Education spending and new tax proposals are expected to take center stage in the Governor’s budget proposals.
Governor Josh Shapiro is expected to deliver his budget priorities for the 2025-2026 fiscal year Tuesday in the Pennsylvania Senate which will include constitutionally mandated additional education funding, and proposals for additional revenue streams.
Education is a top funding priority in Harrisburg this year, as the state’s education funding formulas were previously ruled unconstitutional. Per the Post-Gazette, “the decision found that poorer school districts were underfunded and there was an “adequacy gap” of $5 billion between what the state spends on poor districts versus wealthier ones.” School choice proposals in the form of additional vouchers for students in underperforming public schools to attend private schools. Democrats are typically opposed to the idea, but Shapiro has shown favor to it in the past.
Shapiro’s budget priorities are expected to face a challenge from Republicans who control the State Senate and tend to be more fiscally conservative than the Governor. The State House presently has an even split of 101 to 101 after a vacancy was created due to the death of Democrat Representative Matt Gergely. A special election for the vacant seat will be held on March 25th. Despite the state’s current budget surplus of $ 10.5 billion, it currently spends more money than it brought in.
Under Shapiro’s direction, Democrats may be enticed to create additional revenue streams by imposing taxes on “skills games” which do not presently face much scrutiny or regulation. The legalization of marijuana is also something Shapiro is hoping to pass to create an additional revenue stream. His 2024 budget previously suggested that the legal marijuana industry would bring in an additional $250 million in revenue.
Also notable is the fact that one third of the state’s budget comes from money allocated by the federal government, and President Donald Trump has promised to severely cut federal spending.
