All dollar amounts refer to new line items or increases to the line item from the previous budget. The full amounts of proposed appropriations can be seen in the 2025-26 General Fund Tracking Run.
Economic Development
• $3 million for the Marking to Attract Business program
• Reallocate 38 positions and almost $9 million in current funding to create the BusinessPA office within the Department of Community and Economic Development
• $65 million to create the PA Innovation program, with $30 million designated for the life sciences sector
• $13 million for the Ag Innovation Fund
Wages, Taxes, and Revenue
• Accelerate the reduction of Pennsylvania’s Corporate Net Income Tax to 0.75% per year, reaching a tax rate of 4.99% in 2029
• Close the “Delaware Loophole”
• Increase Pennsylvania’s minimum wage to $15/hour for non-tipped workers, and to $9/hour for tipped workers
• Give regulatory authority over skill games to the Pennsylvania Gaming Control Board and tax gaming terminal revenues at 52%
• Legalize and tax recreational cannabis for adult use. The Governor did not specify a rate of taxation
• $10 million to create the AdvancePA tax credit, which will replace the Waterfront Development Tax Credit, the Video Game Development Tax Credit, and the Manufacturing Tax Credit
Health and Housing
• Leverage $10 million in state funds to draw down $26 million in federal matching funds for immediate relief for rural hospitals
• $10 million to further meet the needs of rural hospitals
• $10 million to help first-time home buyers cover closing costs
• $10 million for the PA Housing Affordability and Rehabilitation Enhancement Fund to reach $110 million by 2029
• $50 million to create a new statewide housing repair fund
K- 12 Education
• $75 million for basic education funding
• $526 million through the bipartisan adequacy formula to support underfunded schools
• $40 million for special education
• Statewide base cyber tuition rate of $8,000 per student per year
• $5.5 million for career and technical education
• $20 million for student teacher stipends
• $25 million for school repairs
• $111 million for student mental health and school safety grants
Childcare
• $55 million for childcare worker recruitment and retention bonuses
• $10 million to increase Early Intervention provider rates
• $15 million for the Pre-K Counts program to increase wages for pre-K educators
Workforce Development
• $12.5 million to create the Workforce and Economic Development Network
• $2 million to create Career Connect program to build internship opportunities at Pennsylvania companies
• $6 million to support adult literacy centers
• $5 million to support the Office of Vocational Rehabilitation to help people with disabilities find employment
• $21 million to increase wages for direct care workers
• $5 million to recruit, educate, and train nurses in rural hospitals
• $20 million for county behavioral health services to address workforce shortages
Transit and Infrastructure
• Increase the percentage of Sales and Use Tax revenue that is deposited into the Public Transportation Trust Fund by 1.75% or approximately $292.5 million
• Continue to lower the Pennsylvania State Police’s reliance on the Motor License Fund to reach total independence in 2029-30
Our Position
Overall, this budget proposal aligns well with the Chamber’s Policy and Legislative Agenda. The proposed investments in tax competitiveness, workforce development, and childcare services are direct priorities of the Chamber and we are excited to see them prioritized by the Governor, as well. We applaud the Governor’s focus on Pennsylvania’s economic competitiveness. We have made strides in tax structure and permitting the last 2 years. We support an accelerated phase down of the CNI, but combined reporting (closing the Delaware loophole) could significantly impact our members. We await additional legislative details on this specific part of the proposal.
The Governor called on the General Assembly to raise the minimum wage to $15 an hour. He did not specify what kind of shift he would support: gradual or immediate. The Chamber is opposed to an immediate jump to $15 and we will keep a close watch on budget negotiations to see what, if any, kind of increase is ultimately included in budget legislation.
This proposal is a starting point from which to begin debate and will likely change significantly, but the prioritization of critically important areas is an encouraging sign. We are eager to work with the administration and the General Assembly to develop a budget that supports Pennsylvania’s businesses and works to establish the Commonwealth as a destination for businesses and families.
More information on Governor Shapiro’s budget proposal for the Fiscal Year 2025-26 can be found here.
The Governor’s full budget in brief can be found here.
