- What you should know
- Pennsylvania Gov. Josh Shapiro gave his fourth budget address, and proposed a $53.2 billion spending plan.
- Affordability — including an expansive $1 billion housing and infrastructure plan to incentivize new development — and creating new revenue streams were major themes.
- The address comes just three months after Shapiro and state lawmakers settled a bitter, 135-day budget impasse that squeezed schools, counties and nonprofits.
- There’s one reason to believe this year’s budget could see a faster resolution: 2026 is an election year.
// Timestamp 02/03/26 4:26pm
SEPTA not considering imminent service cuts, fare increases as long-term funding remains unresolved
SEPTA officials are sketching out their own budget plans but already know it’s not going to look or sound like last year’s “doomsday” scenario.
“We won’t be talking about deep service cuts and fare increases and layoffs and all the things that were discussed then,” SEPTA General Manager Scott Sauer said in an interview Tuesday following Gov. Josh Shapiro’s budget address.
Last August, the transit agency implemented service cuts of 20%, including the elimination of some bus routes, and raised fares by 21.5% after the legislature failed to pass new money for transit operations.
There’s a fiscal cushion now.
Shapiro flexed $394 million reserved for transit infrastructure projects so SEPTA could spend it on daily operations last year after the legislature failed to pass a bill. Pittsburgh got a similar, proportionally smaller, temporary deal.
House Majority Leader Matt Bradford (D., Montgomery) said that the latest use of capital funds for mass transit operations deferred the issue for two years, so the General Assembly can agree on a long-term revenue stream to increase state support for public transit in Pennsylvania’s metropolitan areas and beyond.
“The governor bailed out the legislature again on the issue of transit last year and got us a two-year bridge, which will have us dealing with this issue immediately after the next election,” Bradford said in a Harrisburg press conference.
SEPTA officials said they will be able to continue robust service through July 1, 2027 because of the converted capital money.
The maneuver allowed SEPTA to quickly restore the 2025 service cuts; it came as the agency faced a judge’s order to do so.
Longer term, Shapiro proposed to increase the share of the state sales and use tax devoted to mass transit subsidies by 1.75% for five years. But it wouldn’t take effect until fiscal year 2008, raising an additional $319.6 million in the first year to help strapped public transportation systems.
It’s the same proposal as last year’s, though projected to generate more because of growth in sales-tax revenue.
Democrats are pushing to hold Senate GOP lawmakers accountable at the ballot box in November for their failure to find a long-term revenue source last year.
“Now the people are going to have their say on this,” Bradford said. “Do you support this type of obstruction? Do you support staying in the way of funding mass transit systems in this commonwealth? I think the answer is decidedly not.”
To be fair, both parties proved unable to reach a compromise but the sticking point was in the Senate, controlled by Republicans.
Democrats hope the issue will help them flip the state Senate and give them a trifecta of control in the state House, Senate and governor’s mansion.
For his part, Sauer said the governor’s renewed funding proposal and his rhetorical support in the address will help.
“The fact that we’re still in the conversation is important,” he said. “That’s the most I can hope for at this stage.”
— Thomas Fitzgerald, Katie Bernard
// Timestamp 02/03/26 3:40pm
Senate Republicans pan Shapiro’s budget proposal as overspending
Senate Republicans were quick to pan Shapiro’s budget proposal as overspending that would harm the state’s economic outlook in the long term.
In a press conference responding to the budget address Tuesday, Republican leaders said the governor’s proposed spending increases relied on revenue streams that may not be approved by the legislature while perpetuating a structural deficit that would dip into the state’s Rainy Day Fund.
“We’re going to do everything we can to protect the taxpayer and make sure that the dollars that are allocated are wisely used,” Senate Majority Leader Joe Pittman (R., Indiana) said. “We have to make sure we’re, again, stretching every taxpayer dollar we can and bringing the cost of government down as much as possible.”
Sen. Scott Martin (R., Lancaster), who chairs the Senate Appropriations Committee, called the spending “mind-boggling.”
Shapiro’s budget assumes that more than $1 billion in new revenue will come from legalization of recreational marijuana and regulation and taxation of skill games. Pittman did not commit to moving either forward in the state Senate this year.
Democratic leaders, however, lauded Shapiro’s budget, insisting that Republicans would be forced to support it or come up with an alternative if they wanted to retain their slim majority in the state Senate.
“I would argue the polls indicate that we have a very popular governor. They tried to obstruct him and his numbers only got more popular,” House Majority Leader Matt Bradford (D., Montgomery) said. “My suggestion is it would be the political imperative, regardless of the policy implications, that they start working with this governor to pass things.”
Asked whether his caucus disagreed with any part of Shapiro’s budget, or were disappointed to see any items left out, Bradford said no.
