Governor Josh Shapiro delivered his 2026-27 budget address today, unveiling a $53.2 billion spending plan that doubles down on education equity and aims to ignite a “new era” of economic growth in Pennsylvania.
Facing a reelection year and a divided legislature, Shapiro’s proposal, a roughly 5% increase over the previous year, relies on tapping nearly $4.6 billion from the state’s cash reserves or Rainy Day Fund to balance the books without tax hikes.
“We have the surplus, we have the plan, and we have the people,” Shapiro told a joint session of the legislature. “Now, we just need the political will to get it done.”
The defining pillar of the 2026 proposal is a continued aggressive response to school funding. Shapiro is calling for an additional $565 million in “adequacy” funding, specifically targeted at the state’s poorest districts. The budget includes a $40 million increase to support students with disabilities. Plus, a new $7.5 million initiative to provide scholarships for students pursuing high-demand careers like nursing and teaching, provided they stay in Pennsylvania after graduation.
“I know government can be a productive force for good in people’s lives,” Shapiro said in his address. “I know because I’ve seen it over the past three years. Our kids are getting a better quality education, our workers have more opportunities to chart their own course, our economy is growing and our communities are safer.”
Shapiro also wants to raise the minimum wage to $15 an hour starting on Jan. 1, 2027.
To help sustain this spending, the Governor is renewing his push for two controversial revenue streams that stalled in previous years:
Adult-Use Cannabis: Shapiro estimates legalizing recreational marijuana could bring in over $530 million annually once fully implemented.
Skill Games: The budget proposes a 52% tax on the slot-like machines found in bars and convenience stores, projected to generate $368 million.
The address officially kicks off months of negotiations. Republican leaders in the Senate have already expressed concerns regarding the use of “one-time” reserve funds for recurring expenses, setting the stage for a high-stakes debate before the June 30 deadline.
