Shapiro urges bipartisan action in budget address, emphasizes education, housing, workforce and new revenue from skill games and cannabis

Harrisburg — Governor Josh Shapiro urged the Pennsylvania General Assembly on Tuesday to build on recent bipartisan gains and approve a budget that expands education funding, supports workforce development and housing, and raises new revenue by regulating skill games and legalizing adult-use cannabis.

"Pennsylvania is on the rise," Governor Josh Shapiro said in his address to a joint session of the General Assembly. He outlined priorities that include an additional $526 million for the new school adequacy formula, $30 million targeted to life sciences commercialization, $55 million in recruitment and retention bonuses for childcare workers, and regulatory changes to treat unregulated "skill games" like other video gaming terminals so the Pennsylvania Gaming Control Board can collect revenue now going to neighboring states.

Shapiro framed the pitch as continuation of work completed during his first two years in office: expanded public school funding, reduced permitting backlogs and investments that the administration says have attracted private-sector investment. He repeatedly called for bipartisan cooperation and for lawmakers to send him bills to legalize adult-use cannabis with expungement for certain low-level convictions, saying the state faces lost retail revenue across borders and could yield roughly $1.3 billion in revenue over the first five years if legalized.

The address listed specific proposals and program increases rather than a single line-item spending total presented by the governor. Republican appropriations chair Representative Struzzi told the House later that the governor's proposal would amount to a $51.4 billion spending request; Struzzi characterized that as the largest in state history and said the proposal would draw significantly on reserves if adopted as presented. "That is the largest budget request in Pennsylvania history," Representative Struzzi said during the House response.

Why it matters: Shapiro proposed both spending increases and revenue changes that would affect tax policy, state reserves and regulatory jurisdiction. The package couples continued investments in K-12 and workforce training with proposals to change how the state regulates gaming and cannabis, and to accelerate corporate tax cuts. Those changes would touch education, senior services funded by the Pennsylvania Lottery, public safety and the state's approach to economic development.

Key proposals and details mentioned by the governor and in responses on the House floor:

- Education: The governor said the administration will invest an additional $526 million through the new adequacy formula and continue $11 billion in overall K-12 funding, including support for school repairs, mental health services and student teacher stipends. He credited the new formula to address constitutional obligations under Article III, Section 14 of the Pennsylvania Constitution, which the governor referenced as the basis for the adequacy work.

- Workforce and apprenticeships: Shapiro cited the addition of apprenticeships and investments in career and technical education, and proposed $6 million for adult literacy and $40 million to expand student-teacher stipend programs.

- Childcare and direct care: The budget includes a $55 million fund for childcare recruitment and retention bonuses (at least $1,000 per worker) and continued support for direct-care wages, paid time off and access to health insurance for home-care workers.

- Housing: The governor proposed $10 million to help first-time buyers with closing costs, an additional $10 million to increase the FAIR affordable housing program to $110 million by 2028, $50 million for a housing repair fund, and proposals to seal eviction records in certain cases.

- Gaming and seniors: The governor proposed treating unregulated "skill games" like regulated video gaming terminals under the Gaming Control Board and using that revenue to fill gaps in Lottery-funded seniors programs. He said the lottery had lost an estimated $200 million over five years primarily because of those unregulated machines.

- Cannabis: Shapiro asked the legislature to send him a bill to legalize adult-use cannabis, expunge certain nonviolent possession records and set regulatory safeguards for public safety and community reinvestment. He said neighboring states' markets are diverting customers and economic activity.

- Economic development: The budget would accelerate corporate net income tax cuts and close the so-called "Delaware loophole," and direct $65 million more for innovation with $30 million specifically for life sciences commercialization.

- Health care and hospitals: Proposals included $10 million in state funds to draw $26 million in federal matching funds for hospitals, measures to increase transparency (a $4 million investment for an all-payer claims database), and measures to require pre-transaction notifications to the attorney general for large private equity sales of health-care facilities.

Responses on the floor:

- Representative Harris, chair of the House Appropriations Committee, opened the House response and commended the governor's priorities for continuing investments in education and other services.

- Representative Bradford, the House Democratic leader, praised the address as "not just a fiscal road map. It is a statement of priorities," and argued the budget advances economic and racial equity through housing and education investments.

- Representative Struzzi, the Republican chair of Appropriations, questioned the affordability of the package and warned it would draw from reserves and increase spending faster than projected revenue growth.

What the address did not finalize: The governor presented programmatic priorities and requested authority for regulatory changes; the speech did not itself enact laws or appropriate funds. Appropriations committees on both sides of the aisle signaled more detailed hearings and scrutiny to follow.

Ending: The governor closed by urging cooperation and invoking Pennsylvania's traditions; lawmakers returned to the House for committee and budget work that will test whether the proposals pass as offered or are modified through the regular appropriations process.