Senate Approves Fiscally Responsible State Budget
On July 12, 2026, the Senate approved a fiscally responsible state budget that stands up for taxpayers, doesn’t raise taxes on Pennsylvania families and supports affordability and job growth.
Gov. Josh Shapiro originally proposed a budget that would have increased spending by $2.7 billion (5.4% increase) and taken approximately $4.6 billion from the state’s emergency reserves in the Rainy Day Fund. His plan would have required massive tax increases as soon as next year.
The final agreement negotiated by Senate Republicans cut more than $1.1 billion from the governor’s spending request and will not require any withdrawals from the Rainy Day Fund, setting the state on a more sustainable path and avoiding potential bond downgrades and higher debt costs.
Senate Republicans identified more than a billion dollars in overspending proposed in the Department of Human Services over two years, and more than $100 million in unnecessary spending proposed in the 2026-27 budget in the Department of Corrections.
Over the last two years, Senate Republicans have pushed to reclaim $4.5 billion from prior-year budgets, special funds and other accounts, ensuring this money can be utilized to support state government programs instead of sitting idle in government accounts.
The budget plan also provides greater efficiency and oversight of PennDOT operations. The agreement forces PennDOT to deploy an additional $775 million from the Motor License Fund to support highway projects and ensures transparency of how much money is owed to transit agencies from the Public Transportation Trust Fund.
Senator Pittman Speaks on the State Budget
Press Conference Following Passage of the State Budget
Senate Republicans Ensure Funding of Key Priorities
Senate Republicans led efforts to include an additional $12 million for rape crisis centers, nearly doubling funding levels from the previous year.
An additional $565 million is included for the Ready to Learn Block Grant program, and Basic Education Funding will see a $58 million increase. Funding for Special Education will also increase by $55 million.
The plan maintains funding for the Educational Improvement Tax Credit program and rejects legislative changes proposed by House Democrats that would have taken away scholarships from students and limited future donations to the program.
$10 million in new funding is also included for Grow PA, a successful program created by Senate Republicans two years ago to provide grants of up to $5,000 for students who pursue postsecondary education training for careers in high-demand industries in Pennsylvania. The program requires a commitment for students to live and work in Pennsylvania after graduation, helping to address the state’s demographic challenges in the years ahead.
Career and Technical Education funding is also increased in the budget by $10 million, and $15 million was restored to a key Workforce Development line item Gov. Shapiro proposed to cut in his February budget proposal.
Long-term care providers will also see rate increases in the budget, and additional funding is included to support nursing homes.