on cannabis, which Shapiro projects will bring in $536.5 million.
“I mean legalizing recreational marijuana is almost already done,” Rendell said. “Even if someone was arrested they were almost never prosecuted. Might as well make it a way to generate tax revenue”
Harris agreed, mentioning that in the process of legalizing recreational marijuana, Pennsylvania will be able to capitalize on the tax revenue that it’s losing to neighboring states where usage is legal.
Another new initiative in this year’s proposal is allocated funding for the United States’ 250th anniversary, which will be celebrated on July 4, 2026. The budget has set aside $65 million for the celebration with hopes of generating ample revenue from new businesses and attraction to the state.
“The country’s 250th anniversary automatically draws focus to Pennsylvania because this is where our nation was born,” Rendell said. “It’s a good opportunity for us to grow as an economy and build traction for new businesses as well as remind people of the role we’ve always played in this nation.”
This funding was allocated to the Tourism and Promotion Fund, which includes another $36.5 million to pay for six FIFA World Cup matches, the MLB All-Star Game, and the 2026 NFL Draft which will be held in Pittsburgh. These ventures, among others, are part of a larger initiative to create jobs within the state. In another effort to help close the wealth gap, one focus of the budget is to help out middle class families.
“We’ve put aside $50 million for middle class families that need repairs in their homes and to help out first time home buyers,” Harris said. “We’re trying to put money into the pockets of those folks that are looking to buy homes in Pennsylvania because it’s the quickest way to close the wealth gap.”
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“}]] Shapiro’s proposal emphasized increased funding for education, transportation, and life sciences research while introducing new revenue sources through the legalization of recreational marijuana and taxation of skill games. Read More