// Timestamp 02/03/26 2:19pm
Gov. Josh Shapiro proposes $53.2 billion state budget focusing on affordability, development, and raising Pennsylvania’s minimum wage
HARRISBURG — Gov. Josh Shapiro on Tuesday unveiled a $53.2 billion state budget proposal with a focus on affordability and attracting development in Pennsylvania, in what — if approved by the state’s divided legislature — would be a 6.2% increase over last year’s budget.
Shapiro’s $53.2 billion pitch is likely setting him up for another fight during the election year with Senate Republicans, who control the chamber and have promised fiscal restraint as their top priority and are unlikely to approve a major spending increase. Shapiro’s budget proposal would spend $4.6 billion more than the state is projected to bring in in the 2026-27 fiscal year, requiring the state to pull most of new spending from Pennsylvania’s Rainy Day Fund that currently tops more than $7 billion.
Last year, Shapiro and House Democrats took 135 days to reach an agreement with Senate Republicans, in what became an at-times ugly battle that underscored the state’s rural-urban divide.
Shapiro on Tuesday said he wants to avoid another lengthy stalled budget, which forced schools, counties and nonprofits to take out billions in loans to stay afloat during the four-month-long impasse.
He invited leaders of all four caucuses — Senate Democrats, Senate Republicans, House Democrats, and House Republicans — to meet on Wednesday to start budget talks much sooner than prior years. They all agreed to attend, he added.
“We all recognize it took too long last year and that had real impacts on Pennsylvanians, but we learned some valuable lessons through that process,” Shapiro said in his address lasting an hour and 24 minutes. “We learned that we all need to be at the table, and that we all need to be at the table sooner.”
— Gillian McGoldrick, Katie Bernard
// Timestamp 02/03/26 1:34pm
Shapiro takes aim at grid operator PJM, utility companies for high rates
Pennsylvania Gov. Josh Shapiro had sharp words for PJM, the region’s independent electric grid operator, during his budget address Tuesday, saying it has “moved too slow to supply new power,” helping lead to high energy rates to consumers.
Shapiro and advocates have long criticized the way PJM holds auctions that impact the rates consumers pay to energy providers. On Tuesday, he called for a continued cap on rates of wholesale electricity payments to power plant owners.
But Shapiro, calling PJM “just one part of the problem,” also took aim at utility companies, saying they have “too little public accountability or transparency.”
“That’s going to change,” Shapiro said.
According to the governor, only about 20% of the amount people pay on utility bills comes from energy use.
“Another big chunk comes from fees and costs that your local utility company charges to get electricity to your home,” Shapiro said. “Utilities companies in Pennsylvania make billions of dollars every year, while at the same time, they’ve increased the cost for consumers.”
Shapiro said major utility providers, such as PECO have agreed to take four steps to rein in costs. PECO serves 2,100 square miles in Southeastern Pennsylvania and provides electricity to up to 1.7 million customers.
The steps are:
- End so-called “black box” settlements, which are confidential negotiated agreements between utility companies and regulators that determine rate changes, and agree to set prices transparently.
- Enact “common sense reforms” to ban “deceptive contracts.”
- Eliminate “jump fees” utilities charge low-income Pennsylvanians to have their services reconnected “something that literally can be done with the press of a button.”
- Work to extend protections for low-income and vulnerable residents from shut-offs while managing unpaid bills.
// Timestamp 02/03/26 1:26pm
Budget talks to start Wednesday
Budget talks will start tomorrow.
In an apparent effort to dodge a repeat of last year’s five month (135 day) budget impasse, Shapiro announced he would be meeting with legislative leaders on Wednesday to begin budget talks.
Shapiro said he had invited the leaders of all four caucus in the House and Senate to his office and each had accepted.
“We all recognize it took too long last year — and that had real impacts on Pennsylvanians,” Shapiro said. “But we learned some valuable lessons through that process.”
The impasse resulted in temporary cuts to social services, schools and counties across the state as budget talks stretched on into November and state dollars stopped flowing.
This played out in Pennsylvania alongside a federal government shutdown that threatened critical food assistance dollars. But Shapiro said the final deal showed progress.
“At a time when dysfunction and chaos reigns elsewhere, Pennsylvania is showing that we can be a model for steady progress when we come together, treat others with respect, and find ways to extend a helping hand to our neighbors,” he said.
// Timestamp 02/03/26 1:24pm
Shapiro calls for renter protections including a statewide cap on rental application fees
Shapiro also used his budget address to call for protections for households that either rent their homes or rent the land their homes sit on.
He called for a statewide cap on rental application fees, “limiting them to the actual cost of screening, and prohibiting landlords from charging fees before a prospective tenant can view a property.”
Philadelphia City Council members last year passed legislation that prohibits rental property owners from charging rental application fees of more than $50 or the cost of running a background and/or credit check, whichever is less. And landlords are banned from charging application fees unless they are used to cover the cost of these checks.
The law took effect two months ago.
City Councilmember Rue Landau, who introduced the legislation, said some renters had been paying $100 or more per application, which adds up when tenants apply to multiple properties.
