Josh Shapiro signed Pennsylvania’s $50.8 billion state budget on Sunday, putting his fourth spending plan as governor on the books after lawmakers rushed the deal through and left several major policy fights for later.
The budget pairs new school funding with fresh rules for data centers, publicly funded housing projects and public transit agencies. It also sets aside about $168 million a year for a cost-of-living adjustment for some retired teachers, police officers and firefighters, many of whom have gone more than 20 years without an increase in monthly pension payments.
For Shapiro, the signing closes a budget cycle that had been due at the beginning of the month and gives Pennsylvania a finished spending plan after weeks of closed-door negotiations. Since 2024, the state has poured nearly $2 billion into new school funding through its adequacy and tax equity formulas, and this year’s adequacy funding tops $565 million, including $136 million more for the School District of Philadelphia.
But the agreement also exposed how much was left unresolved. Legislative leaders could not reach deals on repealing a sales tax exemption for data center projects, allowing local moratoriums on data center projects or banning cell phones in K-12 schools. Instead, the General Assembly approved a new reporting rule that forces data centers to file annual water and energy-use reports or face a $10,000-a-day fine.
The same budget also closed a sales-tax loophole that had let online sellers avoid paying Philadelphia’s local 2% tax on items sold in the city, a change Mayor Cherelle L. Parker had sought in her budget pitch and one officials estimate will raise another $1.5 million for Philadelphia. That left skill games as one of the biggest questions still hanging over Harrisburg: the state has until October to decide how to deal with more than 70,000 machines in bars, corner stores and fraternal organizations after the Supreme Court last month said they are slot machines and should be regulated that way.
The result is better than the nearly five-month budget impasse that strained school districts, counties and social service providers last year, but it is not a full settlement. The General Assembly delivered a spending bill and postponed some of the most contentious policy calls, which means the fall will now decide whether those broad-support issues actually get resolved or remain stuck where this budget left them.
