Notice
Governor Shapiro Unveils 2026-2027 Budget Proposal
February 5th, 2026Governor Josh Shapiro delivered his fourth budget address to the General Assembly on February 3, 2026. In the great hall of the House, Governor Shapiro outlined his $53.3 billion spending plan that included significant increases in public education, $1 billion for large infrastructure projects across the Commonwealth, and funding for 4 additional Pennsylvania State Police Cadet classes. The Governor’s budget estimates the state’s revenues at $48.68 billion for 2026, meaning this plan as presented would require a $4.6 billion transfer from the state’s reserves.
The Governor’s budget proposal once again included two sources of revenue that are no stranger to budget discussions, taxing and regulating skill games and recreational marijuana. The Governor projects $1.5 billion in new revenue from these two sources. As there has not been agreement on these two issues between the five negotiating parties, it remains to be seen whether this additional revenue will make it into the final agreement.
As is usually for a Governor during their budget address, Governor Shapiro focused on many policy initiatives that are not directly related to the final expenditures in the budget. Issues such as increasing the minimum wage, removing the statute of limitations for victims of childhood sexual abuse, regulation of AI chatbots, banning cell phones in schools, and investing in afterschool programs for children.
The Governor also discussed two hot button issues pertinent to boroughs across the Commonwealth, the regulation of data centers and increasing the amount of housing stock in Pennsylvania. The Governor proposed legislation that would require data centers to support their local energy grid, environment, and community and in return data centers would receive higher levels of state support. Although specifics were not provided, there will be much more discussion by the General Assembly on the proper way for the state to regulate data centers moving forward.
Governor Shapiro also addressed housing policy, stating that he was proposing “bold new steps to reform our zoning laws, build more housing, and protect renters and owners.” He said that building new housing is the most effective way to lower housing costs and that this “starts at the local level, where zoning laws and ordinances vary across our 2,560 municipalities.” The Governor did not mention creating statewide zoning laws, but rather state assistance and incentives for municipalities seeking to amend their zoning ordinances. Other housing issues mentioned in the budget included appointing a Deputy Secretary for Housing at DCED to oversee all state housing programs and priorities, including the implementation of Shapiro’s forthcoming Housing Action Plan, as well as a $1 billion bond issue to go towards housing and other needed infrastructure projects.
Some of the highlights in the projected budget for boroughs across the Commonwealth include:
- $471,000 increase for the Governor’s Center for Local Government Services
- $211,000 increase for the Main Street Matters Program
- $300,000,000 increase for the Public Transportation Trust Fund (Public Transit)
- A projected $229,130 decrease in Liquid Fuels Allocations
- $30 million for Fire & EMS Grant Program
- $1 billion for Critical Housing and Infrastructure Projects
- $144,000 increase in the State Highway Maintenance Budget
Please note that the Governor’s proposal is just the starting point for negotiations that will intensify in June and likely bleed into July. The second step in the budget process occurred in February and March when both the House and Senate Appropriations Committees held budget hearings where members of the committees were given the opportunity to ask specific questions to various state agency executives.
The Governor’s spending plan was received with mixed reviews from each of the four caucuses. To see the responses from the respective caucuses, please use the links below:
To watch the Governor’s address, please visit the link here: https://www.youtube.com/watch?v=vhYwPaADIxw