Shapiro also called for protections for owners of manufactured homes, which are single-family dwellings often built off-site and placed on a lot. These households own their homes, but many of them rent the land their homes sit on.
Manufactured homes represent one of the most affordable forms of homeownership. But homeowners are often left vulnerable, because they have no other option than to pay increased rent costs if they want to keep the homes they own. Manufactured-home communities are increasingly being bought by private equity companies and other institutional investors, and rent hikes tend to follow.
Across Pennsylvania, 56,000 households live in these communities, Shapiro said. He asked lawmakers to limit the rent increases that landowners can charge.
Last year, New Jersey enacted a law that limits annual rent increases to 3.5% for these lots. Landlords who want higher increases must ask the state’s Department of Community Affairs for permission.
// Timestamp 02/03/26 1:23pm
Budget proposal includes $10 million increase for recruiting and retaining childcare employees
Shapiro proposed an additional $10 million toward recruiting and retaining childcare employees.
“Last year, we all – all of us – identified a problem that we don’t have enough childcare workers, and that’s because we don’t pay them enough,” said Shapiro.
In response to the need, the state launched a program to pay 55,000 childcare workers a bonus of $450.
“We showed them the respect that they deserve,” said Shapiro.
On Tuesday Shapiro proposed increasing the recruitment and retention bonus from $450 to $630 as he noted the program has seen overwhelming demand.
“That’s more money in the pockets of our childcare workers, and more available child care for Pennsylvania families. It’s a win, win,” he said.
Staffing shortages plague the childcare sector in Pennsylvania and nationally, and the need for workers is expected to continue to grow. Employees who work as care providers are some of the lowest paid workers, earning on average roughly $30,000 annually in Philadelphia, Montgomery, Delaware, Chester and Bucks Counties.
And when parents can’t find adequate childcare, the Pennsylvania economy takes a hit, the Inquirer has reported. The state loses out on $6.65 billion annually when parents have to call out of work or lose their job due to childcare issues.
// Timestamp 02/03/26 1:20pm
Shapiro renews calls for lawmakers to legalize marijuana in Pennsylvania
Shapiro renewed his calls for the state General Assembly to legalize recreational, also known as adult-use, marijuana as a way to drive needed revenue in the commonwealth.
According to the National Conference of State Legislatures 24 states, including Pennsylvania’s neighbors in Delaware, New Jersey, New York and Ohio, have legalized adult use marijuana. Pennsylvania is among 14 states that allow marijuana for medicinal purposes only.
The governor’s budget proposal calls for a 20% tax on marijuana products sold with sales beginning on January 1 of next year. According to budget documents from his office that tax would provide Pennsylvania with $729 million in revenue in its first year.
The figure is nearly $200 million more than Shapiro’s administration projected for revenues from legalization when he made the same proposal in last year’s budget.
A Shapiro administration official credited the increased projection as a result of increased interest among marijuana companies who would want to come to Pennsylvania and purchase licenses.
Approving recreational use of cannabis will be an uphill battle for Shapiro with a split legislature. Even as the federal government moves towards rescheduling marijuana and opening the door to more research, Senate Republicans have been reluctant to legalize the drug in the commonwealth.
— Katie Bernard, Gillian McGoldrick
// Timestamp 02/03/26 1:10pm
Shapiro pushes for more housing construction
If Pennsylvania doesn’t take action to build and preserve more housing, it will be short 185,000 homes by 2035, Shapiro said during his budget address. He called for the construction of more homes and the reform of local land-use laws to allow for more housing and lower housing costs.
Shapiro’s budget would create a $1 billion fund, supported by the issuing of bonds, to pay for a range of infrastructure projects. He called the fund “a major investment in building new housing.”
“We need hundreds of thousands of new homes,” Shapiro said. “This is how we build them.”
He also noted that local land-use laws vary across Pennsylvania’s 2,560 municipalities. He called for the state to create a catalog of local zoning rules and to help local governments reform ordinances to allow for more housing.
Shapiro called for local governments to allow for the construction of more homes near mass transit, streamline the construction of mixed-use development, and allow accessory dwelling units – such as in-law suites, garage apartments, and backyard cottages.
Most Pennsylvania municipalities ban the building of accessory dwelling units or make building them difficult.
The day before Gov. Shapiro’s budget address, a group of lawmakers in the state House announced a bipartisan package of bills meant to make homes more affordable. The two bills that have been introduced so far would allow for more housing density.
One would allow accessory dwelling units – such as in-law suites, garage apartments, and backyard cottages – in areas zoned for single-family housing. Property owners would have the right to build ADUs without asking their local government for a special exception, but municipalities would still be allowed to make “reasonable” restrictions, state Rep. John Inglis (D., Allegheny) said at a news conference Monday.
ADUs are “a simple way to add affordable housing without changing the character of our neighborhoods, and we can’t afford to keep blocking these solutions,” Inglis said.
