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The Governor has indicated that the proposed 2026-27 budget does not require a broad base tax increase with the state expected to have $3.3B in surplus next summer, even if the entire budget is passed as proposed.
Among other noteworthy items are $1B in critical infrastructure investments across energy, housing, school districts, and local governments. The funding will come through the sale of a bond with proceeds in the capital facilities fund to support larger projects that bring energy projects onto the grid, and projects that build and preserve housing.
Additional priorities include:
Human Services
- $25M in recruitment and retention grants ($450 in retention bonuses for each childcare staff) and $35M in federal/state partnership in early childhood education
- Protections, literacy, and licensure that keep pace with artificial intelligence use and implementation
- Reducing red tape and aligning PA licensing standards/requirements to ensure the Commonwealth is competitive with neighboring states
- Investments in the Keystones of Health Program including:
◦ Making Medicaid available 90 days before leaving incarceration/community reentry
◦ Enacting PA's false claims act by adding additional safeguards against waste, fraud, and abuse in Medicaid
Housing/Economic Development
- Proposed initiatives and investments in economic development, including:
◦ CNIT rate reductions scheduled under current law to continue
◦ Proposed elimination of the "Delaware Loophole"
◦ $100M for "Innovate in PA 2.0" program to advance innovation through premium tax credits
◦ $10M increase (total of $38M) for PA First Program for workforce training, job creation, and retention; land and building; and equipment ($25M PA First Grant for Eli Lilly)
• Mass transit investments from implementing 1.75% sales and use tax that will go into the PA Transportation Trust fund beginning July 1 2027
• Addressing gaps in housing support by
◦ Implementing a statewide cap on rental application fees, sealing eviction records for those not actually evicted, and addressing tangled titles
◦ Creating a new Deputy Housing role to implement the Housing Action Plan, modernize the municipal housing code, and incentivize county and regional planning to address needs
- Sustainable Aviation Fuel (SAF) program: up to $15 M per year for investment of $250 M capex and 400 jobs
Workforce
- $2.5M for teacher professional development
- $18M in apprenticeship, vo-tech, and CTE (Career and Technical Education) programs.
- $3.5M increase in industry partnership grants, bringing total to $6.3 M
- $12.5M appropriation to WEDNet employee training program
- $2M to create a Career Connect Program to build internships at PA companies
- $2.5M for adult and family literacy
- Raise minimum wage to $15/hour by July 1, 2027
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