Overview
The balanced $50.1 billion FY 2025–26 budget increases education funding, advances cyber charter reforms and includes language withdrawing Pennsylvania from the Regional Greenhouse Gas Initiative (RGGI). Passed by the House 156–47 and the Senate 40–9, the plan was quickly signed by Gov. Shapiro. Spending rises roughly $2.5 billion (5%), primarily for public schools, while surplus funds keep the budget balanced with $8 billion in reserves. The budget also introduces a state Earned Income Tax Credit equal to 10% of the federal credit, providing $200–$700 in relief to qualifying families. Funding for mass transit and taxation of skilled games was not included and may be addressed in the next budget cycle.
The budget includes targeted investments in permitting efficiency, small business support, workforce development, childcare and community infrastructure. It maintains the gradual reduction of the Corporate Net Income Tax (CNIT) rate and introduces no new broad-based business taxes. Funding for higher education continues to support workforce-aligned programs and regional talent development.
Highlights
Taxation and Development
- Expands the Streamlining Permits for Economic Expansion and Development (SPEED) program, allowing certified professionals to review several key construction and development permits.
- Establishes a public database of permits under SPEED for greater transparency.
- Allocates $15.8 million to the Department of Environmental Protection (DEP) for staffing to support these process improvements.
- Working Pennsylvanians Tax Credit: Establishes a refundable state Earned Income Tax Credit (EITC) equal to 10% of the federal EITC, providing approximately $193 million in tax relief.
Business Development and Quality of Life
- Main Street Matters: $20 million for grants to support downtown and commercial corridor revitalization projects.
- Historically Disadvantaged Business Program: $20 million to assist small, minority-owned and historically underrepresented businesses in accessing capital and resources.
- Business PA: approximately $8.8 million
- Manufacturing PA: approximately $13 million
- PA First: approximately $38 million
- Area Agencies on Aging: $10 million increase to expand senior services.
- Food Assistance Programs: $11 million increase in funding.
- Public Libraries: $5 million increase statewide, including $433,000 for services for visually impaired residents.
Education & Workforce Development
- Grow PA Scholarship Program: $7.5 million to support students preparing for in-demand occupations.
- Pre-K Counts: $7.5 million increase in provider rates to support staff recruitment and retention.
- K–12 Education:
- $105 million increase for Basic Education Funding
- $40 million increase for Special Education
- $125 million for school infrastructure, including $25 million for Solar for Schools
- $175 million in savings attributed to cyber charter reforms
- State System & Universities: Funding for PASSHE institutions and state-related universities (Penn State, University of Pittsburgh, Temple University) is maintained at current levels.
- Workforce & Skills Alignment: State-supported scholarship and training programs support students pursuing careers in in-demand fields, contributing to the region’s talent pipeline.
- Community & Technical Colleges: Continued funding supports workforce training programs in critical sectors such as healthcare, IT, logistics and manufacturing.
- Child Care Staff Retention and Recruitment Program: $25 million to provide approximately $450 per employee annually to licensed Child Care Works providers.
- Continues the Employer Child Care Contribution Tax Credit and the Child and Dependent Care Enhancement Tax Credit.
Questions or Feedback
If you have questions about how these budget items may impact your business or community, please contact Alex Roché, GRCA’s Director of Advocacy, at ARoche@GreaterReading.org.
Sources
- Pennsylvania Department of Environmental Protection – SPEED Program Expansion Overview (2025)
- Governor’s Budget Signing Release (Nov. 2025)
- Pennsylvania House and Senate Appropriations Committee Budget Trackers for SB 160 PN1309 (Nov. 2025)
- Line item House Appropriations Budget (Nov. 2025)