Another bill would promote the construction of duplexes, triplexes, and quadplexes in certain areas that are zoned for single-family housing. It would require larger municipalities to allow these types of multifamily housing “while still allowing local governments to reject certain projects that might not be viable in their communities,” Inglis said.
Pennsylvania isn’t building enough housing, and that lack of supply is hiking prices for homeowners and renters, the Pew Charitable Trusts said in a report released last year.
Pennsylvania is one of the states that has allowed the least amount of housing to be built. It ranked 44th for the share of homes approved to be built from 2017 to 2023, according to the nonpartisan, nonprofit research and public policy organization.
Pew researchers cited restrictive local land-use laws as a cause and recommended the loosening of zoning rules.
“The bottom line is the best way to bring high rents and housing costs down is to build more housing and to build more varied types of housing,” Seva Rodnyansky, a manager in Pew’s housing policy initiative, told The Inquirer last year.
// Timestamp 02/03/26 1:09pm
Shapiro urges GOP lawmakers to pass statute of limitations reforms for child sex abuse victims
After years of advocating for statute of limitations reform to allow a window for child sex abuse victims to sue their abusers, Shapiro placed the blame for the policy’s lack of movement at the feet of Senate Republicans in Tuesday’s address.
“Stop cowering to the special interests, like insurance companies and lobbyists for the Catholic Church,” Shapiro said to Senate Republicans as Republicans in the chamber booed.
The governor has pushed for the window since his time as Attorney General when, in 2018, his office released a grand jury report on clergy abuse in the state that called for the window among other reforms.
The policy passed the General Assembly as a constitutional amendment in 2020 but failed to reach voters’ ballots due to an administrative error from Gov. Tom Wolf’s Department of State.
Ever since, the policy has stalled as Senate Republicans have sought to tie it to constitutional amendments relating to voter identification and other GOP priorities.
The governor, who has faced criticism from some survivors for not being a strong enough advocate for reform enough since becoming governor, made an impassioned plea to Senate Republicans, urging them to “stop trying justice for abused kids to your pet political projects.”
“It is shameful that this hasn’t gotten done here in Pennsylvania when almost 30 other states have followed our grand jury report and passed it in their legislatures,” Shapiro said. “Pass statute of limitations reform this year — and give survivors of sexual abuse the chance to confront their abusers in court.”
— Katie Bernard, Gillian McGoldrick
// Timestamp 02/03/26 1:02pm
‘Stop delaying’: Shapiro again asks legislators to raise the state minimum wage
On Tuesday, Gov. Josh Shapiro once again asked legislators to raise Pennsylvania’s minimum wage.
“I am calling on the General Assembly to stop delaying and put a minimum wage bill on my desk, and I will sign it,” he said to audible cheers.
Some in the crowd chanted “raise the minimum wage” as he brought up the issue. Shapiro responded to the chant, noting that 25 senators stood to applaud raising the minimum wage, including two Republicans: Sen. Joe Picozzi (R., Philadelphia) and Sen. Devlin Robinson (R., Allegheny).
Since taking office as governor, Shapiro has backed raising the minimum wage at every annual state budget address.
Pennsylvania’s minimum wage is the federal minimum of $7.25, which was set in 2009. Neighboring states all have higher minimum wages. In January, New Jersey’s minimum wage increased by $0.43 to $15.92 – making it more than double that of Pennsylvania’s.
“Our minimum wage in Pennsylvania has been stuck at $7.25 for the last 16 years. In that time, every single one of our neighboring states has raised the wage for their workers,” he said.
Shapiro noted Tuesday that raising the minimum wage to $15 an hour would save the state $300 million on entitlement programs like Medicaid.
“If you aren’t going to do this because it’s the right thing to do, or because it would let more families put food on the table for their kids, then do it because it’s going to save us $300 million, shrink our entitlement budget by growing our workforce and putting more money back in workers’ pockets,” he said.
In order to cover their basic needs, an adult living in Pennsylvania needs to earn $22.91 an hour, according to a living wage calculator developed at the Massachusetts Institute of Technology.
Only 2% of hourly wage earners in Pennsylvania earn the minimum wage or less, according to a report from the state’s Department of Labor and Industry based on 2022 data.
// Timestamp 02/03/26 12:56pm
Shapiro calls for faster licensing for social workers and other professionals
Shapiro, who has touted himself as a good for business governor and last year worked with Republicans to approve building permitting reform, asked lawmakers to help him move that work forward in reducing licensing time for Pennsylvania professionals.
He called on the General assembly to approve reforms allowing social workers to be licensed in conjunction with graduate school, helping to address a shortage in the state, and he called for lower wait times for other professionals like barbers and pharmacists.
“We’ve put ourselves at a competitive disadvantage by incentivizing workers to go to another state,” he said.
// Timestamp 02/03/26 12:47pm
Shapiro proposes adding $5 million to Pa.’s student teacher stipend program
As Pennsylvania continues to struggle with teacher shortages, Shapiro proposed adding another $5 million to the state’s student teacher stipend program — bringing the program up to $35 million.
