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Pennsylvania Gov. Josh Shapiro delivered his 2026–27 budget address Tuesday before a joint session of the General Assembly, laying out a fiscally cautious but ambitious plan aimed at strengthening education, addressing housing and energy costs, and advancing key policy priorities in an election year.

The package totals $53.2 billion, an increase over the $50.1 billion budget that was approved late last year after a protracted battle that left the commonwealth without a budget for more than four months.

Shapiro started his address with an enthusiastic state of the state, highlighting positive developments since he took office, saying, “Pennsylvania is rising.”

“Our kids are getting a better quality education,” he said. “Our workers have more opportunity to chart their own course. Our economy is growing and our communities are safer.”

Shapiro framed the budget as a forward-looking, fiscally responsible plan that balances investments in people and communities with structural reforms — all without broad-based tax increases.

“This budget doesn’t raise taxes — in fact, it continues to cut taxes,” Shapiro said. “It doesn’t require a broad-based tax increase today, tomorrow or at any point in the next five years.”

He called on the legislature to avoid the delays that plagued the 2025–26 budget process, which was signed into law more than four months past the deadline.

“We learned that we all need to be at the table, and that we all need to be at the table sooner,” Shapiro said. “When we all sat together, majority and minority, we made progress.”

Building on schools

Education once again dominated the governor’s address, with Shapiro highlighting nearly $900 million in additional funding for pre-K through 12th grade public schools. The proposal includes a $565 million increase in adequacy funding aimed at closing long-standing gaps between wealthy and underfunded districts, along with a $105 million boost in Basic Education Funding and $40 million more for special education.

Shapiro said the administration has increased school funding by nearly $3 billion since he took office, calling the effort both a moral obligation and an economic necessity.

“We’ve increased funding for education by nearly 30%,” he said. “School attendance is up, graduation rates are up and more young people are finding their passion in the trades.”

The budget continues funding for universal free school breakfasts and includes $30 million for the Student Teacher Stipend Program, designed to strengthen the educator pipeline amid persistent staffing shortages. Shapiro also highlighted $25 million for the Solar for Schools initiative, which he said would help districts manage long-term energy costs.

Shapiro argued that the state’s investments are already showing results, noting that “schools have served more than 224 million free breakfasts,” and that “the number of new teacher certifications is increasing, after more than a decade of decline.”

SEPTA can wait

Shapiro also addressed funding for public transportation, including SEPTA, which has been a perennial point of difference in past budget debates.

Shapiro again proposed shifting an additional 1.75% of sales and use tax revenue to SEPTA, but not until next summer. Until then, the budget proposal includes continued state funding for mass transit agencies while lawmakers debate a longer-term solution for transit financing.

He said reliable public transportation is critical to the state’s economy, particularly in the Philadelphia region, where hundreds of thousands of residents depend on buses, trains and subways to get to work.

“This budget calls for sustainable, recurring funding for mass transit to begin in 2027,” he said. “I bought us two years — but we have to keep working at this, because this isn’t a problem we can ignore. Mass transit helps drive our economy — this is an issue of economic competitiveness.”

Temple University boost

The budget proposal also includes new funding for public higher education, with increased state support for Pennsylvania’s state-related universities, including Temple University. The proposal sets aside $30 million to distribute based on outcomes such as graduation rates, affordability, enrollment of low-income students and how many students pursue degrees in fields the state considers critical.

“We’ve got this important tool in place. We established the metrics. Now it’s time to fund it,” he said, referring to the performance-based approach created to guide new state support for universities.

The plan maintains funding for the Pennsylvania Higher Education Assistance Agency and expands student aid programs, including grants for low- and moderate-income students pursuing postsecondary education or job training.

Raising the minimum wage

Shapiro also renewed his push to raise Pennsylvania’s minimum wage, which has remained at $7.25 an hour for 16 years.

“In that time, every single one of our neighboring states has raised the wage for their workers,” he said. New Jersey’s minimum wage is at $15.92 per hour, and Delaware’s is at $15.

Shapiro argued that raising the minimum wage to $15 would not only help workers but also reduce state costs.

“Raising the minimum wage to $15/hour will save this commonwealth $300 million a year on entitlement programs like Medicaid,” he said, urging lawmakers to send a bill to his desk.