HARRISBURG – Senate President Pro Tempore Kim Ward (R-39) and Senate Majority Leader Joe Pittman (R-41) said the bipartisan state budget plan passed today will help grow Pennsylvania’s economy and makes key improvements to the spending plan proposed earlier this year by Gov. Josh Shapiro.
The $50.1 billion budget approved by the Senate and the House cuts nearly $1.4 billion in spending from Shapiro’s proposal, utilizes billions in lapsed funding in state agencies and special funds in the best interests of taxpayers, protects Pennsylvanians from the devastating consequences of Shapiro’s proposed electricity tax, and incentivizes job growth across the commonwealth by implementing key reforms to the permitting process and maintaining important tax cuts.
“This budget took much longer than expected but ultimately Senate Republicans held the line to keep our promise to the people of Pennsylvania by not raising taxes and ensuring our state savings account – the Rainy Day Fund – was not attacked,” Senate President Pro Tempore Kim Ward said. “It is important for Pennsylvanians to know this budget is the direct result of a divided government and two very different approaches to how we govern our state and partner with the federal government. While Senate Republicans had to compromise by spending more than we would have preferred, we did achieve some significant policy wins that will give Pennsylvania families more certainty with their electricity rates by abandoning Gov. Shapiro’s carbon tax program known as RGGI, boosting job creation by helping businesses get up and running through ‘deemed approved’ permit reform for air quality general permits and specific NPDES water permit renewals and putting money back in the pockets of low-income working Pennsylvanians through a tax credit that allows Pennsylvania families to spend their money how they want on things like child care, school and food.”
“The closing of the 2025-26 state budget process marks a new beginning for this commonwealth, filled with economic growth and opportunity,” Senate Majority Leader Joe Pittman said. “This budget moves, monumentally, to increase the promise of Pennsylvania. This is a pro-family and pro-job creator plan, and we have protected taxpayers by making sure the Rainy Day Fund stays intact. Above all, we have removed the anvil of the RGGI electricity tax, which has been hanging over the heads of every consumer of electricity in this commonwealth. This budget is a product of divided government, and while it may have taken more time than any of us would have preferred, we have brought a divided government together to move our commonwealth forward.”
The plan is expected to reduce the risk of further inflation after Pennsylvania families were severely impacted by price hikes during the four years of the Biden Administration.
As part of the budget agreement, the illegal regulation mandating Pennsylvania’s participation in the Regional Greenhouse Gas Initiative (RGGI) – a multi-state pact that would have added more than a billion dollars in new electricity taxes on Pennsylvania families and job creators – was eliminated.
Preventing Pennsylvania from entering RGGI and stopping this tax protects consumers from dealing with even more severe consequences, including the closure of Pennsylvania power plants, job losses, and the threat of rolling blackouts in the years ahead.
In addition, critical reforms to Pennsylvania’s permitting process will make our state more competitive economically by requiring a wide variety of environmental permits to be deemed approved after a certain period of time, ensuring applicants know the time frame for consideration of their application and can appeal any permits that are denied. This provides certainty to the process and ends the current practice of dragging out the permitting process for many months without resolution.
Senate Republicans also achieved key improvements to Shapiro’s budget proposal, including reforms to limit cost increases in human services programs; rebasing spending on some line items to reflect actual expenditures to use taxpayer dollars more efficiently; and protecting the state’s emergency Rainy Day Fund by slashing the governor’s proposed spending level and using approximately $3 billion in lapsed funding to fill budget gaps.
The budget continues policies championed by Senate Republicans to make Pennsylvania more competitive for business development and job growth, including continuing the phase-down of the Corporate Net Income Tax and preserving the increase to the Net Operating Loss deduction. As a result of these pro-growth policies, Pennsylvania job-creators will pay approximately $1.4 billion less in taxes than they would have paid under the previous rate in 2023.
The agreement includes new money to promote student achievement and empower families, including a $50 million expansion of the state’s popular Educational Improvement Tax Credit program to support more school choice opportunities for families in disadvantaged schools.
Additional funding is also included for the Ready to Learn Block Grant program ($562 million increase), Basic Education ($105 million increase), Special Education ($40 million increase) and Pre-K Counts ($9.5 million increase).
An additional $7.5 million will support the Grow PA Scholarship Grant program created by Senate Republicans last year to provide grants of up to $5,000 to students pursuing higher education for in-demand fields, provided they agree to stay and work in Pennsylvania after graduation.
The budget also includes the new Working Pennsylvanians Tax Credit, a state-level earned income tax credit that puts money back in the pockets of hardworking Pennsylvania families. State taxpayers eligible for the federal Earned Income Tax Credit will be able to also claim a state tax credit equal to 10% of the amount they receive under the federal program in the same taxable year.
A $15 million cut proposed by Shapiro to workforce development programs was restored, ensuring these programs can continue to help train Pennsylvanians for high-quality, family-sustaining jobs.
The budget protects programs designed to benefit older Pennsylvanians by providing a $100 million transfer to the Lottery Fund, as well as $90 million in recurring funding from i-gaming. An additional $10 million was also provided to Area Agencies on Aging.
The plan also protects and promotes Pennsylvania’s farmers by including key provisions to ensure the Pennsylvania Animal Diagnostic Laboratory System can continue to identify potential outbreaks and providing additional funding for Farmer’s Market Food Coupons ($7 million increase) and the State Food Purchase program ($4 million increase).
Video from a press conference with Sen. Kim Ward, Sen. Joe Pittman, and House Republican Leader Jesse Topper is available here.
CONTACTS:
Erica Clayton Wright (Sen. Ward)
Kate Flessner (Sen. Pittman)