Growing the program, which provides $10,000 to student teachers completing their required placements, will “ensure there are more well-trained teachers,” Shapiro said. He called out a teacher from Susquehanna Township, Hallie Sill, who he said had told him how the stipend program that launched in 2024 had helped her land a job after graduating from the University of Pittsburgh.
“Let’s increase our commitment to this initiative that we know works,” Shapiro said.
// Timestamp 02/03/26 12:45pm
Budget would add $18 million in funding for career and technical education
The governor wants to increase funding for career and technical education in the state by $18 million, bringing up total funding for these initiatives to $200 million.
He noted that career and technical education, apprenticeship and vocational technical program funding has increased 50% since he took office.
“We’ve registered 231 new pre-apprenticeships and apprenticeships, and more than 39,000 of our fellow Pennsylvanians have participated in an apprenticeship during my time as your governor in fields ranging from welding to nursing to dairy herd management,” said Shapiro. “Those investments are making a meaningful difference, and they’re creating pathways of opportunity.”
He highlighted that some workers in the state lack a high school degree.
“We can’t lose sight of the fact that there are literally hundreds of thousands of Pennsylvanians who could be added to the workforce if we take care to give them the tools they need to succeed,“ said Shapiro. “Take the 614,000 Pennsylvania adults who don’t have a high school degree, for example. That’s a ton of untapped potential.”
// Timestamp 02/03/26 12:41pm
Shapiro introduces ‘GRID’ plan for the rise of massive data centers
Saying the U.S. is in a race to dominate artificial intelligence, Pennsylvania Gov. Josh Shapiro announced a new plan he says will protect consumers against rising energy costs associated with data centers, while also easing a path for tech companies to build.
The Governor’s Responsible Infrastructure Development (GRID) plan would make data center developers either bring their own power generation or pay for any new generation they’ll need, “not saddling homeowners with added costs because of their development.”
Shapiro said too many data center proposals have been “shrouded in secrecy” but that they are crucial to the U.S.
“The United States is locked in a battle for AI supremacy against China. Look, I don’t know about you, but I’d much rather the future be controlled by the United States of America and not Communist China,” Shapiro said.
Components of the plan include:
- Commit to “strict transparency standards.”
- Engage communities.
- Hire and train local workers from Pennsylvania.
- Enter into community benefit agreements.
In return, developers would be “speed and certainty” in getting permits, as well as qualifying for tax credits.
“I know everyone … wants to see our economy grow and create more jobs and more opportunity,” Shapiro said. “But I also recognize this is unchartered territory, so let’s come together, codify these principles and take advantage of this opportunity.”
// Timestamp 02/03/26 12:37pm
Shapiro proposes ensuring access to recess for Pennsylvania students
The governor made another proposal for Pennsylvania schools: ensuring they have recess.
“Recess, to me, isn’t just an extra block on the schedule. I would argue it’s just as critical as learning math and science and English,” Shapiro said.
He said he had directed the Pennsylvania State Board of Education to develop recommendations to “guarantee recess for our students.”
// Timestamp 02/03/26 12:31pm
School day cell phone ban would create a ‘healthy, productive learning environment,’ Shapiro says
Shapiro repeated his support for banning cell phones during the school day — saying kids need fewer distractions for a “healthy, productive learning environment.”
“Students need to spend less time focused on their phones and more time focused on learning, on talking to their friends face to face, and on developing the critical skills that they will need later in life,” said Shapiro, who drew sustained applause for the proposal. (“If applause could vote, we’d have this whole thing done already,” the governor quipped.)
He told lawmakers: “I know there are bills in both chambers to do this — I urge you respectfully to come together and send a bill to my desk.”
Shapiro first called for banning cell phones from classrooms on Thursday, joining a growing movement seeking to limit kids’ time glued to devices. A bill in the Senate that would require districts to adopt policies barring phones during the school day could come up for a vote as soon as today; the bill could make Pennsylvania the 24th state to pass a so-called “bell-to-bell” cell phone ban.
// Timestamp 02/03/26 12:28pm
Some proposals garner unanimous standing ovations from lawmakers
Shapiro’s budget address is a workout for Democratic lawmakers, as they stand up, clap, repeat for each of his ideas.
As Shapiro mentioned mass transit — which he is proposing a long-term funding stream to begin in 2027 — all Democrats quickly shot up to applaud. Only one Republican lawmaker, Sen. Joe Picozzi (R., Philadelphia) stood to celebrate the mention.
As Shapiro talked about new standards he plans to implement for new data centers in Pennsylvania, a handful of other Republicans also stood to applaud.
Two popular proposals that garnered unanimous standing ovations: mentions of first responders and Shapiro’s pitch for restricting children’s access to dangerous AI chatbots.
Shapiro joked at one point, as he has in prior years, that Republicans should applaud his federal response fund because it will help safeguard money Pennsylvanians deserve. This brought a laugh from Democrats, but no reaction from Republicans.
