Governor Shapiro Unveils 2025-2026 State Budget Proposal

February 9, 2025

This past week, Governor Shapiro presented his 2025-26 state budget proposal to the General Assembly. The $51.4 billion plan would be $3.5 billion (7% increase) compared to the current year’s budget. The big-ticket items include a significant increase in education, workforce development, health care, and mass transit.

The proposed budget plan would rely on $4.5 billion from an year-end surplus and the Rainy Day Fund to balance the budget. This would leave an estimated $6.4 billion in the Rainy Day fund. This topic will be highly contested in the split General Assembly. The state Independent Fiscal Office is predicting an operating deficit of $3.4 billion for this fiscal year.

The following budget items are of interest to the PPA and our membership companies.

  • Allocate $50 million to the Whole Home Repair program which provides money for homeowners to perform upgrades on their properties.
  • The legalization and taxation of recreational marijuana for adults for new state revenue.
  • Tax and regulate skill game terminals in licensed establishments for new state revenue.
  • Raise the minimum wage in the state to $15 an hour.

Prior to the February 4th budget address, Govenor Shapiro released his 2025 energy plan (Lightning Plan) which will be connected to the budget consideration. Most aspects of the plan will need legislative action and will be a part of the larger debate in Harrisburg in the upcoming months. Click here to read more.

Overall, the Democrats in the legislature expressed support for the budget plan, while Republicans attacked the spending increase and argued the state doesn’t have the money for Shapiros proposals. What follows is several weeks of legislative budget hearings, in which the Senate and House Appropriations Committees’ each have the opportunity to question the various state agencies pursuant to the budget numbers allotted to them.

Final negations will then continue until the budget is adopted. The statutory deadline for approval of the final budget is June 30.