Governor Shapiro’s Proposed 2025-2026 Budget Highlights
Governor Shapiro’s 2025-2026 Fiscal Year budget proposal doesn’t add up.
Of the $51.47 billion budget, there are many new spending initiatives totaling almost $1.2 billion. This does not include the proposed $1 billion in property tax rebates or the expedited corporate tax cuts. New revenue would mostly come from increased regulation and taxes. Plus, PA will apply for over $4 billion in federal grants and subsidies.
Here’s what we found:
New Expenditures by Category
- Education: $694.5 million (see our email from 2/18/25 on how our schools are failing our children despite adequate funding)
- Workforce Development: $178.5 million
- Solving Problems for PA: $35 million
- Economic Development: $119 million
- Government Efficiency: none
- Health Care: $25 million
- Cutting Costs for PA: $74 million
- Public Safety: $66.7 million
Proposed New Revenue Sources
- Increase Minimum Wage to $15 per hour – If approved the governor believes the increased wages will bring an additional $100 million per year in employee tax revenue to the commonwealth.
- Regulate and tax Video and Skill Gaming Terminals – The proposal limits the number of terminals permitted in PA and in each establishment. Gross terminal revenues would be taxed at 52%, which could bring $88 billion to PA over 5 years.
- Legalize recreational marijuana – If passed by the legislature and signed into law by the governor, this proposal could bring $250 million to PA the first year.
Additional Thoughts
Recently, the PA Auditor General released an audit report of five charter schools. The recommended changes to the funding structure of charter schools are being addressed in Shapiro’s budget proposal, which caps the funding to each charter school student at $8,000 per year.
To provide additional funding to the Public Transportation Trust Fund, the portion of the Sales and Use Tax that will be deposited into the trust fund will increase by 1.75% to 9.43%.
Bottom line…
The budget proposed by Governor Shapiro seems to lack corresponding revenues to offset the numerous new expenditures. The federal dollars from grants is questionable, especially given the governor’s lawsuit against the new federal administration. As with any government, the commonwealth’s source of revenue is the taxpayer. Whether tax money comes from the employers, the employees, or the consumers, we all fund the projects decided upon by our elected leaders. Let your state representatives know how you feel about the budget and how you would like them to vote on your behalf.
Stay tuned for future emails for how your county will be impacted by federal and state funding decisions.
As the Constitutional Convention ended in 1787, Benjamin Franklin was asked if the delegates produced a monarchy or a republic. Franklin replied, “a republic, if you can keep it.”
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