// Timestamp 02/03/26 12:26pm
Shapiro calls for limitations on AI to protect children and seniors
Shapiro called for a litany of limits on artificial intelligence as the emerging technology presents new risks to children and seniors across the commonwealth.
In recent months AI developers have faced calls for regulation nationwide and lawsuits from parents who say their children’s relationship with chatbots drove them to self harm.
Even as Shapiro advocated for making Pennsylvania a hub for AI, he said safeguards needed to be established.
He called for age verification and parental consent for chat bots, requirements that companies direct mentions of self harm or violence from children to the correct authorities and periodic reminders from AI chatbots that they are not human.
Furthermore, he called for prohibiting AI chatbots from producing sexually explicit or violent content involving children.
“This space is evolving rapidly. We need to act quickly to protect our kids,” Shapiro said.
In addition to for calling for the General Assembly to pass legislation imposing those limits, Shapiro said he had directed state agencies to explore legal avenues to hold app developers accountable.
// Timestamp 02/03/26 12:08pm
Shapiro touts list of achievements as governor: ‘We’re solving problems and getting stuff done’
In his fourth budget address, and final before he stands for reelection in November, Shapiro touted a laundry list of his administration’s accomplishments – from funding of education, to investments in the state’s economy to reducing violent crime across the state.
“We’re solving problems and getting stuff done to improve people’s lives,” Shapiro said, referencing his campaign’s slogan “get sh*t done.”
The list of accomplishments closely mirrored the stump speech the governor gave to supporters in Pittsburgh and Philadelphia last month as he formally launched his reelection campaign and his talking points as he hit the cable news circuit on his book tour last month.
Likely to face State Treasurer Stacey Garrity in the general election next year the centrist Democrat has focused on the idea that he, as governor, can accomplish things for Pennsylvanians regardless of party affiliation.
He will retain that focus throughout his budget address, and throughout the next year as he campaigns for reelection while raising his national profile ahead of a possible 2028 presidential run.
// Timestamp 02/03/26 12:07pm
Proposal includes $565 million funding increase to raise poor schools to ‘adequately’ funded levels
Gov. Shapiro is sticking to the state’s plan for remedying constitutional underfunding of its public schools — proposing another $565 million increase to raise poor schools to “adequately” funded levels, and reimburse high-taxing districts.
If approved, Shapiro’s proposal would represent the third of nine installments to fill a $4.5 billion gap, identified after a landmark 2023 Commonwealth Court decision concluded the state had discriminated against poorer districts.
The governor’s proposed budget also includes a $50 million increase in basic education funding to be distributed to all K-12 schools and a $50 million increase in special education funding.
And it takes another step to curb payments from school districts by $75 million to cyber charter schools, after funding changes last year that were projected to save districts $175 million. While school districts have long accused charters of draining their budget, the cyber schools have vigorously protested proposals to scale back their payments, arguing their students will be hurt.
// Timestamp 02/03/26 12:05pm
Watch: Gov. Josh Shapiro’s budget address
// Timestamp 02/03/26 12:02pm
Shapiro expected to discuss increase in state minimum wage
Shapiro is expected to discuss an increase in the Pennsylvania minimum wage in his budget address.
State legislators have proposed minimum wage increases in recent years, but those bills did not become law.
The labor and industry committee of the Pennsylvania House voted Tuesday to advance a bill that would gradually raise the minimum wage. It would increase to $11 next year, $13 in 2028, and $15 in 2029, with annual cost-of-living adjustments after that.
// Timestamp 02/03/26 11:58am
State mass transit funding fight could be postponed until 2027
Gov. Josh Shapiro is ready to postpone until 2027 a likely fight over a longer-term enhancement of state mass transit funding, citing the temporary cash infusion the administration arranged last year to bail out SEPTA.
“We believe that they are stabilized for two years,” said a Shapiro administration official on Tuesday, adding that they are happy to discuss the issue sooner if the General Assembly is willing.
Last fall after negotiations with the legislature stalled on transit, the administration allowed SEPTA to shift $394 million in state funds allocated for infrastructure projects to pay cover daily operational expenses — the third temporary solution in as many years.
The money, spread over two fiscal years, allowed SEPTA to reverse 20% service cuts it had imposed last year amid a $213 million deficit. It also was to carry the transit agency through the coming budget year. Shapiro’s proposed spending plan and annual address Tuesday kicked off the negotiations process.
Yet the governor did put on record his preferred stable funding solution for mass transit, which looks just like the one lawmakers spurned last year.
The spending plan would increase the share of the sales and use tax devoted to mass transit subsidies by 1.75%, raising an additional $319.6 million yearly to help strapped local and regional public transportation systems, according to budget documents.
But the proposal would not take effect until July 1, 2027, the start of the fiscal year that will run through June 2028.
“I bought us two years — but we have to keep working at this, because this isn’t a problem we can ignore,” Shapiro said Tuesday. “Mass transit helps drive our economy — this is an issue of economic competitiveness. You know I’m competitive as hell — and I want to win.”
