Pennsylvania Gov. Josh Shapiro has signed the Commonwealth’s $50.9 billion budget for Fiscal Year 2026-27 into law. The budget details heavy investments in education, transportation infrastructure, the workforce, economic development and public safety over the next year.
The finalized budget followed months of deliberation and negotiation, with lawmakers reaching an agreement to heavily invest in public education while preserving the state’s Rainy Day Fund – roughly equating to $8 billion in reserves. An originally proposed version of the budget would have drawn approximately $4.6 billion from the fund and likely would have necessitated a tax increase.
The state has allocated more than a fifth of the budget – totaling $11.8 billion – toward education, representing a historic level of support for K-12 learning. That amount represents a $678 million increase over the previous year’s education funding, adding up to a total $3 billion investment increase since the current state administration took office.
Among the most notable inclusions, Pennsylvania has slotted a $565 million increase through the bipartisan adequacy and tax equity formula – delivering a total of $1.9 billion to schools that need the most support. The budget also maintains a $125 million fund for school infrastructure improvements and clean energy programs. Other notable education-centric allocations include:
- Investing $100 million for mental health and school safety funding.
- Increasing Basic Education Funding by $58 million, resulting in an $8.3 billion investment.
- Increasing Special Education Funding by $55 million, resulting in a $1.6 billion investment.
While the vast majority of the budget prioritizes K-12 education, the state has implemented and maintained measures to make higher education more affordable and accessible. This will include delivering $10 million to Penn State, the University of Pittsburgh and Temple University through a new performance-based funding formula.
In addition, the state increased the Grow PA scholarships program by $10 million, bringing the total available funding to $42.5 million to help students pursue affordable postsecondary programs. The Pennsylvania State Grant program will also receive a $5.9 million increase to maintain maximum awards.
Outside the education sector, Pennsylvania will emphasize rebuilding and securing transportation infrastructure, directing $775 million over the next two years for shovel-ready projects. For the upcoming FY 2026-2027, the state will spend $500 million to repair roads, ensuring critical infrastructure meets the modern standards needed for an effective, safe transportation network. The budget includes hundreds of millions to support local transit agencies through the Public Transportation Trust Fund.
The budget will build on past momentum to further entrench the state as an economic powerhouse, investing in economic development and growth strategies over the next year. Major boons for innovation include the newly created Innovate in PA 2.0 program. With an initial $125 million from tax credits, the program will provide funding for startups, clinical trials for life sciences and initiatives to advance the state’s innovation network. Other notable additions include:
- $20 million to strengthen commercial corridors, prioritizing main streets and small businesses.
- Increasing the Historically Disadvantaged Business Program by $3.75 million.
Public safety continues to be a point of focus for the Shapiro Administration as the state continues to endorse and support grant programs to prevent violence and bolster law enforcement. Notably, the budget will maintain the $62.1 million for the Violence Intervention and Prevention Program, providing communities with funding to reduce gun violence. Additional investments include $16.2 million to train cadet classes and $11.5 million to support after school programs.
As environmental concerns remain an enduring issue, Pennsylvania has dedicated millions to continue its environmental protection efforts and mitigate toxic pollutants throughout the state. Among these commitments, the state will transfer $20 million to the Hazardous Sites Cleanup Program to address toxic waste sites. A separate $19 million allocation to the Well Plugging Program will reinforce the state’s efforts to plug dangerous abandoned oil and gas wells.
Workforce development continues to spearhead the administration’s efforts as the state works to provide the resources and training needed to ensure residents have the tools and opportunities to thrive. Among the major investments included in the budget, the state has increased funding for CTE programs by $10 million, bringing the total annual workforce development funding to $193 million. Additional funding changes include:
- Increasing the Student Teacher Stipend Program budget by $10 million, bringing the total annual funding to $40 million.
- Increasing the Child Care Staff Retention and Recruitment Program funding by $5 million, bringing its total available funding to $30 million.
- Increasing Pre-K Counts rates by $3.75 million, helping providers raise wages and stabilize the early educator workforce.
- Allocating $3 million to establish an optometrist training program.
- Allocating $2.5 million to the Nurse Shortage Assistance Program.
Additional articles covered by the budget revolve around tax cuts, targeting tax relief measures and rebate programs to make living more affordable and strengthen businesses. The state has also moved to create a more efficient governing body, revising and implementing programs to reduce costs and allocate tax dollars effectively. The agriculture industry will also receive tens of millions to strengthen farms, communities and food security.
The budget includes millions in investments to protect the state’s elderly populace and bolster the state’s integrated crisis response system, providing better support for people experiencing mental health or substance use crises. In a similar vein, the state has recommitted to protecting its most vulnerable residents, spurring a $50 million commitment to improve the county child welfare system and ensure workers have the resources they need.
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