— Thomas Fitzgerald, Gillian McGoldrick
// Timestamp 02/03/26 11:55am
State lawmakers share bipartisan hugs ahead of Shapiro’s budget address
The joint session of the Pennsylvania House and Senate was called to order, and as the group of state lawmakers awaited the arrival of Gov. Josh Shapiro to the chamber to deliver his $53.2 billion budget proposal.
Up until Shapiro’s arrival, attendees gave bipartisan, bicameral hugs to lawmakers from their opposing chamber. Several legislators reunited with their former colleagues who had returned to Harrisburg on Tuesday in their current roles as mayors or executives across the state, including Philadelphia Mayor Cherelle L. Parker, who previously served in the state House for 11 years.
Seated nearby to Shapiro’s left is state Treasurer Stacy Garrity, alongside the other GOP row officers Auditor General Tim DeFoor and Attorney General Dave Sunday. Garrity is likely to challenge Shapiro in November’s midterm election as the state GOP- endorsed candidate for governor.
Shapiro has delivered some lengthy speeches in past years during his first term, running for more than an hour to lay out his priorities for the upcoming fiscal year.
// Timestamp 02/03/26 11:30am
Shapiro’s budget would allot $30 million in performance-based funding for Temple, Penn State and Pitt
Gov. Shapiro’s budget once again proposes to allot money for performance-based funding for Temple, Pennsylvania State University and the University of Pittsburgh.
The budget includes $30 million for the effort, half of what Shapiro proposed last year, according to a source close to the process. When the current budget was passed, however, it included no money for performance-based funding this year.
Whether the initiative will gain legislative support in the new budget year is unclear.
The three universities currently receive about $551 million in state funding.
The new performance measures that would determine how the $30 million is allotted include graduation rates, affordability, and enrollment of low-income students and those pursuing degrees in wide-ranging occupations deemed critical for the state. The criteria were developed last year by a bipartisan council of legislative leaders and the acting secretary of education.
The universities in Pennsylvania’s State System of Higher Education, meanwhile, would be flat-funded for a second consecutive year under the budget, according to the source.
West Chester, East Stroudsburg, Kutztown, Millersville, Slippery Rock, Shippensburg, Commonwealth, Pennsylvania West and Indiana received the same basic funding this year that they did last year. That was the first time since 2021-22 that the schools did not receive an increase.
Cheyney also got the same basic funding, but the historically Black college got a special $5 million earmark “to develop and implement an enhanced transfer and workforce development initiative in partnership with a community college.”
The state’s community colleges also would be flat-funded under the governor’s proposal.
// Timestamp 02/03/26 10:50am
Why is Pennsylvania Gov. Josh Shapiro always so mad at PJM, and what is it?
Pennsylvania Gov. Josh Shapiro is expected to spotlight energy affordability and the rapid expansion of data centers during his annual budget address Tuesday.
PJM Interconnection — the region’s dominant electric grid operator — is poised to play a central role in that expansion, as the independent organization has been shoved into the national spotlight and subjected to mounting pressure over the past year.
In many ways, PJM may be one of the most consequential Philly‑area institutions that most residents have barely heard of, even though their electricity supply and monthly bills hinge on its decisions.
The organization has faced escalating scrutiny nationwide and across the region because of its position as the country’s largest independent grid operator and the challenges tied to surging energy demand.
But what is PJM and why is everyone always so mad at it?
// Timestamp 02/03/26 10:08am
Shapiro will pitch $100 million reserve in the event Trump cuts federal funds for Pennsylvania
Gov. Josh Shapiro is expected to propose a new $100 million fund to use as a reserve in the event President Donald Trump’s administration opts to withhold federal funds from Pennsylvania.
Shapiro will pitch the new Federal Response Fund on Tuesday, when he delivers his fourth budget address before a joint session of the state General Assembly.
While Shapiro’s budget pitch will outline how he believes the state should spend $53.3 billion in state revenue and reserves, it is only a piece of Pennsylvania’s annual spending. In the 2025-26 budget, the state was projected to receive $53.1 billion in additional funds from the federal government, or 40% of the state’s total annual spending.
Shapiro has repeatedly said the state cannot backfill the federal cuts by the Trump administration and Congress to Medicaid, health subsidies, food assistance, and more, as these cuts total billions in federal funds. The proposed fund would not try to replace this money, but would be available if the Trump administration chooses to withhold federal fund as it did multiple times last year.
Shapiro is expected to note in his address the 19 times he sued or joined lawsuits against the Trump administration for failing to release federal funds, such as $18 million set aside for state-level Homeland Security funding or $2 billion for environmental and energy projects already appropriated by Congress during former President Joe Biden’s tenure.
Shapiro frequently sued Trump during his first administration while he was Pennsylvania’s attorney general, and has chosen to continue to legally challenge him in his capacity as the state’s governor on numerous occasions.
In his new memoir Where We Keep the Light, which was released last week, Shapiro gave a window into how he decided to join lawsuits as attorney general, noting the many times he beat the Trump administration in court because “we were rooted in the law, not politics.”
“But while I had profound differences with [Trump], and I didn’t like the way he talked, and I certainly didn’t like the values and viewpoints he espoused, I only sued his administration when I believed that he was actually violating the law,” Shapiro wrote.
// Timestamp 02/03/26 7:22am
One reason the budget could get resolved faster than last year
There is one bright spot for the schools, counties and nonprofits that rely on state funding and which last year had to wait more than four months for the money when lawmakers couldn’t agree: It’s an election year.
Election years often result in quicker budget resolutions, as lawmakers and officials want to secure money for their districts before they go home to campaign for reelection.
In 2018, when former Democratic Gov. Tom Wolf was up for reelection, he signed the state budget on June 23 — a week ahead of the July 1 deadline.
This year, Gov. Josh Shapiro is up for reelection, likely to face a November challenge from State Treasurer Stacy Garrity, the state-GOP endorsed candidate. And many other state lawmakers are in the same boat.
All 203 seats in the state House and half the 50 seats in the state Senate are on the ballot in November. Several lawmakers have announced they will not seek reelection, allowing for competitive elections to fill the vacancies.
// Timestamp 02/03/26 7:10am
Budget address begins an uncertain process for SEPTA
In the last few years, SEPTA and its fellow public transportation agencies have learned not to expect much from the regular Pennsylvania budget process.
Rewind to February 2025:
Gov. Josh Shapiro proposed to generate an additional $1.5 billion over five years to subsidize public transit operations by increasing its share of state sales tax income.
Senate Republicans, in the majority in the chamber, opposed using the sales tax, though the rate would not have increased.
They preferred a new source for the state’s transit aid rather than a broad-based levy, and said SEPTA was mismanaged, citing high-profile crimes, rampant fare evasion, and spending decisions.
Hopes were raised of a deal to use money from a new tax on games of “skill,” slot-like machines that are currently untaxed or regulated — the proverbial magical money pot that would make raising cash painless. It had featured in several budget cycles but again did not come together amid clashing opinions among GOP lawmakers.
House Democrats, who control that chamber, passed Shapiro’s proposal several times, only to see it choke out in the Senate.
SEPTA began massive budget cuts in August, including the elimination of 32 bus lines but a Philadelphia judge ordered the agency to reverse them.
When Shapiro decided negotiations with the legislature were futile, the governor shifted $394 million in state-allocated funds for transit infrastructure projects to pay for daily operations — the third temporary solution in as many years.
That money would have to last for two years.
When the state budget passed in December, there was no new transit money in it.
In November, the administration also sent $220 million in emergency money in November for repairs to the ailing Regional Rail fleet and the trolley tunnel.
SEPTA officials and transit advocates say they are unsure what’s coming this time around, if anything.
One thing is clear in advance: A Pennsylvania budget process ain’t Schoolhouse Rock, so hang on.
// Timestamp 02/03/26 7:06am
Shapiro could promote effort to ban cell phones from Pa. schools today
Gov. Josh Shapiro is backing a proposal to ban cell phones from Pennsylvania classrooms, joining a growing chorus of parents, teachers, and officials seeking to curb school disruptions and detach kids from addictive devices.
“It’s time for us to get distractions out of the classroom and create a healthier environment in our schools,” Shapiro said in a post on X on Thursday.
He called on Pennsylvania lawmakers to pass a bill that would require schools to ban the use of cell phones during the school day, “from the time they start class until the time they leave for home.”
The endorsement from the Democratic governor — who could promote the issue during his budget address Tuesday — comes as school cell phone bans have increasingly become the norm: 31 states have restrictions of some kind on phones, including 23 states with “bell-to-bell” bans barring the use of phones the entire school day, according to Education Week.
In New Jersey, former Gov. Phil Murphy signed a law last month requiring a bell-to-bell ban to take effect next school year.
Housing, affordability, and new revenue: What we’re watching for in Gov. Josh Shapiro’s budget address
HARRISBURG — Gov. Josh Shapiro on Tuesday is expected to propose a $53.2 billion state budget for the 2026-27 fiscal year, just three months after settling a bitter, 135-day budget impasse that forced schools, counties, and nonprofits to take out loans to stay afloat.
Shapiro, a first-term Democrat running for reelection this year and potentially poised for higher office, will deliver his fourth annual budget address before a joint session of the Pennsylvania General Assembly, where he plans to pitch an expansive $1 billion housing and infrastructure plan to incentivize new housing development with an overall focus on affordability in the state.
And as in years past, Shapiro is expected to again propose new revenue streams to fill a more than $5 billion deficit, such as the legalization and taxation of adult-use cannabis, as Pennsylvania is again expected to spend more than it brings in tax revenues.
Here are three things to watch in Shapiro’s budget proposal.
// Timestamp 02/03/26 7:00am
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